President Obama wants to let the federal government negotiate discounts for the most expensive prescription drugs, whose record-breaking price tags have set off a new debate over the cost of medical care.
Obama's budget request, released Monday, includes a proposal that would allow Medicare to negotiate with drugmakers over how much it will pay for certain drugs. Federal law currently bans such negotiations.
The proposal wouldn't apply price negotiations to all drugs. It's limited to "biologics and high-cost drugs"—an apparent reference to products like Sovaldi, the $84,000 Hepatitis drug that touched off the latest battle between drugmakers and insurance companies.
"The administration is deeply concerned with the rapidly growing prices of specialty and brand name drugs," Obama's budget proposal says.
Many liberals have long wanted the government to negotiate prices for all prescription drugs, arguing that Medicare—the country's biggest health care payer—ought to have the same bargaining power that private insurance plans can leverage. But Obama hasn't fully embraced the policy, and specifically agreed not pursue it as part of the Affordable Care Act.
The proposal will surely meet strong resistance from the pharmaceutical industry and isn't likely to go anywhere on Capitol Hill. Critics, including Republicans, say price "negotiations" would actually turn into price controls, given Medicare's purchasing power, and that lower payments would cut into the industry's research budgets.