HealthLawProf Blog

Editor: Katharine Van Tassel
Creighton University School of Law

Wednesday, November 29, 2006

Fixing Medicare Part D

Kevin Drum at Washington has a great round-up of recent articles concerning how the new Congress may attempt to reform Medicare Part D.  He advocates that new the Congress require that pharmaceutical companies provide Medicare beneficiaries with their lowest prices.  He states,

An MFP (most favorable pricing) clause with appropriate exceptions takes care of this, and it's something the federal government already knows how to do since Medicaid currently operates this way. It's not price control, since pharmaceutical companies wouldn't be required to supply drugs at any particular price, but if they did supply them at a price to anyone else — or any other country — then they'd also be required to offer the same deal to Uncle Sam. This is pretty standard practice when you're the biggest buyer in an industry. Just ask Wal-Mart.

And if it turns out that giving Americans the Canadian/French/German/whatever price prevents pharmaceutical companies from making money, then they'll have to raise prices in other countries. But that's OK. There's no reason American taxpayers should be subsidizing healthcare for the rest of the world, after all.

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