Leon Barretto

Patients who face a high expenditure costs for their prescription drugs are too often forced to decide between purchasing their medicine or keeping their clothes on their back. Reducing the cost of medical care, rather than health insurance, is so often underemphasized or even absent from discussions of reforming the health care system. And yet lowering costs of medical care is essential for broadening access to care, reducing insurance premiums and ultimately ensuring better health.

Maryland, many of the highest- costs for prescription drugs treat conditions that disproportionately impact seniors and Black patients, such as diabetes and sickle cell disease. Not filling, delaying, or curtailing the use of prescription medications for such conditions can have life-threatening consequences.

In response, Maryland is carving its own path to protect residents from high out-of-pocket prescription drug costs and the potential adverse health outcomes that can ensue. In 2019, the General Assembly created the Prescription Drug Affordability Board (PDAB), an independent board of government appointees tasked with identifying ways to improve prescription drug affordability. The PDAB is currently studying how policies enacted in other states and countries have lowered prescription drug costs.

The main practical implication of the finding is that incremental changes to drug profits probably won’t affect innovation in a noticeable way.

On one hand, this is discouraging news for healthcare professionals and policymakers who might otherwise champion incremental incentives in order to boost innovation. But on the other, it also suggests that policies that slightly lower drug prices won’t stifle pursuit of novel drugs. In short, the researchers argue that minor changes to drug-company profits will neither encourage nor discourage innovation.

Significantly, the Trump plan is conspicuously silent on two aspects. One, it did not directly target pharmaceutical companies, whom Trump has previously accused of “getting away with murder” with their prices. Two, it did not seek to use the government’s purchasing power in the Medicare program to negotiate lower prices from drug companies.

Pauly pointed out that the government’s use of its buying power under Medicare could prevent access to medicines that are badly needed. “The important thing to know about bargaining is that it’s economic chicken,” he said. If the buyer insists on a lower price, the seller may refuse, he explained. “The consequence of bargaining inevitably is that some products that might have been available to you under a non-bargaining setting [may not be available]. You may have a smaller menu of products available to you.”

Generic drugs may be a solution in some cases, but not with patented drugs for which generic equivalents are not available, said Field. In the case of monopoly drugs, he added there is a strong case for the government to intervene and impose price regulation.