Examining Opportunities to Increase Savings From Medicare Price Negotiations
SHP's Marissa Reitsma and Michelle Mello conduct an original investigation that finds allowing the U.S. Centers for Medicare & Medicaid Services to negotiate prescription drug prices for Medicare may improve drug affordability.
In this original investigation published in JAMA Network, Stanford Health Policy PhD student Marissa Reitsma and Michelle Mello, professor of health policy, and colleagues asked to what extent are estimated savings from Medicare price negotiation increased by adjusting different drug selection criteria
They conducted a cross-sectional study analyzing 2020 Medicare prescription drug claims, including drugs with generic competitors/biosimilars and ranking drugs by net rather than gross spending. They found this was associated with increased estimated savings for 2026 for 10 Part D drugs from $3.2 billion to $9.5 billion and for 2029, when negotiation expands to 60 drugs, from $16.0 billion to $28.3 billion.
"The study results suggest that as Congress considers future expansions of Medicare price negotiation, relaxing certain eligibility criteria and using net spending for drug selection may substantially increase estimated savings," they wrote in the paper co-authored with Stacie Dusetzina, PhD, Vanderbilt University Medical Center, and Jeromie Ballreich, Phd, and Antonio Trujillo, PhD, both of Johns Hopkins Bloomberg School of Public Health.
