A $6 Billion Breakthrough or a Drop in the Bucket?

Last week, the White House announced a milestone in health care policy. After decades of effort, and for the first time, the government successfully negotiated drug prices directly with pharmaceutical companies. For years, the fight to control health care prices, perhaps the most significant factor in health care spending, has felt like an unwinnable battle, so it’s no small feat that Medicare is finally flexing its negotiating muscles. But it’s also a drop in the bucket.

In a country where an estimated 18 million people are unable to afford the medications they need, reducing drug costs is likely to resonate with many voters. And it’s not surprising that Kamala Harris’s campaign is highlighting this news. It’s a well-deserved victory lap over the fact that the administration delivered on a long-promised reform, and one that advances her commitment to health equity. Many countries’ health care systems negotiate for better prices. Medicare, traditionally, has not. When George W. Bush’s administration passed Medicare Part D (drug coverage), it included language specifically preventing the government from negotiating directly with drug companies. Because of that, most insurance companies contract with pharmacy benefit managers, middlemen who negotiate with the drug companies for specific deals. This complexity can lead to more spending and more frustration.