The only government program that I can think of that did not authorize price negotiations for prescription medications was the Medicare Part D program. In its inception in 2006, price negotiations were not part of the law, and drug manufacturers were essentially at their leisure for pricing.
That, however, has come to an end, at least to some extent. Up to 125 medications will soon be part of a negotiated pricing set forth by CMS, as part of recent legislation that was passed. The estimates are that the government will save over $95 billion in the next 10 years through this program. Insulin, for example, is now capped on costs, which can mean the difference between a low-income beneficiary getting their needed medication or having to divert their fixed income dollars to other necessities.
In this NYT article, you will read that several drug makers are fighting this and have filed federal suits to put a stop to this (alleging the price negotiation clauses are unconstitutional). Interestingly, if you recall, there is similar pushback when the FDA seeks to make a traditionally prescription medication an over-the-counter drug. The plans love that, as it then shifts those costs directly to the patient.
The PBMs may or may not love it, depending on how their contracts with the plan sponsors are structured, and the makers of the drugs clearly will hate it; the drugs in question will have to be more competitively priced. Look at medications like Flonase, Prilosec, and most recently, Voltaren. It will be interesting to see if any lower courts put a stop to the process and if it works its way up to the Supremes. The manufacturers are taking a very tactical approach by sprinkling the lawsuits around the country; nothing better than throwing some pasta against the wall and seeing what sticks. Venue shopping is nothing new, and when you have a national footprint, that is easy to achieve.
While I agree that the manufacturers need to protect their rights, we should all be in agreement that the drug market is very broken. When something like an EpiPen gets a price increase that makes it nearly impossible to afford, when it is fairly inexpensive to manufacture, the time has come to have a reasonable discussion about where we are going as a nation relative to our healthcare system.
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