Health Care

#575 - Medicare: Negotiated Drug Prices May Not Lower Costs

Rep. Nancy Pelosi has promised that within its first 100 hours the Democrat-controlled House will repeal the ban preventing Medicare from negotiating directly with pharmaceutical companies. She must expect this legislation to bring down drug prices dramatically. However, it is not obvious that allowing the government to negotiate with pharmaceutical companies will lead to lower prices than those achieved by private drug plans. There are several good reasons why not.