The Health Policy War Room

Legislators and policymakers alike have struggled with finding effective ways to reconcile the differences between drug prices in the United States and prices for those same drugs in foreign countries. Many factors including Government price controls, varied supply chains, and differences in the volume and mix of drugs prohibit the direct comparison of drug prices between countries. The concept of developing a price index to track differences in prices over time and across markets is not new. The Medicare program has used market basket updates – a form of price indexing, to keep growth in payments under its prospective payment systems from falling behind prices in the market.  However, the concept of a price index for drugs has not been widely recognized by policy makers. That was, until President Trump released his “American Patients First” (1) blueprint to lower drug costs . In the blueprint, President Trump urged the Department of Health and Human Services to take steps to “addr...