White House, Speaker Pelosi in talks on bill to allow Medicare to negotiate drug costs

The White House and House Speaker Nancy Pelosi, D-Calif., are in discussions on legislation to allow the federal government to negotiate drug costs in the Medicare program, FOX Business has learned, a proposal President Trump has supported in the past but one that could face stiff resistance among congressional Republicans.

The ongoing discussions center on allowing the Centers for Medicare and Medicaid Services to negotiate with drug companies to set treatment prices in Medicare Part D, industry sources say. Should the two parties be unable to reach an agreement, a binding, third-party arbitrator would likely be used. It is not yet clear who that entity would be, the sources added.

Such a move could lead the federal government on a path to negotiating costs for all drugs, a proposal that will face intense pushback from the pharmaceutical industry which has long opposed Medicare having a role in setting treatment prices. The sector would also likely oppose any third-party having a role in setting costs.

Spokespersons for White House and Pelosi did not respond to request for comment.

Democrats have long called for the U.S. to allow Medicare to negotiate drug costs, similar to the existing program in the Department of Veterans Affairs. Republicans have largely resisted, arguing that market forces in the private sector can drive down costs.

As drug prices have risen, however, there is a renewed from both parties to pursue legislation to address the issue. Lawmakers are exploring a number of potential actions, including making it more difficult for brand-name drugs to withhold the samples that generic manufacturers need to make copycat products.


There is also an interest in curbing perceived abuse of the patent program by drug companies. While new treatments receive exclusivity for a set amount of time, some manufacturers will pursue cosmetic changes or other small improvements to elongate the time period without generic competition in the marketplace.