Pelosi Borrows A White House Idea To Lower Drug Prices : Shots - Health News Drugmakers hate the idea. But Nancy Pelosi and Donald Trump both say pegging the prices of U.S. medicine to what people elsewhere pay could save U.S. patients a bundle. Here's how an "IPI" might work.
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How An 'International Price Index' Might Help Reduce Drug Prices

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How An 'International Price Index' Might Help Reduce Drug Prices

How An 'International Price Index' Might Help Reduce Drug Prices

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ARI SHAPIRO, HOST:

On Capitol Hill today, House Speaker Nancy Pelosi unveiled an aggressive plan to lower drug prices. Among other things, it would allow the government to negotiate prices directly with drugmakers. It caps out-of-pocket drug costs for people on Medicare, and it would create an international price index, an idea that has also been floated by the White House. NPR's Selena Simmons-Duffin.

SELENA SIMMONS-DUFFIN, BYLINE: The idea is pretty simple. Take a group of other countries, average what they pay for a particular drug, and use that as a basis for negotiating a better price for Americans. Speaker Pelosi summarized the appeal of this idea in her press conference this morning.

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NANCY PELOSI: It stops drug companies from ripping off Americans while charging other countries less for the drug.

SIMMONS-DUFFIN: She's speaking President Trump's language. Here's what he told reporters in July.

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PRESIDENT DONALD TRUMP: Why should other nations pay much less than us? They've taken advantage of this system for a long time - pharma.

SIMMONS-DUFFIN: The Trump administration has even released an outline of its own version of this very same idea. There are differences. The House plan applies to 250 drugs; the Trump plan applies to a set of drugs used in Medicare, mostly injections administered in doctor's offices. The House plan lets the government negotiate with drug companies directly; The Trump plan does not. And the House plan finds drugmakers who don't comply; the White House plan for enforcement is unclear. But still, it's an idea that both the White House and congressional Democrats like - a Washington unicorn. One example of a drug Americans pay way more for...

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UNIDENTIFIED PERSON: Ask your rheumatologist about Humira.

SIMMONS-DUFFIN: Humira is made by drugmaker AbbVie. It has a monopoly in the U.S. In 2015, it cost $2,700 a month in the U.S. and half of that in the U.K. Since then, the price here has only gone up.

BEN WAKANA: I believe that the price of Humira right now in the U.S. is about $63,000 a year.

SIMMONS-DUFFIN: Ben Wakana runs an advocacy group called Patients for Affordable Drugs. He has a personal connection here - his brother.

WAKANA: For patients like my brother and like the, you know, thousands of people who take Humira every year, the price is simply too high. We need competition, and if we can't get competition, then we need to be able to negotiate with AbbVie for a fair price, like they're offering in other countries.

SIMMONS-DUFFIN: But is just having a list of what other countries pay actually enough to get those prices down? Canada's experience suggests maybe not.

STEVE MORGAN: The comparison of our list prices in Canada to the list prices in other countries has proven to be not very effective at controlling the real price of medicines in this country.

SIMMONS-DUFFIN: That is Steve Morgan, a professor of health policy at the University of British Columbia.

MORGAN: And so as a consequence, Canada is trying to implement further price regulations that would make sure that the final negotiated prices, after rebates, are reasonable.

SIMMONS-DUFFIN: In this country, most conservative groups and Republican lawmakers hate the idea of an international price index for drugs. The pharmaceutical lobby has also opposed it, calling it foreign price-setting. But there could be a political opening for this idea, anyway. Public opinion of pharma is at an all-time low, and in this election year, voters have said loud and clear that they want action on this issue.

Selena Simmons-Duffin, NPR News.

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