Thursday, 30 Oct 2025
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA
logo logo
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
  • 🔥
  • Trump
  • VIDEO
  • House
  • White
  • ScienceAlert
  • Trumps
  • Watch
  • man
  • Health
  • Season
Font ResizerAa
American FocusAmerican Focus
Search
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
Follow US
© 2024 americanfocus.online – All Rights Reserved.
American Focus > Blog > Economy > The Loss in Revenue to Pharma from Medicare Price Negotiation
Economy

The Loss in Revenue to Pharma from Medicare Price Negotiation

Last updated: September 18, 2024 6:41 am
Share
The Loss in Revenue to Pharma from Medicare Price Negotiation
SHARE

The Cato Institute recently hosted a forum in May featuring a discussion on the effects of Medicare price negotiation on drugs. The panel included Cato health economist Michael Cannon, Harvard Medical School’s health economist Luca Maini, and Cornell Medical School’s health economist Pragya Kakani. The forum, titled “At What Price: Determining Pharmaceutical Prices in Medicare,” took place on May 22, 2024.

One of the key takeaways from the discussion was that Medicare price negotiation is expected to only have a minimal impact on the revenue stream going to pharmaceutical companies. Professor Kakani presented a detailed analysis, highlighting the requirements for a drug to be subject to Medicare negotiation. These include being a brand-name drug, generating over $200 million in annual Medicare expenditures, being on the market for at least 9 to 13 years, and facing no competition from generics or biosimilars. She also outlined three other categories of drugs that are exempt from price negotiation.

In a steady state scenario, only $43 billion out of Pharma’s $1.1 trillion revenue in 2022 would be on drugs subject to Medicare negotiation, representing just a 4% reduction. Even if the Inflation Reduction Act were to cut drug prices by 50%, global revenues would only fall by 2%. Professor Kakani then presented an extreme case scenario, showing that a 67% reduction in prices for a drug with high Medicare exposure would result in an 11% drop in revenue in present value terms.

Michael Cannon added an interesting perspective by referencing a study from the early 1970s by Sam Peltzman, which found that a law requiring proof of efficacy in 1962 led to a 60% reduction in the stream of new drugs. Cannon suggested that repealing the 1962 law and having the FDA certify safety rather than efficacy could lead to more innovation, even with Medicare price negotiation in place.

See also  Sony WH-1000XM6 Headphones Confirmed with New Price, Design & Features

Overall, the forum provided valuable insights into the potential impact of Medicare price negotiation on pharmaceutical prices and innovation. For those interested in further exploration of this topic, The Great Antidote podcast also features Michael Cannon discussing prices and health care in a recent episode.

TAGGED:LossMedicareNegotiationPharmaPriceRevenue
Share This Article
Twitter Email Copy Link Print
Previous Article Did You Know Menopause Can Impact Oral Health? Most Brits Have No Idea Did You Know Menopause Can Impact Oral Health? Most Brits Have No Idea
Next Article An 11-Year-Old Boy Rescued a Mysterious Artwork From the Dump. It Turned Out to Be a 500-Year-Old Renaissance Print An 11-Year-Old Boy Rescued a Mysterious Artwork From the Dump. It Turned Out to Be a 500-Year-Old Renaissance Print
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Posts

Briefly Stated: April 30, 2025

The recent rulings and decisions made by federal judges, concerning the Trump administration's orders to…

April 29, 2025

National Volunteer Week, 2025 – The White House

By the President of the United States of America A Proclamation Every single day, numerous…

April 23, 2025

Carrie Coon on ‘Gilded Age’ Season 3 Finale, Bertha’s Marriage

What can viewers expect from Bertha in the upcoming season? As Bertha navigates the fallout…

August 10, 2025

Illegal Alien Slapped with $1.82 Million Fine for Defying Removal Order — 20 Years Later |

Photo courtesy of ICE. In a rather striking turn of events, a 41-year-old undocumented immigrant…

May 16, 2025

People are using Super Mario to benchmark AI now

Pitting AI Against Super Mario Bros: A Tougher Benchmark? While Pokémon has long been considered…

March 3, 2025

You Might Also Like

Morgan Stanley Hikes Opendoor (OPEN) PT to  Ahead of Q3 Earnings
Economy

Morgan Stanley Hikes Opendoor (OPEN) PT to $6 Ahead of Q3 Earnings

October 30, 2025
Kelley Dean Patrick Hopkins On ‘Future-Proofing’ Faculty & Students
Economy

Kelley Dean Patrick Hopkins On ‘Future-Proofing’ Faculty & Students

October 30, 2025
Adidas North America sales hit by weak dollar, CEO says tariff impact still unclear
Economy

Adidas North America sales hit by weak dollar, CEO says tariff impact still unclear

October 30, 2025
Oil steadies as US-China meeting comes into focus
Economy

Oil steadies as US-China meeting comes into focus

October 30, 2025
logo logo
Facebook Twitter Youtube

About US


Explore global affairs, political insights, and linguistic origins. Stay informed with our comprehensive coverage of world news, politics, and Lifestyle.

Top Categories
  • Crime
  • Environment
  • Sports
  • Tech and Science
Usefull Links
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA

© 2024 americanfocus.online –  All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?