Obama Proposes Greater Drug Price Scrutiny in Budget Plan

President Obama’s $4 trillion budget plan proposed requiring pharmaceutical companies to be more transparent in how they determine drug prices.

In the section, labeled "Establish Transparency and Reporting Requirements in Pharmaceutical Drug Pricing," the US Department of Health and Human Services wrote of Obama's health care proposals: "Currently, limited public information exists on how pharmaceutical manufacturers price drugs, and no law requires manufacturers to report on the costs driving their pricing decisions…To bring greater transparency to prescription drug pricing, this proposal requires pharmaceutical manufacturers to publicly disclose production costs, including research and development investments and discounts to various payers for specific high-cost drugs that the secretary identifies through regulation based on the public's interest.”

According to an article in the Los Angeles Times, the proposed health care proposals are very straightforward, requiring drug companies to outline how much they spend on developing, manufacturing, distributing, and marketing certain drugs.

The budget also proposed that the Health and Human Services secretary be allowed to negotiate drug prices for high-cost drugs under Medicare Part D, which could also help in lowering prices.

Reference: Lazarus D. Obama’s budget plan would allow greater scrutiny of high drug prices. Lost Angeles Times. February 16, 2016.