Frequently Asked Questions About Prescription Drug Pricing and Policy (CRS Report for Congress)
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| Release Date |
Revised May 6, 2021 |
| Report Number |
R44832 |
| Report Type |
Report |
| Authors |
Kirchhoff, Suzanne M.;Johnson, Judith A. (Judith Ann), 1957-;Thaul, Susan |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Prescription drugs play an important role in the U.S. health care system. Innovative, breakthrough
drugs are providing cures for diseases such as hepatitis C and helping individuals with chronic
conditions lead fuller lives. Studies show that prescription drug therapy can produce health care
savings by reducing the number of hospitalizations and other costly medical procedures.
Congress and presidential administrations have attempted to ensure that Americans have access to
pharmaceuticals by enacting the Medicare Part D prescription drug benefit as part of the
Medicare Modernization and Prescription Drug Act of 2003 (MMA; P.L. 108-173) and expanding
drug coverage under the 2010 Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as
amended). Congress also has enacted laws to encourage manufacturing of lower-cost generic
drugs, as well as cutting-edge biologics and biosimilars.
Americans are using more prescription drugs, and for longer periods of time, than in past decades.
Still, access to prescription drugs remains an issue for a number of consumers, particularly those
without insurance; those prescribed expensive specialty drugs for treating serious or rare diseases;
or those enrolled in private insurance or public health plans with high cost-sharing requirements,
such as drug deductibles and coinsurance.
Prescription drug affordability has gained renewed attention during the past few years as retail
drug spending has risen at the fastest pace in more than a decade—growing 12.4% in 2014 and
8.9% in 2015 before slowing to a 1.3% increase in 2016. There are several reasons for the recent
volatility in drug spending. Manufacturers have been introducing new drugs at a record rate and
raising prices for many existing brand-name products. The introduction of new hepatitis C drugs
at the end of 2013 had a major impact on total drug spending in 2014 and 2015. At the same time,
fewer brand-name drugs have lost patent protection than in previous years, resulting in less
impact from the use of lower-cost generic substitutes. The Centers for Medicare & Medicaid
Services (CMS) forecasts that retail drug spending could average 6.3% annual growth from 2017
to 2026. Although that growth rate would be a reduction from the average level of the past several
years, CMS expects retail drug spending to increase faster than other areas of medical spending in
this10-year period.
This report will address frequently asked questions about government and private-sector policies
that affect drug prices and availability. Among the prescription drug topics covered are federally
funded research and development, regulation of direct-to-consumer advertising, legal restrictions
on reimportation, and federal price negotiation. The report provides a broad overview of the
issues as well as references to more in-depth CRS products. The appendixes provide references to
relevant congressional hearings and documents (see Appendix A) and a directory of CRS
prescription drug experts (see Appendix B).
