Letting HHS negotiate drug prices could save businesses $195B, analysis finds

Allowing the HHS secretary to negotiate drug prices could save businesses $195 billion and another $98 billion for workers, according to an analysis conducted by West Health published May 20. 

West Health, a group of nonprofit, nonpartisan organizations dedicated to lowering healthcare costs, said the "Elijah E. Cummings Lower Drug Costs Now Act," or H.R. 3,  could result in hundreds of billions of dollars in lower commercial health insurance costs by 2030. 

H.R. 3 was proposed in September 2019 by House Speaker Nancy Pelosi, D-Calif., and would let the HHS secretary directly negotiate prices with drugmakers and make those prices available to all Americans with private insurance. The House passed the bill in December 2019, but progress was stalled when the COVID-19 pandemic began in early 2020. House Democrats reintroduced the bill in April. 

To conduct its analysis, West Health partnered with actuarial firm Milliman to analyze the impact of the legislation on stakeholders. To estimate dollar savings for individuals and employers, the organization used data from National Health Expenditures, the Kaiser Family Foundation Employer Health Benefits Survey and the Medical Expenditure Panel Survey. 

The Congressional Budget Office released an analysis in 2019 estimating the bill would save Medicare $456 billion over the course of a decade, but prevent eight new drugs from coming to the market. West Health's analysis is the first to estimate the bill's effect on private insurance. 

Find West Health's full analysis here

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