White House 2017 Budget Proposal Tackles Rising Drug Costs

High drug prices may feel like old news, but to patients splitting pills and health plans trying to absorb skyrocketing increases, the pain is all too fresh.

At ACHP, we have the privilege of partnering with organizations that are in pursuit of the 4Rs – the Right patients receive the Right treatments at the Right time for the Right price. But steady, inexplicable costs hikes make that goal increasingly difficult.

President Obama’s latest – and final – budget proposal shines a light on the problem of high drug prices and suggests several provisions to begin to address the unsustainable cost trajectory. The Administration’s budget plan calls on drug makers to cooperate with price transparency initiatives. The proposal recommends pharmaceutical manufacturers publicly report production costs, including disclosing funding for drug research and development, as well as manufacturing, distribution and marketing expenses. We at ACHP support robust R&D. It leads to many lifesaving breakthroughs. But to date, the pharmaceutical industry has been unwilling to disclose how much money goes into science and how much goes into advertising.

The proposal also prohibits pharmaceutical companies from pursuing pay-for-delay tactics, which occur when manufacturers with branded medications nearing patent expiration reimburse other companies to delay the release of lower-cost generic replacements. In addition, the budget plan reduces the length of patent exclusivity drug makers may obtain for costly biologics drugs from 12 to seven years.

Finally, the President’s budget proposes allowing the secretary of the Department of Health and Human Services to negotiate prices for biologics and other high-cost drugs with manufacturers, and grants states the authority to collectively bargain with manufacturers to acquire discounts on Medicaid drug prices.

Of course, the budget proposal is just that – a proposal. And election year politics are certain to roil the already tumultuous atmosphere on Capitol Hill. Still, ACHP applauds the Administration for its bold stance against exorbitant drug prices. In calling out drug costs, the White House is raising awareness and advocacy around an issue that matters to ACHP, our members, and most importantly, consumers all across America.

For more information, see ACHP’s work on high drug costs, including our ongoing infographic series.


-Ceci Connolly

President and CEO