The U.S. Senate is currently considering numerous amendments to their healthcare reform legislation. Throughout this legislative process, it is expected that there will be several amendments calling to remove Medicare Part D’s non-interference clause so the federal government is free to impose price controls.
Senators should vote NO on any effort to eliminate Medicare Part D’s non-interference clause.
When Congress created Part D, a non-interference clause was included to prevent the secretary of Health and Human Services (HHS) from interfering with the robust private-sector negotiations that occur among pharmacy benefit managers (PBMs), pharmaceutical manufacturers, and pharmacies.
The non-interference clause is an important part of Medicare Part D and is a key reason that the program has come in under budget, saving taxpayers billions of dollars, and granting patients access to medicines at low costs.
Instead of forcing low costs through price controls, Medicare Part D relies on free market competition to reduce costs by giving negotiators an incentive to provide the lowest prices possible in a way that balances innovation and access to care.
Medicare Part D works efficiently as it can instead focus on promoting competition amongst different providers. Different plans are free to compete based on the goal of maximizing access and minimizing coverage.
On the other hand, price controls create a disincentive to innovate because there are fewer profits available to finance the next generation of life-saving and life-improving prescription medicines. In turn, this results in higher long-term healthcare costs because illnesses need to be treated in a reactive, not proactive way.
Removing Medicare Part D’s non-interference clause would suppress competition and fail to reduce costs as supporters claim. This proposal is bad policy and should be rejected by Senators.