Assessing Drug Pricing Reform Proposals: The Real Leverage And Benefits Of Competitive Licensing
[Christopher J. Morten and Amy Kapczynski] Leading drug pricing bills in Congress tackle the problem of leverage with two distinct solutions to improve the government’s bargaining position: a tax on drug manufacturers that refuse to agree on a fair price and “competitive licensing,” under which the government accelerates market entry of competitors when a deal cannot be reached. House Speaker Nancy Pelosi (D-CA) has endorsed the first approach, recently announcing a bill that would impose a tax on drug manufacturers when they fail to reach an agreement with the government on price under Medicare Part D. Rena Conti and Paul Kleutghen recently argued in a Health Affairs blog post that the second approach—competitive licensing—is impractical because of purported manufacturing, regulatory, and legal hurdles faced by drug companies licensed under the competitive licensing scheme.
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