A longtime Republican health policy advisor has endorsed the idea of letting health insurers team up when negotiating prescription drug prices with the manufacturers.
Avik Roy, who is now the president of the Foundation for Research on Equal Opportunity, talked about the idea today, at a hearing on drug prices organized by the House Oversight and Government Reform Committee.
Roy previously was a senior fellow at the Manhattan Institute, an organization that promotes a market-based approach to public policy. He has served as a health policy advisor to Mitt Romney’s 2012 presidential campaign, to Rick Perry’s 2015 presidential campaign, and to Marco Rubio’s presidential campaign. He is also the opinion editor for Forbes Magazine and Forbes.com.
Roy suggested during the hearing that drug manufacturers have what amounts to a monopoly, or near monopoly, on too many older drugs, such as colchicine, a drug for treating gout that was first discovered about 3,500 years ago.
Roy said in his written testimony that one way to fight the manufacturers’ pricing power would be to create an antitrust exemption that would let insurers join drug price negotiation coalitions.
Switzerland already offers an antitrust safe harbor that lets all of the private insurers in a given region join together to negotiate with drug makers, Roy said.
“In this way, they can balance out the monopoly power of branded drugs, while maintaining a health care system that is, on balance, more market-oriented than America’s,” Roy said.
If Congress let insurers join together to negotiate drug prices, that “would limit the need and desirability of insurers to consolidate, because the primary rationale for consolidation is to level the playing field with providers and drug companies,” Roy said.
Roy also proposed that the United States make more use of personal health accounts, to give consumers more awareness of what drugs really cost, and that the federal government take a number of steps to increase competition among drug makers, such as encouraging drug makers to offer drugs that are similar to drugs already on the market.