Broad Conservative Coalition Opposes Binding Arbitration Price Controls in Medicare | Council For Citizens Against Government Waste

Broad Conservative Coalition Opposes Binding Arbitration Price Controls in Medicare

Press Release

For Immediate Release
Contact: Curtis Kalin 202-467-5318

May 20, 2019

(Washington, D.C.) – The Council for Citizens Against Government Waste (CCAGW) led a coalition of 26 fiscally conservative organizations to send a letter to House and Senate leaders strongly opposing the use of binding arbitration in Medicare Part B and possibly in Medicare Part D.  The imposition of these sorts of government price controls would stall innovation and fail to lower the cost of prescription drugs.

Below are five key quotes from the letter:

  • “According to the MedPAC June 2017 report and the March briefing, binding arbitration would come into play for Medicare Part B when a subjective drug price threshold is exceeded, mainly for a newly-launched drug, or a drug with no competition. The Department of Health and Human Services (HHS) secretary would then demand arbitration from a supposed impartial party.”
  • “The government controls the entire process, from the rules to deciding when arbitration would be utilized to who becomes the arbitrator. This process makes the arbitrator a non-neutral party that is between the pharmaceutical manufacturer and the aggrieved HHS. If the manufacturer chooses not to participate, their drug will not be covered. How this process could ever be truly fair and independent is difficult to comprehend. It is in effect a price control.”
  • “Our organizations have long maintained that competition, not government-imposed price controls, lowers cost and encourages innovation. Too often, the lack of competition can be blamed on government actions.”
  • “It would be better for Congress to make sure the FDA continues to not only reduce the backlog but also expedite generic drug approval times, while providing incentives to pharmaceutical manufacturers to develop generic alternatives to the drugs with no competition. Congress also needs to focus on how the FDA is implementing the proposals found in the 21st Century Cures Act that are supposed to modernize and speed up clinical trials and the drug approval process for innovative drugs.”
  • “These market-based solutions are far better than proposals like binding arbitration that are in fact government price controls.”

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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