Frequently Asked Questions About Prescription Drug Pricing and Policy [April 24, 2018]   [open pdf - 1MB]

"Prescription drug affordability has gained renewed attention in the past few years, as retail drug spending has risen at the fastest pace in more than a decade. There are several reasons for the increase in drug spending. Manufacturers have been introducing new drugs at a record rate and raising prices for existing brand-name products. (See 'What Is Behind the Recent Volatility in Retail Drug Spending?,' below.) At the same time, fewer brand-name drugs have lost patent protection than in previous years, which has meant lower savings from new generic substitutes. The Centers for Medicare & Medicaid Services (CMS) forecasts that retail drug spending could average 6.3% annual growth from 2017 to 2026.1 Although that growth rate would be a reduction from recent, more rapid levels, CMS expects retail drug spending to increase faster than other areas of medical spending in this 10-year period. This report will address frequently asked questions about government and private-sector policies that affect drug prices and availability. Among the prescription drug topics covered are federally funded research and development, regulation of direct-to-consumer advertising, legal restrictions on reimportation, and federal price negotiation."