Alternate Title
Medicare Drug Price Negotiations: A Blueprint for Ethical Pricing Across the Healthcare System
Keywords
health law, bioethics, feminist legal theory, Medicare, Inflation Reduction Act of 2022, drug price, ration, social justice, private equity
Abstract
In a healthcare system with scarce resources, profit that exceeds the value of what is being paid for cries out for justifications. The Medicare Drug Price Negotiation Program, created by the Inflation Reduction Act of 2022, is a new program that allows Medicare to begin negotiating with drug companies to determine the maximum fair price for a small set of drugs. This Article argues that the methods for conducting these negotiations represent a significant step forward in a dramatic and important reordering of how we view the healthcare financing system, allowing us to consider rational, coherent concepts of value without having to necessarily privilege the concerns of wealthy investors as we have done in the past. This Article proposes that the criteria used in this process ought to be applied across the healthcare financing system, as this creates a rubric for a fair, just, and rational constraint of the power of those who currently set prices in all parts of the healthcare system. In the past, price concerns about drugs have been met with the simple assertion that a high return on investment is necessary to incentivize drug companies to do the research necessary for the development of new drugs and other treatments, even though there is much evidence to the contrary. However, those who seek to profit from the U.S. healthcare system can cause substantial harm by exacerbating economic-based rationing and increasing problems caused by scarce resources. Given these foreseeable harms caused by pricing decisions, some duty ought to properly rest on those with this power to explain why the price they choose is reasonable and defensible. Some form of governmental action is likely necessary to ensure that pricing is informed by these explanations and is within reasonable boundaries, so that foreseeable harms to patients and the system overall are minimized. This Article uses social justice theory and feminist legal theory to understand the harms caused by the current system. Most economic rationing decisions are made by women faced with having too little money to meet the healthcare needs of themselves and their families. Other vulnerable populations are also more likely to be faced with the complex problems that arise from economic rationing. This Article calls for folding that understanding into a broader conversation about rationing of care. We ought to acknowledge that we do ration, that it is done with money, and that this rationing has severe and otherwise preventable effects on people. In the face of this problem, the Medicare Drug Price Negotiation Program gives us a framework for better resource allocation and an improvement in people’s lives.
Recommended Citation
Jacqueline Fox, Medicare Drug Price Negotiations: A Blueprint for Ethical Pricing Across the Healthcare System, 19 FIU L. Rev. 71 (2025), https://doi.org/10.25148/lawrev.19.1.5.
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Health Law and Policy Commons, Law and Gender Commons, Law and Society Commons, Medical Jurisprudence Commons, Social Welfare Law Commons
