By NextBestFitPhase 1: Enactment & build · Step 1.9
Create the national formulary & negotiate drug prices
Months 0–18 for the initial formulary; continuous negotiation · National Formulary and Pricing Board; HTA InstituteDiscuss this step
A National Formulary and Pricing Board covers every FDA-approved drug with a negotiated price. Retail drug spending falls from $467.0B to $380.1B (price effect −$113.1B, utilization +$26.2B).
Legal vehicle
Universal Health Act, Title VI; extends IRA negotiation (SSA §1191 et seq.) to all drugs; 28 U.S.C. §1498 backstop.
Who does it
National Formulary and Pricing Board; HTA Institute
When
Months 0–18 for the initial formulary; continuous negotiation
One-time cost
$1.5B
Recurring, per year
−$86.9B
Ledger line 'Retail prescription drugs': $467.0B → $380.1B. Board start-up $1.5B one-time.
In this step
Tasks
7 tasks
Design choice & alternatives
1 decisions with alternatives
Costs & calculations
3 cost items, each with its calculation
Trade-offs
3 pros · 3 cons · 2 trade-offs
Risks
3 risks with mitigations
What changes in the system
10 existing laws, programs, or institutions changed
Other countries
7 comparisons
Cost items
- Retail prescription drugs$380.1B
- Formulary & technology-assessment start-up$1.5B
- Pharmaceutical manufacturer revenue−$84.8B
Biggest risk for this step
Larger-than-expected drop in drug innovation. See risks.
Steps that depend on this one
None.