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Strategies for Addressing Medicare Drug Pricing

Chao Zhou, Ph.D., and Nathan West, MPA

White Paper

June 2, 2022

U.S. drug spending has increased dramatically in the last 20 years. Americans pay the highest drug prices in the world, which leads to higher direct spending for patients and payers—both in the private and government sectors. Meanwhile, health plans are forced to raise premiums or make benefits less generous as prices continue to skyrocket.  In this paper, Abt authors highlight the causes of these increases, and identify possible strategies that the Center for Medicare & Medicaid Services (CMS) could pursue to combat the rise in prices. Additionally, previous work for CMS and others is cited to help illustrate how research and evaluations can help identify and validate strategies.