By: John Shearer, Esq. On September 19th, Speaker Pelosi revealed a progressive solution to a problem currently consuming roughly 1.3% of the U.S. GDP and costing patients approximately $61 billion in out-of-pocket expenses. Pelosi’s proposal, expected to hit the House floor in mid-October, mirrors the Trump Administration’s October ‘18 proposal to lower prescription drug costs. Both proposals would index U.S. drug prices to that of foreign markets, such as Canada, Britain, and Japan, known as an international price index, or IPI. The proposals also create authority in the Secretary of Health and Human Services (HHS) to negotiate prices with pharmaceutical manufacturers. Both proposals would also cap out-of-pocket expenses under Medicare Part D once the patient reaches the catastrophic coverage phase. Despite the seemingly bipartisan solution, Pelosi’s proposal is far more progressive, sparking pushback from Republicans in Congress. The Trump Administration’s proposal applies only to a small number of prescription medicines and is limited to purchases under Medicare Part B and portions of Part D. Pelosi’s proposal, on the other hand, mandates that HHS negotiate pricing on a minimum of 25 identified drugs per year, and allows negotiations on up to 250 identified drugs per year. The out-of-pocket cap for seniors in Pelosi’s proposal is set $2,000, a lower rate than what is currently being proposed by the Trump Administration. The more glaring discrepancies pertain to the applicability of price setting and the punitive measures to enforce those negotiated prices. Pelosi’s proposal will apply the negotiated and indexed rates to both Medicare and the commercial market while also blocking price increases on many existing drugs. Pelosi’s proposal also contains punitive taxation (65% of the prior year’s sales of the drug in question) for companies that fail to adhere to the negotiated prices. It would also require the reinvestment of any applicable savings into the National Institutes of Health (NIH). The Trump Administration’s proposal on the other hand, applies only to Medicare, does not currently contain enforcement measures, and creates prescription drug importation measures, a major component not found within Pelosi’s proposal. Opponents to both proposals are largely concerned with the potential impact on pharmaceutical research and innovation if the current market-based pricing system is eliminated. For example, indexing prices to that of single-payer healthcare systems with more restrictive pricing policies may very well lead to unintended global price increases. To recoup foregone profits, pharmaceutical manufacturers could raise prices on non-negotiated drugs or increase prices on any new drugs. Price ceilings can also stymie research initiatives as decreased returns on investments will lead to a decline in research and development spending in the private sector. Notwithstanding disagreement over the effectiveness and impact of both proposals, one thing is certain, Pelosi’s proposal will require a buy-in from the Whitehouse to generate any meaningful support amongst Republicans. While Whitehouse support is becoming more unlikely, Pelosi provided House Democrats a strong drug pricing platform to run on in 2020. Recent polls indicate strong bipartisan support on lowering prescription drug costs, but it is unclear whether either side is willing to cross the aisle and find a solution they can agree on.