US embarks on reforms to temper soaring prices of prescription medicines

As a move in the direction of stemming surging prescription medicine prices, the United States government has introduced reforms meant to limit the financial burden to an estimated number of millions of Americans. The new initiatives fall in sync with the aspect that the country is finding it challenging to reign in prescription medication prices, which stand at 256% higher than the average price in OECD.

At the heart of the reforms is a historic shift: Medicare will now have the authority to negotiate drug prices for costly medications, a move long resisted by drug companies. The initiative begins with 10 priority drugs and will add more treatments incrementally in the coming years.

Additionally, drug makers will be required to pay rebates for inflation if they raise prices faster than inflation. That is intended to discourage arbitrary and excessive price hikes.

Beyond benefiting patients, and especially the aged, out-of-pocket expenses by Medicare patients are now capped at $2,000 annually to spare those living with chronic ailments and having to deal with skyrocketing drug prices. The reform package also includes capping an insulin co-pay of $35 monthly, another widely welcomed shift for diabetics who had difficulty affording the life-preserving medication.

"These reforms are about restoring fairness," said a spokesperson for the Department of Health and Human Services. "Americans have been overpaying too long. We're finally starting to do something about it."

The pharmaceutical industry has grumbled that lower sales would damage innovation. But health economists and advocates say the changes are overdue and necessary to align U.S. prices with the rest of the world.

As it begins implementation, the world is watching how these record reforms will reshape the healthcare landscape—and if they will spur greater global action to contain medicine prices.