19 November 2019 - Arbitration in determining prescription drug prices is a viable mechanism to address the burden of high and escalating pharmaceutical prices in the U.S. market and builds upon existing policy in favour of drug-price negotiation—and opposed to price controls, says an AMA Council on Medical Services report whose recommendations were adopted at the 2019 AMA Interim Meeting in San Diego.

“Using arbitration will help rebalance the importance of prescription drug affordability with the need for innovation, as an alternative to the status quo, which allows unilateral price setting of drugs by manufacturers without regard to patient access and affordability,” says the report. “Importantly, arbitration provides an incentive for drug manufacturers and payers to arrive at a negotiated price.”

Legislative proposals have also been introduced that would use the average of a drug’s price internationally to serve as an upper limit in drug price negotiations, set a drug’s price or determine whether a drug’s price is “excessive” to trigger additional interventions. The report recommends safeguards to ensure that such international drug price averages are used in a way that uphold market-based principles and preserve patient access to necessary medications.

Read American Medical Association article