22 May 2016 - Government action might not be needed to pressure prices on some drugs.

A comprehensive government crackdown on high drug prices isn’t likely soon. Still, investors shouldn’t let their guard down.

Biotech and pharmaceutical stocks have struggled since last summer when the controversy erupted into a big political issue. Last week’s congressional hearing on the Obama administration’s proposed experimental overhaul of the Medicare Part B program served as a reminder of pricing peril.

One aspect—details will be finalized this year—could allow future administrations to empower the Centers for Medicare and Medicaid Services to use “value-based purchasing.” These tools might allow CMS to offer incentives for the use of biosimilars, lower-cost versions of biologic drugs analogous to traditional generics.

For more details, go to: http://www.wsj.com/articles/drug-pricing-debate-looking-past-big-pharmas-nightmare-scenario-1463933850