AMA to study drug pricing to see if limits are warranted

A board trustee says amending long-standing Association policy against price controls would require careful review.

By David Glendinning, AMNews staff. July 3, 2006.

Chicago -- The American Medical Association has several strongly worded policies against government price controls on prescription drugs. But the first few months of physician experiences with Medicare Part D has prompted some doctors to say these policies could use some tweaking.

Delegates at the Annual Meeting debated a resolution that would have had the AMA call for the development and regulation of a maximum allowable cost for all prescription drugs sold in the United States. But although at least three Association policies reject such price ceilings, the House of Delegates referred the measure to the Board of Trustees for a report back at a future meeting rather than reject it outright.

Times have changed in the world of pharmaceuticals and health care since AMA delegates last amended the policies more than a decade ago, AMA Trustee Edward Langston, MD, said after the referral vote. Drug development and pricing has become much more of an international process that is often difficult to understand, and Medicare's new drug benefit adds a new layer to the system on which physicians must get a handle, he said.

"It seems appropriate to say, 'Let's take another look at these policies because the context has changed,' " Dr. Langston said. "Part D is part of that context, because seniors now have a source and a resource for drugs that has not been there."

Physicians arguing for a review of the AMA's policies said the study could shed more light on how much drug development really costs and how firms set prices accordingly. With the advent of Medicare-subsidized drugs that are offered to seniors and people with disabilities who pay fixed co-payments, the need to control rising drug prices becomes even more urgent, some delegates said.