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August 3, 2012

How Can We Negotiate for Lower Prices in Antiretroviral Treatments?

Photo by MarcBruxelle/Getty Images

Antiretroviral (ARV) treatment has transformed HIV from a death sentence to a chronic condition, allowing people living with HIV to live longer and healthier lives. However, people living with HIV face significant barriers to accessing and affording ARV medications that are life-saving but expensive. High ARV prices create pressure for government payers to contain costs either by rationing care or by restricting eligibility for public programs. Limited funding, coupled with a growing demand for HIV care and treatment, is likely to make these hard programmatic decisions about who is covered more difficult over time.

In a recent study, Negotiation Strategies for Antiretroviral Drug Purchasers in the United States, RAND Health researchers explore the options that the federal government might use for negotiating lower procurement costs of ARVs.

  • System-wide options for changing the way prices are set by the government such as increasing price transparency, national procurement of prescription drugs, and switching of dually eligible beneficiaries from Medicare Part D to Medicaid are likely to affect ARV prices.
  • Paying rewards or subsidies for investors, such as prizes or commitments to pay a certain amount of money for developing a specific drug, is one type of change to the patent system that could address some of the shortcomings of the current U.S. system.
  • Increasing negotiating power through combined purchasing particularly among Medicare Part D drug plans is one negotiating strategy that could be pursued within the current system to bring down costs for ARV treatments.