The four articles preceding this one have established the factual foundation: Americans pay two to three times more for prescription drugs than people in peer countries; the pricing chain runs through manufacturers, PBMs, and insurers in ways that create perverse incentives for high list prices; the insulin crisis illustrates what happens when that system meets inelastic demand; and peer countries have developed a range of mechanisms that produce lower prices with documented tradeoffs. This article surveys what reform proposals are currently on the table in the United States — their current status, their proponents, and the arguments against them.
This is not a recommendation for any approach. It is a map of the debate as it currently stands, intended as the foundation for the deliberative work of this hub.
Medicare Drug Price Negotiation
What it is: The Inflation Reduction Act of 2022 created the first statutory authority for Medicare to negotiate drug prices directly with manufacturers. Before the IRA, the Medicare Modernization Act of 2003 explicitly prohibited Medicare from negotiating — a provision that had been a target of reform advocates for nearly two decades.
Current status: The IRA’s negotiation program began with 10 drugs for 2026, expanding to 15 drugs for 2027, 15 more for 2028, and 20 per year thereafter. The first negotiated prices were announced in August 2024 and showed reductions of 38 to 79 percent from list prices for drugs including Eliquis, Januvia, Jardiance, and Xarelto. Several pharmaceutical manufacturers filed legal challenges arguing the negotiation process was unconstitutional; federal courts have rejected those challenges as of early 2026.
Proponents: The negotiation authority has broad public support across party lines. Proponents include patient advocacy organizations, AARP, consumer groups, and a substantial portion of both Democratic and Republican voters who support Medicare negotiation in polling.
Arguments against: Pharmaceutical manufacturers and their trade association, PhRMA, argue that negotiated prices will reduce R&D investment and reduce access to new treatments for Medicare patients. They argue the negotiation process is coercive rather than genuinely voluntary. Some economists argue the IRA’s price floors and scope limitations reduce the program’s savings potential. Some conservatives argue the program represents inappropriate government intervention in market pricing.
Limitations of current law: The IRA’s negotiation authority applies only to Medicare Part D and Part B drugs, not to commercially insured patients. It applies to a limited number of drugs per year. Drugs that have been on the market for fewer than nine years (small molecules) or thirteen years (biologics) are not eligible for negotiation. The negotiated prices apply only to Medicare beneficiaries, not to the broader insurance market.
Price Transparency Requirements
What it is: Price transparency proposals require manufacturers, PBMs, insurers, or hospitals to disclose the prices they charge and the rebates they receive, making the pricing chain visible to regulators, plan sponsors, and in some cases the public.
Current status: Federal transparency requirements have expanded incrementally. The No Surprises Act of 2020 included provisions requiring hospitals to publish their prices. Executive orders in both the Trump and Biden administrations addressed drug price transparency in different ways. Several states have passed PBM transparency laws requiring disclosure of spread pricing and rebate retention. The FTC’s ongoing investigation into PBM practices is producing some disclosure of information that was previously unavailable to regulators.
Proponents: Transparency proposals have broad bipartisan support because they do not directly control prices — they make existing prices visible. Supporters argue that transparency enables employers, plan sponsors, and regulators to negotiate more effectively and identify anticompetitive practices. Patient advocates argue that patients have a right to know what drugs cost before they reach the pharmacy.
Arguments against: Manufacturers and PBMs argue that contract confidentiality protects commercially sensitive information and that mandatory disclosure could harm negotiating leverage — if manufacturers know what competitors are offering in rebates, they can calibrate their offers accordingly rather than competing independently. Some economists argue that price transparency in concentrated markets can facilitate coordination rather than competition, potentially raising prices rather than lowering them.
Limitations: Transparency without enforcement authority has limited effect on prices. Disclosing that a PBM retains a large share of manufacturer rebates does not by itself require that practice to change. Transparency is most useful as a predicate for other interventions — it enables regulators and plan sponsors to identify practices that warrant further action.
PBM Reform
What it is: PBM reform proposals target the rebate system, spread pricing, vertical integration, and transparency practices that critics argue have contributed to high drug list prices and reduced competition among pharmacies.
Current status: PBM reform has been one of the most active areas of bipartisan legislative activity in drug pricing. The Pharmacy Benefit Manager Reform Act passed the Senate Commerce Committee in 2023 with bipartisan support. Several provisions targeting PBMs were included in various legislative packages. As of early 2026, comprehensive federal PBM reform legislation had not passed, but individual provisions — including rebate reform, spread pricing restrictions, and transparency requirements — continued to move through the legislative process. State-level PBM regulation has advanced further, with more than 30 states passing some form of PBM oversight legislation.
Proponents: PBM reform has unusual cross-partisan support. Independent pharmacies, patient advocates, employers, rural healthcare advocates, and politicians from both parties have supported various PBM reform measures. The FTC’s findings on PBM practices have strengthened the reform coalition.
Arguments against: PBMs and their trade association argue that they save the healthcare system money by negotiating rebates and managing drug benefits efficiently, and that reform proposals would increase costs for plan sponsors and patients. Large insurers that own PBMs argue that vertical integration produces efficiencies that would be lost under breakup or separation requirements. Some analysts argue that rebate reform — eliminating rebates in favor of upfront discounts — could raise premiums for insured patients while lowering out-of-pocket costs for those at the pharmacy counter, producing distributional effects that are difficult to predict.
Limitations: PBM reform addresses one component of the pricing system without addressing manufacturer pricing power, the absence of centralized negotiation, or the structural features that allow list prices to diverge significantly from net prices. It is most effective in combination with other reforms rather than as a standalone intervention.
Reference Pricing Proposals
What it is: Reference pricing proposals would tie US drug prices — for Medicare, Medicaid, or the broader market — to prices in peer countries. The most prominent recent proposal was the International Pricing Index model advanced by the Trump administration’s Center for Medicare and Medicaid Innovation in 2018, which would have tied Medicare Part B drug payments to an index of prices in 14 peer countries.
Current status: The International Pricing Index model was proposed but not implemented. Reference pricing provisions have appeared in various legislative proposals but have not been enacted at the federal level. The IRA’s negotiation framework does not use international reference pricing, though some proposals would add an international benchmark as a floor or ceiling on negotiated prices.
Proponents: Reference pricing proposals have support from patient advocates, some economists, and legislators who argue that the US market should not be required to pay substantially more than peer countries for the same drugs. The international price comparison data — Americans paying two to three times peer-country prices — is the empirical foundation for reference pricing arguments.
Arguments against: Pharmaceutical manufacturers argue that reference pricing would import other countries’ price controls into the US market, reducing manufacturer revenue and R&D investment. Some analysts argue that international prices reflect different market structures and healthcare systems that are not directly comparable to the US context. Countries that use external reference pricing have experienced delayed drug launches in their markets — manufacturers sometimes introduce drugs in high-price markets first and delay launches in reference countries — and critics argue US reference pricing would produce similar effects.
Limitations: Reference pricing addresses the level of prices relative to international benchmarks but does not directly address the pricing chain mechanisms — rebates, PBM practices, spread pricing — that contribute to high US prices. It is most effective as a ceiling on negotiated prices rather than as a standalone mechanism.
Drug Importation from Canada
What it is: Importation proposals would allow patients, pharmacies, or states to purchase drugs from Canadian pharmacies or wholesalers at Canadian prices — which are substantially lower than US prices for most brand-name drugs — and import them into the United States.
Current status: The FDA has the authority to allow importation programs under certain circumstances. The Trump administration finalized a rule in 2020 allowing states to apply for importation programs. Florida and several other states received FDA authorization for importation programs in 2023 and 2024. As of early 2026, Florida’s program was operational at limited scale. Canada’s federal government has expressed concern about US importation programs diverting drug supplies intended for Canadian patients, and Canadian provinces have taken steps to limit drug exports.
Proponents: Importation proposals have significant public support and bipartisan political backing. Patient advocates point to concrete examples — the same insulin that costs $300 in the US available for $30 across the border — as evidence that importation could produce immediate affordability relief. Some governors and state legislators have pursued importation as a state-level response to federal inaction on drug pricing.
Arguments against: Manufacturers argue that importation creates supply chain integrity and drug safety risks — that counterfeit or improperly stored drugs could enter the US supply chain through importation channels. The FDA has historically cited safety concerns in limiting importation. Canada’s concern about supply diversion is a practical constraint: the Canadian drug market is much smaller than the US market, and large-scale importation could reduce supply available to Canadian patients. Some analysts argue that manufacturers would respond to large-scale importation by restricting supply to Canada, undermining the mechanism.
Limitations: Importation addresses prices for patients who can access imported drugs but does not change the underlying US pricing system. Canada’s market is not large enough to supply the US demand for most drugs at scale. It functions best as a pressure mechanism and a relief valve for specific high-cost drugs rather than as a systemic solution.
What the Survey Establishes
No single proposal addresses all dimensions of the drug pricing problem. Medicare negotiation reduces prices for a limited set of drugs for Medicare patients. Transparency requirements make the pricing chain more visible without directly controlling what happens within it. PBM reform addresses intermediary practices without addressing manufacturer pricing power. Reference pricing sets international benchmarks without changing domestic pricing mechanisms. Importation provides relief for specific drugs at limited scale without transforming the system.
The countries that have achieved durable, broad-based drug price moderation have typically combined multiple mechanisms — centralized negotiation, HTA-based coverage decisions, reference pricing, and transparency requirements — operating together within a healthcare system designed around single-payer or tightly regulated multi-payer structures that the United States does not currently have.
What combination of reforms is appropriate for the United States — given its existing healthcare structure, its political constraints, and the specific experiences of the people most affected by current pricing — is the question this hub’s deliberative process is designed to work through. The survey here is a starting point. The forum is where the work continues.
- Getting Started
- What Americans Pay and Why: The Basics of Drug Pricing
- The Issue Pipeline
- What Is Deliberation?
This article was researched and drafted with AI assistance under human review. See our full AI and editorial practices.