HHS chief: EpiPen cost surge shows need for negotiating power

HHS chief: EpiPen cost surge shows need for negotiating power
© Greg Nash

President Obama’s top health official said Thursday that the uproar over EpiPen pricing shows why the federal government should have the power to negotiate drug costs.

Health and Human Services Secretary Sylvia Mathews Burwell said drug prices would be better controlled if Medicare and Medicaid could directly push pharmaceutical companies to lower costs.

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“One of the most important tools that we could gain would be an ability to negotiate,” Burwell said in her first public remarks about the pricing scandal at The Atlantic's Washington Ideas Forum on Thursday.

"Access to drugs, and affordable access to drugs, we think is a priority. We need to take steps as a nation to make sure we do that," Burwell said.

Congress has applied intense scrutiny to the life-saving EpiPen devices after the cost of a two-pack of allergy shots skyrocketed to $608 this year, up nearly 550 percent since 2007. Many lawmakers in both parties have written to Burwell and to the Department of Justice urging probes into the company's practices. 

The federal government is the largest spender on healthcare in the U.S. Medicare alone spent $87 million on EpiPens in 2014, up 1,151 percent since 2007, according to a recent study by the Kaiser Family Foundation.

The drugmaker behind EpiPen, Mylan Pharmaceuticals, has also been accused of gaming the system under Medicaid by classifying the drug in a way that lowers its reimbursement rates by about half.

The Obama administration has stepped up its calls for Medicare negotiation in the last two years as the rising cost of prescription drugs has burst into public view.

Both presidential candidates have also said they would allow Medicare to negotiate drug prices, though the idea has been touted far more by Democratic nominee Hillary ClintonHillary Diane Rodham ClintonDemocratic insiders stay on the sidelines in 2020 race Hillicon Valley: Twitter falling short on pledge to verify primary candidates | Barr vows to make surveillance reforms after watchdog report | DHS cyber chief focused on 2020 The Hill's Campaign Report: High stakes at last Democratic debate before Super Tuesday MORE than by the GOP’s Donald TrumpDonald John TrumpWinners and losers from the South Carolina debate Five takeaways from the Democratic debate Democrats duke it out in most negative debate so far MORE.

Both have predicted billions of dollars in savings, though the claims have been criticized by some health experts, who argue that millions of people under Medicare’s Part D drug benefit program already use private companies to help offset costs.

- This story was updated at 12:15 p.m.