CBOâ€™s Model of Drug Price Negotiations Under the Elijah E. Cummings Lower Drug Costs Now Act: Working Paper 2021-01
Christopher Adams and
No 56905, Working Papers from Congressional Budget Office
One of the inputs that the Congressional Budget Office used to estimate the budgetary effects of the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3) is a simulation model of price negotiations. CBO modeled those negotiations using a Nash bargaining framework, which was based on the gains to each partyâ€”the government and the manufacturerâ€”from a successful negotiation. The gain to the government was estimated to be the avoided cost of purchasing the next-best alternative treatment, plus the incremental clinical value of using the drug of interest instead of the
JEL-codes: I11 I18 (search for similar items in EconPapers)
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