HA415 Unit 10 Drug Price Negotiation Analysis Example

Course	HA415 Health Care Policy and Economics
Unit	Unit 10
Paper type	Policy analysis paper
Length	About 1,120 words, 7 pages double-spaced
Format	APA 7 student paper
School	Purdue University Global
Program	BS in Health Care Administration
Updated	October 2026

Free sample paper for HA415 Unit 10

Savings, Access and the Next Drug: A Policy Analysis Paper Weighing Medicare Drug Price Negotiation on Three Criteria at Once, Program Spending, Beneficiaries' Costs and the Incentives Behind Pharmaceutical Development

[Student Name]

Purdue University Global

HA415: Health Care Policy and Economics

Unit 10 Policy Analysis Paper

[Instructor Name]

[Date]

Dollar figures are bracketed where they should be taken from current CMS and budget office releases; the paper simplifies the program for a course analysis.

What this part is doingThe criteria are stated first, along with why they conflict, because the trade-off between them is what the paper exists to examine.

Introduction

Medicare spends more on prescription drugs every year, and a small number of high-priced drugs without competition account for a large share. A 2022 law, the Inflation Reduction Act, gave Medicare its first authority to negotiate prices for some of them. Supporters expect savings for Medicare and patients; critics warn of fewer new drugs. This paper asks how the program performs on three criteria, savings, access and innovation, and how to weigh them.

The Policy

The law directs Medicare to select high-spending drugs that lack generic or biosimilar competition and to negotiate a maximum fair price with each manufacturer (42 U.S.C. § 1320f, 2024). Small-molecule drugs become eligible for selection seven years after approval and biologics after eleven, with negotiated prices taking effect about two years after selection. The first ten Part D drugs, including treatments for diabetes, heart failure and blood clots, were selected in 2023, with prices effective January 1, 2026. Later cycles add more drugs each year and include Part B drugs given in physicians' offices from 2028. Manufacturers that refuse to negotiate face a steep excise tax or must withdraw their drugs from Medicare and Medicaid.

How Negotiation Works in Practice

For each selected drug, CMS sends an initial offer based on factors such as the drug's clinical benefit compared with alternatives, research and development costs and the prices of similar drugs. The manufacturer may make a counteroffer, and the two sides meet before a deadline. The law sets a ceiling on the negotiated price, a percentage of the drug's average price that falls as the drug ages on the market. The final price is published, which makes these the first public Medicare drug prices negotiated directly with manufacturers.

Criterion 1: Medicare Spending

CMS reported that if the first negotiated prices had applied in a recent year, net Medicare outlays for this first group would have fallen by about [22] percent, roughly [$6 billion]. Savings grow as more drugs are added. Savings depend on discounts compared with net prices after existing rebates, which are confidential, so the true reduction is hard to verify from outside. The program's savings are real but measured against confidential rebates, so outsiders can check the direction more easily than the size.

Criterion 2: Beneficiaries' Access and Costs

Beneficiaries who use the selected drugs pay coinsurance based on the drug's price in some phases of the Part D benefit, so lower prices reduce their costs; CMS projected about [$1.5 billion] in lower out-of-pocket spending in the first year. The separate Part D cap on annual out-of-pocket spending, also from the 2022 law, adds protection. Access could suffer if manufacturers withdraw drugs or if Part D plans restrict access to negotiated drugs because their rebates fall. Neither has happened widely so far, but plan formulary decisions deserve monitoring. Pharmacies have raised concerns about cash flow when they are reimbursed at the negotiated price after buying the drug at a higher price, which the program's payment process is meant to address.

What this part is doingEach criterion is assessed with its own evidence and its own uncertainty, so the reader can see where the paper is confident and where it is not.

Criterion 3: Incentives for Development

Pharmaceutical firms invest in research based on expected revenue. Studies find that larger expected markets attract more new drugs: the entry of new drugs responded strongly to changes in market size driven by population aging (Acemoglu & Linn, 2004), while a later cross-country study found a positive but smaller response of innovation to market size (Dubois et al., 2015). If negotiation lowers expected Medicare revenue late in a drug's life, some marginal projects may not be started. How large the effect will be is uncertain. Revenue in the years after negotiation is discounted heavily when a firm decides whether to begin a project a decade earlier, which limits the effect. On the other hand, the different eligibility periods for small molecules and biologics may shift investment toward biologics, a concern raised by some developers of small-molecule drugs for cancer.

Alternatives Considered

Other approaches could pursue the same goals. Medicare could set prices by reference to other countries' prices, which would produce larger savings but likely stronger industry opposition and greater effects on development. It could rely on faster generic and biosimilar entry, which protects innovation but helps only after exclusivity ends. Or it could cap beneficiaries' costs without changing prices, which protects patients but does nothing for program spending. Negotiation sits between these: smaller savings than reference pricing, earlier effect than waiting for generics.

Weighing the Criteria

Savings: strong and growing, though hard to measure precisely. Access and costs: improved for users of selected drugs, with risks to watch. Innovation: some reduction is likely, but the size is uncertain and probably modest relative to total development. Weighting depends on values. A policymaker who places great weight on future drugs may see the program as costly; one who weighs present affordability heavily will see it as overdue. This paper weighs present savings and access slightly more, because they are measurable now, while the innovation effect is uncertain and could be offset by other policies, such as public research funding.

Summary Table

1. Spending: positive, high confidence in direction.

2. Beneficiary costs: positive for users of selected drugs, moderate confidence.

3. Access: neutral so far, moderate risk.

4. Innovation: negative, low confidence in size.

Recommendations

What this part is doingEach recommendation answers a weakness found under one of the criteria, so the list can be traced back to the analysis.

1. Equalize the eligibility periods for small molecules and biologics to avoid steering investment.

2. Publish more information on negotiated discounts relative to net prices so savings can be verified.

3. Monitor Part D formularies for restrictions on negotiated drugs.

4. Track new drug starts by therapeutic area to detect any shift in development.

What Administrators Should Watch

Hospital and health plan administrators should watch how Part D plans change their formularies for negotiated drugs and whether pharmacies in their networks face cash-flow problems, since both affect patients locally before national data show any effect.

Limits

The program is new; most evidence comes from projections, not observed outcomes. Confidential rebates make savings hard to verify. The innovation literature studies market size changes that differ from negotiation in important ways.

Conclusion

Medicare drug price negotiation lowers spending and beneficiaries' costs for selected drugs, with an uncertain cost to future development. On balance the program is justified, but its design, especially the different treatment of small molecules and biologics, should be refined and its effects monitored closely as more drugs are added.

References

Acemoglu, D., & Linn, J. (2004). Market size in innovation: Theory and evidence from the pharmaceutical industry. The Quarterly Journal of Economics, 119(3), 1049-1090. https://doi.org/10.1162/0033553041502144

Dubois, P., de Mouzon, O., Scott-Morton, F., & Seabright, P. (2015). Market size and pharmaceutical innovation. The RAND Journal of Economics, 46(4), 844-871. https://doi.org/10.1111/1756-2171.12113

42 U.S.C. § 1320f (2024). https://www.law.cornell.edu/uscode/text/42/1320f

What the HA415 Unit 10 assignment asks for

Unit 10 typically closes the course with a policy analysis paper that evaluates a major health policy against stated criteria. Instructions usually require a precise description of the policy, criteria for evaluation, evidence under each criterion, consideration of alternatives, a weighted judgment and recommendations. Many instructors want the paper to explain why the criteria conflict. Support the analysis with the statute, economic studies and official estimates in APA format, mark figures due for revision and acknowledge uncertainty where evidence is projected rather than observed. A summary table near the end helps the reader compare criteria, and stating your weighting openly keeps the judgment honest. Keep each criterion under its own heading.

How the HA 415 Unit 10 example is put together

The sample states three criteria and why they conflict, with a margin note on that choice. The policy is described exactly, citing the statute, followed by how negotiation works in practice. Spending savings are reported with the caution that rebates are confidential, and the highlighted sentence notes that outsiders can check direction more easily than size. Beneficiary costs and access follow, with a margin note on separate uncertainty. Innovation cites two studies of market size and drug development. Alternatives, weighting, a summary table, recommendations with a third note, what hospital and plan administrators should watch, limits of projected evidence and a conclusion that states a judgment close the paper.

Reading the HA415 Unit 10 grading rubric

Policy analysis rubrics in HA 415 usually award points for describing the policy, defining criteria, presenting evidence, considering alternatives, weighing trade-offs, recommending changes, citing sources and organizing the paper by criterion. Graders want the policy described exactly, with correct dates, eligibility and mechanisms. Criteria points go to explicit standards and why they conflict. Evidence points reward sources under each criterion with stated confidence. Alternative points require realistic options. Trade-off points go to an open weighting. Recommendation points need actions tied to findings. Source points require statute, research and official estimates. Papers with a summary table and openly stated weights tend to score best, since graders can follow exactly how the judgment was reached.

Common HA415 Unit 10 mistakes, and how to avoid them

Policy analysis papers often lose points by arguing for or against a policy without stating criteria. Another gap is misstating the policy's details, which public debate often does. Some papers present projections as observed results. Others weigh criteria without saying how. Describe the policy exactly, set criteria and explain why they conflict, assess evidence under each with its confidence, compare alternatives, weigh the criteria openly and recommend specific changes. Then add limits and a conclusion that states your judgment plainly. Bracket figures from official releases, since they are revised as each negotiation cycle is completed. If you add a section on what administrators should watch locally, keep it short and practical.

Get an HA415 Unit 10 example written to your instructions

Send the Unit 10 policy, whether assigned or picked by you, with the rubric and any required criteria. The finished analysis reaches you within 24-48h, each criterion weighed on its own evidence, with a date on each program fact. Your first sample is free, and figures stay bracketed until you confirm them. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.

More HA415 papers and BS in Health Care Administration samples

HA415 Unit 10 questions, answered

Where can I find a free HA415 Unit 10 sample paper?

The complete HA415 Unit 10 policy analysis paper is available here, weighing Medicare drug price negotiation on spending, beneficiary costs and innovation, with three sources. Your own policy can be weighed on criteria the same way.

How does Medicare drug price negotiation work?

Medicare selects high-spending drugs without generic or biosimilar competition and negotiates a maximum fair price with each manufacturer.

When are drugs eligible for negotiation?

Small-molecule drugs about seven years after approval and biologics about eleven, with prices taking effect about two years later.

Will negotiation reduce new drug development?

Some reduction is likely because expected revenue falls, but estimates of the size vary and are uncertain.

How long is the HA415 Unit 10 paper?

Seven to eight pages with headings for each criterion and a summary table near the end.