What is the role of the government in setting drug prices?

The government has a large role in setting drug prices in Washington. The government sets a maximum price for certain drugs called "maximum allowable cost" (MAC) prices. These prices are set in order to ensure that consumers are not overcharged for their prescription drugs. In addition to setting maximum prices, the government also sets a minimum price for certain drugs, called "price floors," which protect consumers from being charged too little for their drugs. In addition to setting maximum and minimum prices, the government also regulates how much pharmaceutical companies can charge for their drugs. The government sets "pricing panels" that review and approve drug prices for certain drugs, as well as examine industry pricing trends to ensure that companies are not overcharging for their products. The government also plays a role in increasing access to drugs at a lower cost. For example, the government negotiates with pharmaceutical companies to provide some drugs at significantly reduced prices through the Medicare Part D and Medicaid programs. Additionally, the government subsidizes some drugs in order to make them more affordable for the general public. Overall, the government plays a crucial role in setting drug prices in Washington in order to ensure that consumers are not overcharged for their prescriptions, as well as to increase access to drugs at a lower cost.

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