Amplify: Democratic Wins on Prescription Drug Affordability
By Bennett Gross
This week, Republicans have created historic chaos in the House, and Donald Trump is fending off indictments and the potential loss of his fraudulent real estate business. However, the Biden Administration continues to make real progress in its fight to lower health care costs for seniors and families.
On Tuesday, the Administration announced that manufacturers have agreed to negotiate with Medicare to reduce prices for 10 targeted, highly expensive medications used by millions of Americans. (See White House statement.) For decades, Big Pharma’s massive lobbying efforts have enabled drug companies to charge Americans two to three times more than what people in other countries pay for the same exact drugs. Now, under the Inflation Reduction Act, manufacturers are required – for the first time -- to negotiate the prices they charge Medicare recipients.
Certain manufacturers have filed suit to block the discussions, claiming that the penalties under the Act for refusing to negotiate prices are unconstitutional. However, even some manufacturers backing this litigation have, nevertheless, joined the negotiations, which is a major step forward for the Administration in lowering prescription drug costs for millions of Americans.
Here’s what you need to know:
The 10 drugs currently targeted for negotiation are high priced medications used to treat major health issues, such as heart failure, diabetes, arthritis, cancers, blood clots, etc.
In 2022, these drugs cost 9 million Medicare recipients approximately $3.4 billion in out-of-pocket costs.
The Congressional Budget Office projects that the negotiations will save the government over $100 billion over a decade and Medicare beneficiaries will save thousands annually.
Over the next four years, Medicare will be negotiating prices for 60 more drugs – and will be targeting 20 additional drugs each year thereafter – meaning that the savings will continue to increase.
In addition to these ongoing drug price negotiations, the Inflation Reduction Act will also improve the affordability of health care for millions of Americans for example by:
Preventing drug companies from raising Medicare prices in excess of inflation, which is particularly important since in 2020 the prices of half of all Medicare-covered drugs rose faster than the rate of inflation.
Capping out-of-pocket costs for Medicare recipients at just $2,000/year for prescription drugs and at $35 monthly for insulin. This alone will reduce costs for over a million Medicare recipients.
Extending enhanced subsidies and making tax credits available to middle-class families facing high premiums for marketplace coverage and guaranteeing affordable coverage options for lower-income people. Without these programs, it’s projected that 10 million Americans would have lost their subsidies or seen them dramatically reduced, and three million Americans would have lost all coverage.
Sources:
https://www.bassberry.com/news/medicare-drug-negotiation-program-in-inflation-reduction-act/
https://www.americanprogress.org/article/how-the-inflation-reduction-act-reduces-health-care-costs/
