Protesters outside the PhRMA headquarters in Washington, DC, protest against lobbying by pharmaceutical companies to prevent Medicare from negotiating lower prescription drug prices.
Saul Loeb / AFP via Getty Images
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Saul Loeb / AFP via Getty Images
Protesters outside the PhRMA headquarters in Washington, DC, protest against lobbying by pharmaceutical companies to prevent Medicare from negotiating lower prescription drug prices.
Saul Loeb / AFP via Getty Images
American pay more compared to people in other countries for prescription drugs. This drove voters crazy, and although lawmakers have vowed to do something about it for decades, they haven’t made much progress.
That could change as soon as this week. The Inflation Reduction Act — introduced by Senate Majority Leader Chuck Schumer, DN.Y., and Senator Joe Manchin, DW.V. – includes some regulations on drug prices and health insurance. The Senate is planning to put the bill to a vote on Saturday, and it appears to be on track to pass Congress and be signed into law by President Biden.
This is all music to the ears of patients who have been burdened with high-priced drugs for years.
Medicare recipient Bob Parant, 69, of Westbury, New York, said: “The proposal to limit out-of-pocket expenses is now on the table absolutely will make a huge difference in my life.” He has Type 1 diabetes and pays about $5,000 out-of-pocket for insulin each year, in addition to thousands of dollars for a heart drug.
Below are details about that and other proposals in the measure and answers to some frequently asked questions.
What exactly is Congress changing on drug prices?
For the first time, the federal health minister can directly negotiate the price of certain expensive drugs each year for Medicare. This process starts in 2026 with 10 drugs and increases to 20 drugs by 2029. To qualify for the negotiation, the drugs will have to be on the market for several years.
Then there’s the proposition that Parant is most interested in: Medicare users won’t have to pay more than $2,000 a year out-of-pocket per year for prescription drugs, which would make a huge difference to those who don’t. elderly people with certain diseases such as cancer and multiple sclerosis. This will start in 2025.
And, starting next year, if drug companies raise the prices of their drugs faster than inflation, they will have to pay a refund to Medicare. That could affect a lot of drugs, according to an analysis by the Kaiser Family Foundation; in the year 2019-20, half of the prescriptions Medicare-covered prices rise faster than inflation. This provision can help prevent pharmaceutical companies from continually raising prices.
Do experts think it will make a difference?
In fact, many health policy experts say the changes are significant.
“This is a big breakthrough,” Tricia Neuman, who directs the Program on Medicare Policy at KFF. “Congress has been talking about doing something about drug prices for decades. [This] It may not be everything everyone wants, but it really is a big deal and it will be of great help to literally millions of people who need it. “
“That’s a big deal,” agreed Stacie Dusetzina, professor of health policy at Vanderbilt University. “It really breaks a lot of new ground and fixes a lot of problems.”
Congressional Budget Office, analyzed an earlier version of the billIt is estimated that these changes will save the government $288 billion through 2031.
Why does it take so long for many of these to work?
For someone who is on Medicare and spends $10,000 a year on cancer treatment, like Neuman’s friend, the timing of these changes can be hard to come by.
“Obviously, next year she’ll be wondering, ‘Why do I still have to pay so much?'” Neuman said. “Some things just can’t happen fast enough just because it takes a while to get things moving.” Federal health agencies and industry groups will have to work a lot to get these provisions in place.
Neuman says she understands people are anxious to get relief, but once provisions like out-of-pocket in Medicare go into effect, “this is really going to be a big problem for people who rely on expensive drugs.” money and other people watched their drugs. The price went up every year.”
I heard the bill would lead to fewer new drugs. Is that true?
This is an argument made by drug manufacturers to try and scare people into opposing these changes. The pharmaceutical and health products industry spent more money on lobbying Congress by 2022 than any other industry, according to Nonprofit Open Secret. It is difficult to prevent these changes from becoming law because they will cut their profits.
For example, PhRMA, the US Drug Research and Manufacturing Agency, is making its case in an advertising campaign that the drug pricing provisions in the bill could lead to fewer new drugs coming to market due to “research and development”. The trade association also indicates the NPR for this industry-sponsored analysis from Avalereestimates the bill could reduce the drugmaker’s revenue by $450 billion by 2032.
But one analysis by the Congressional Budget Office Estimates of the impact on drug development would be rather modest. About 15 of the 1,300 drugs won’t be on the market in the next 30 years – that’s about 1% of new drugs. In addition, most major drug companies spend more on marketing rather than research and development.
Some ads claim that Medicare will be cut. Is this right?
These ads are misleading. For example, a project named Commitment to seniors launched a seven-figure ad campaign claiming that the Senate bill would “scratch nearly $300 billion from Medicare.” In fact, that’s what the government is expected to save because Medicare won’t have to pay a lot for expensive drugs, which isn’t money taken out of Medicare’s budget. So, importantly, seniors’ benefits will not be cut.
“When people see a TV ad from a group called Pledge to Aging, it sounds innocuous.” Michael Beckel of Issue A dark money watcher. As it turns out, Pledge to Aging is a project of another group, Pledge of America, brought PhRMA over a million dollarsconsists of $325,000 in 2020.
Beckel says it’s not uncommon to see the industry engage in such tactics. “The pharmaceutical industry is a major lobbying force and big dark money player.”
What about insulin? Do people with diabetes get help with those prices?
Insulin is often the go-to drug for kids when it comes to price out of control and life and death bets. US insulin price is four times higher after discounts, on average, compared to other countries, and about 1 in 4 diabetics reported that they took less insulin than prescribed because they could not afford it. At this point, it’s unclear whether any of the proposed reforms to insulin pricing – or at least patient out-of-pocket costs – will make it into the final bill.
A provision for copay limit at $35 a month for people with insurance taking insulin has bipartisan support, but may not be included in the final bill.
What else is in the health bill?
Another key piece of the bill protects consumers from a potentially disastrous change that could happen without the new law.
Those who buy insurance in the Affordable Care Act market – like Healthcare.gov and state markets – will be able to keep generous premium subsidies for another three years. After these additional benefits went into effect when the American Rescue Plan was passed, the government estimated 4 out of 5 applicants were eligible for a plan with a premium of $10 or less per month.
Krutika Aminwho works with Neuman at the KFF, says it’s important that lawmakers cut this extension now, as insurers are currently setting their rates for next year’s plans in advance. Open enrollment in the fall.
“If Congress can extend additional benefits before the August recession, it will help provide certainty for both insurers and the federal and state agencies that are operating [the marketplaces] to be able to deploy it in a way that is seamless for consumers,” she said.
The extra discount on packages made all the difference. Last year 14.5 million people – more than ever – signed up for coverage on Healthcare.gov, and an initial analysis from HHS shows the total number of uninsured people in the US hit a record low in the first months of this year.
NPR Pharmacy reporter Sydney Lupkin contributed reporting.
