WASHINGTON — As the cost of prescription drugs has skyrocketed for decades, Democrats have battled the drug industry in pursuit of an elusive goal: legislation that would drive down prices by allowing Medicare to negotiate directly with drugmakers.
Now, they’re on the verge of passing a broad budget bill that can do just that, and in the process deliver a political victory for President Biden that he and his party can bring to voters in November.
Authorizing Medicare to initially negotiate prices for up to 10 drugs — and more later — along with several other provisions aimed at lowering health care costs, would be the biggest change in health policy since the Affordable Care Act became law in 2010. Major changes affecting major segments of the population. It could save some older Americans thousands of dollars a year in drug bills.
The legislation would extend for three years the larger premium subsidies that low- and middle-income earners receive during the coronavirus pandemic to get health insurance under the Affordable Care Act and allow those high-income earners who qualify for such subsidies during the pandemic Crowd epidemics to keep them. It will also allow drugmakers to absorb some drug costs whose prices are rising faster than inflation.
Notably, it would also limit Medicare recipients to $2,000 a year for drugs at a pharmacy — a huge benefit for healthcare providers. 1.4 million beneficiaries They cost more than that each year, often on drugs to treat serious conditions like cancer and multiple sclerosis.
Lower prices would make a huge difference in the lives of people like Catherine Horine, 67, a retired secretary and lung recipient in Wheeling, Illinois. She lives alone and earns about $24,000 a year on a regular basis. Her annual out-of-pocket drug costs are about $6,000. She’s digging through her savings, worried she’ll run out of money soon.
“Two years ago, my income was $8,000,” she said. “Last year, I got in $15,000. I expect more this year because of inflation.”
Average price between 2009 and 2018 more than doubled The Congressional Budget Office found that for brand-name prescription drugs in Medicare Part D, the program covers products dispensed at pharmacies. Price rises outpace inflation in 2019-2020 half of all drugs Medicare coverage, according to an analysis by the Kaiser Family Foundation.
This budget office estimates The bill’s prescription drug provisions would save the federal government $288 billion over 10 years, in part by forcing the drug industry to accept the lower prices Medicare offers some of its big sellers.
Opponents argue the measure will hinder innovation and cite new analysis The budget office expects that when a drug first hits the market, it will actually lead to higher prices.
As the midterm elections loom, that’s where President Biden stands.
Drugs to treat common diseases that affect older adults, such as cancer and diabetes, are most likely to be selected for negotiation. Analysts at investment bank SVB Securities pointed to blood thinner Eliquis, cancer drug Imbruvica and diabetes and obesity drug Ozempic as three possible first targets in talks.
Until recently, the idea of Medicare about 64 million The beneficiaries, being able to use their power to strike deals with drugmakers is unimaginable. Democrats have been pushing for President Bill Clinton’s controversial health care reform package in 1993. Intense lobbying by the pharmaceutical industry against it has become Washington legend.
“It’s like lifting the curse,” Sen. Ron Wyden, D-Oregon, who framed the measure, said of the terms of the Medicare negotiation. “Big Pharma has been protecting the negotiating ban like it’s the Holy Grail.”
David Mitchell, 72, is one of those who will be helped. A retired Washington, D.C. public relations worker, he learned in 2010 that he had multiple myeloma, an incurable blood cancer. He pays $16,000 a year out of pocket for one of the four drugs he takes. He also founded an advocacy group, “Affordable Drug Patients.”
“Drugs don’t work if people can’t afford them, and there are too many people in this country who can’t,” Mr Mitchell said. “Americans are angry that they are being used. They know it.”
Still, the measure doesn’t provide all the tools Democrats want to rein in prescription drug costs. The negotiated prices won’t go into effect until 2026, and even then, they only apply to a small percentage of prescription drugs taken by Medicare beneficiaries. Pharmaceutical companies can still charge Medicare premium prices for new drugs.
This is a disappointment for the progressive wing of the party.The liberal magazine American Outlook dismissed the measure as “Very humble.”
Prescription drug prices in the United States are much higher than in other countries. 2021 RAND Corporation report For example, drug prices in this country were found to be more than seven times higher than in Turkey.
The pharmaceutical industry spends far more than any other industry in promoting its interests in Washington. It has reportedly spent $5.2 billion on lobbying since 1998. open secret, which tracks money in politics. Insurance was the second-largest spender, spending $3.3 billion. Drugmakers spread their money, giving Democrats and Republicans roughly equal contributions.
in a media briefing Last week, Stephen J. Uble, chief executive of PhRMA, the pharmaceutical industry’s main lobbying group, warned that the bill would reverse progress in treatment, especially cancer treatment — a high priority for Mr. Biden, whose Son died of cancer. brain tumor.
“Democrats are about to make a historic mistake that will destroy patients who desperately need new treatments,” Mr Uble said, adding that “the reduction in the number of new drugs is a high price, and it’s not enough to make People can afford medicine.” . “
But Dr. Aaron S. Kesselheim, a professor of medicine at Harvard Medical School and Brigham and Women’s Hospital, said he believed the measure would work by “encouraging investment in important new products, rather than encouraging pharmaceutical companies to keep pushing the same products and delaying as much as possible. The entry of generic drugs.”
In 1999, after his health care plan failed, Mr. Clinton revived the idea of Medicare prescription drug coverage. But this time, instead of suggesting Medicare negotiate with companies, he suggested leaving it to the private sector.
“At that time, what we were trying to do was acknowledge that Republicans were in unison against any type of government role,” said former Senate Democratic leader Tom Daschle.
But Republican President George W. Bush and the Republican Congress pushed the benefits of prescription drugs to the end.
Medicare Part D is known to have the backing of the pharma industry for two reasons: the companies are confident they will gain millions of new customers, and the bill contains a “non-intervention clause” that explicitly prohibits Medicare from negotiating directly with pharma business contact. The repeal of this provision is at the heart of the current legislation.
The benefit was designed by Billy Tauzin, a colorful Louisiana Republican congressman who led the House Energy and Commerce Committee at the time. In Washington, Mr. Taozin is best known as an example of pharmaceutical industry influence: he left Congress in January 2005 to run PhRMA, and was accused of being rewarded for participating in the company’s bids — Mr. Taozin insists The charge is a false “narrative” created by Democrats to paint Republicans as corrupt.
Joel White, a Republican health policy adviser who helped write the 2003 law that created Medicare Part D, said the program was created for private insurers, pharmacy benefit managers and has been launched for Medicare Designed by companies that negotiate rebates to use their leverage to drive down prices.
“The whole model is designed to foster private competition,” he said.
In the years since Medicare Part D was introduced, Opinion polls have consistently found The vast majority of Americans from both parties want to allow the federal government to negotiate drug prices.former president Donald J. Trump embraced the idea, albeit only during his campaign.
The new legislation targets drugs that are widely used at a specific stage of their existence — when they’ve been on the market for years but still lack generic competition. The industry has been criticized for deploying strategies to extend patent terms, such as slightly tweaking drug formulations or entering into “delayed payment” agreements with rival manufacturers to delay the arrival of cheap generics and “biosimilars” as biotech drugs Generic drugs are called.
Drugmaker AbbVie, for example, has amassed new patents to maintain a monopoly on its blockbuster anti-inflammatory drug Humira, from which it has withdrawn every year since its main patent expired in 2016. Profit of about 20 billion US dollars.
Ten drugs will be eligible for negotiation in 2026, with more to be added in subsequent years. The bill outlines criteria for choosing a drug, but the final decision will rest with the health secretary – a provision that Republican adviser Mr White warned would lead to “an incredible lobbying exercise” to add drugs to the list or keep them away from it.
Analysts said the bill would hurt the bottom line of drugmakers. Analysts at investment bank RBC Capital Markets estimate that most companies affected by the measure will see 10% to 15% less annual revenue by the end of the decade.
But while PhRMA warns that falling revenue will make drugmakers reluctant to invest in R&D, the Congressional Budget Office expects, Only 15 fewer drugs are on the market Over the next 30 years, 1,300 are expected by then.
The Senate is expected to consider the bill as early as Saturday before sending it to the House of Representatives. If it passes as expected, it will pierce the halo of power in Washington’s pharmaceutical industry, opening the door for more drugs to enter negotiations, said Leslie Dach, founder of the advocacy group Protect Our Care.
“Once you lose invincibility,” he said, “it’s easier for people to take the next step.”