Prohibiting Medicare Drug Price Negotiation Under Pressure

Donna Weiner looks at Medicare Prescription Drug Program from two different points of view.

As a member, she wants to pay less for drugs, which cost her about $ 6,000 a year. As a retired accountant who has worked with ledgers for companies for 50 years, she sees a way to achieve this.

“In business, you know that it makes no sense for a plan administrator or company not to participate in what they have to pay,” said Weiner, who lives near Orlando, Florida. For Medicare, she said, “I will have to put thousands of dollars in my pocket every year to negotiate lower prices.”

Medicare drug price negotiation kernel President Joe Biden’s ambitious health agenda… Not only will consumers see lower costs, but the savings will be invested in other priorities, such as dental insurance for retirees and lower premiums for people with plans under the Obama-era health care law.

To do this, Congress will have to change the unusual arrangement enshrined in the law.

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When lawmakers created Medicare for Outpatient Prescription Drugs Part D in 2003, they stopped Medicare from negotiating prices. The Republicans, who controlled Congress at the time, wanted the insurance companies that run the anti-drug plans to do the bidding. Medicare has been on the sidelines despite years of experience setting prices for hospitals, doctors, and nursing homes.

“I don’t know of any other situation where the government has one hand tied behind its back when dealing with people like large pharmaceuticals,” said Senator Ron Wyden, the dean’s office leading the Democratic Party’s plan for the United States. Senate.

This prohibition, known as the “non-interference clause,” could not be changed. This is how the pharmaceutical industry wants to keep.

Former Medicare administrator Andy Slavitt recalls proposing a “modest experiment” with pricing. “You would have thought that we had pressed the nuclear button and the country would explode,” he said.

Medications, which cost tens of thousands of dollars a month, were rare when prescription benefit was introduced nearly 20 years ago. They are now more widespread, and Democrats want to allow Medicare to negotiate high-priced branded drugs with little or no competition, and insulin.

Their legislation will also limit the rise in the price of known drugs and limit annual out-of-pocket payments for Medicare recipients like Weiner. The other part is to rethink the inner workings of the nearly $ 100 billion-a-year drug program to try to cut costs for taxpayers.

Politicians, including former President Donald Trump and House Speaker Nancy Pelosi, California, supported the Medicare negotiations. But the closest thing to this came Biden, in which Pelosi does most of the work.

Or it may not happen.

Like the rest of Biden’s large-scale program to allow Medicare to negotiate depends on a few Democratic supporters… During the discussion by the committee in the chamber, three democrats were against… In the Senate, this pair is considered unconvincing.

Amid a furious AARP lobbying and advertising campaign, consumer groups and insurance companies are pushing for negotiations with Medicare.

Business groups and the pharmaceutical industry are at odds. Pharmaceutical companies spent $ 171 million this year on lobbying, far more than any other industry. according to the OpenSecrets watchdog group.

Industry officials say easing the bargaining ban will stifle investment in innovative ideas that could lead to life-saving drugs.

“The United States is, quite simply, the biopharmaceutical engine for the entire world,” said Lisa Joldersma, co-leader of the Pharmaceutical Research and Manufacturers of America (PhRMA) lobbying group. “The investments our companies are making are allowing things like multiple vaccines and treatments to fight the global pandemic to enter the market at an unprecedented time.”

PhRMA opposes restrictions on starting prices for new drugs, as well as restrictions on price increases for existing drugs. It says the government has other ways to shield Medicare recipients from high personal costs, and accuses insurers of not passing manufacturer rebates directly to patients.

Yoldersma points to a study of nonpartisan Congressional budget management to support the industry’s argument that fewer drugs will enter the market. The CBO found that a legislative-like approach would result in a small reduction in the number of new drugs in the first 10 years, and by the third decade, the number of new drugs would grow by 8% over time.

PhRMA says the chilling effect will be stronger.

“If you are a patient … this is certainly not a minor problem,” Yoldersma said.

Others say drug development is unlikely to stop. Dr. Stephen Pearson, head of the nonprofit Institute for Clinical and Economic Review (ICER) in Boston, would say that high-value drugs will move forward, but those with less benefit will be more difficult, according to the biotetic. The research organization recommends prices based on performance.

“The main argument is that if the government touches the process, it will somehow stifle innovation,” Pearson said. “We can innovate even better if we pay smartly.”

Industry spokesperson Yoldersma replied, “I don’t know if Steve Pearson of ICER has ever discovered or marketed any treatment or drug.”

Juliet Kubanski, a Medicare expert at the nonpartisan Kaiser Family Foundation, says that “the level of exaggeration we hear in the current drug debate shows that the industry is very worried.”

One of the industry’s biggest objections is that the House bill would use lower prices in other developed countries as a criterion for Medicare. The Trump administration has tried a similar idea with another Medicare suite of drugs. Drug makers say US patients may have to wait longer than they used to for new drugs if this wears off.

Recent Research by RAND Corporation found that linking the cost of America’s best drugs and insulins to overseas prices could cut the cost of those drugs by about half.

Other countries are trying to balance incentives for research and development with prices that reflect value to patients and society, said study author Andrew Mulcahy.

“If we just wrote huge checks to pharmaceutical companies, would they do more research?” Mulcahy asked. “Perhaps some. But is this the socially optimal solution?

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