Now they are on the verge of passing a sweeping budget bill that would do just that, and in the process give President Biden a political victory that he and his party can take to voters in November. Authorizing Medicare to negotiate prices for up to 10 drugs initially — and more later — along with several other provisions aimed at lowering health care costs, would be the most substantial change in health policy since the Affordable Care Act care became law in 2010, affecting much of the population. It could save some older Americans thousands of dollars in drug costs each year. The legislation would extend, for three years, the larger premium subsidies that low- and moderate-income people have received during the coronavirus pandemic to get health coverage under the Affordable Care Act, and would allow those with higher incomes who became eligible for such subsidies during the pandemic to keep them going. It would also make drugmakers absorb some of the cost of drugs whose prices rise faster than inflation. Significantly, it would also limit the amount Medicare recipients must pay for pharmacy drugs to $2,000 a year — a huge boon for the 1.4 million beneficiaries who spend more than that each year, often on drugs for serious illnesses 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 from Wheeling, Ill. She lives alone on a fixed income of about $24,000 a year. The out-of-pocket cost of her medication is about $6,000 a year. She digs through her savings, worried that she’ll run out of money before long. “Two years ago, I was $8,000 in the hole,” he said. “Last year, I was $15,000 in the hole. I expect to be longer this year because of inflation.” Between 2009 and 2018, the average price more than doubled for a brand-name prescription drug in Medicare Part D, the program that covers pharmacy-dispensed products, the Congressional Budget Office found. Between 2019 and 2020, price increases outpaced inflation for half of all drugs covered by Medicare, according to an analysis by the Kaiser Family Foundation. The budget office estimates the bill’s prescription drug provisions will save the federal government $288 billion over 10 years, in part by forcing the drug industry to accept lower prices from Medicare for some of its big sellers. Opponents argue the measure would discourage innovation and cite a new CBO analysis that predicts it would actually lead to higher prices when the drugs first hit the market.
The Biden Presidency
With the midterm elections looming, here’s President Biden.
Medicines for common conditions such as cancer and diabetes that affect the elderly are more likely to be selected for negotiations. Analysts at investment bank SVB Securities pointed to blood thinner Eliquis, cancer drug Imbruvica and diabetes and obesity drug Ozempic as three of the first potential targets for trading. Until recently, the idea that Medicare, which has about 64 million beneficiaries, could use its power to cut deals with drugmakers was unthinkable. Democrats have been pushing for it since President Bill Clinton proposed his controversial health care overhaul in 1993. The pharmaceutical industry’s fierce lobbying against it has become the stuff of Washington legend. “This is like lifting a curse,” Sen. Ron Wyden, D-Oregon and architect of the measure, said of the provision in the Medicare negotiations. “Big Pharma Protects No Deal Like It’s The Holy Grail”. David Mitchell, 72, is among those to be helped. A retired Washington, DC, public relations man learned in 2010 that he had multiple myeloma, an incurable blood cancer. He pays $16,000 out of pocket each year for just one of the four medications he takes. He also founded an advocacy group, Patients for Affordable Drugs. “Drugs don’t work if people can’t afford them, and too many people in this country can’t afford them,” Mr Mitchell said. “Americans are angry and they are being taken advantage of. They know it.” But the measure won’t offer every tool Democrats would like to contain prescription drug costs. The negotiated prices won’t go into effect until 2026, and even then they will only apply to a small fraction of the prescription drugs Medicare beneficiaries receive. Drug companies will still be able to charge Medicare high prices for new drugs. This is a disappointment for the progressive wing of the party. The American Prospect, a liberal magazine, dismissed the measure as “too modest.” Prescription drug prices in the United States are much higher than in other countries. A 2021 report by the RAND Corporation found that drug prices in that country were more than seven times higher than in Turkey, for example. The pharmaceutical industry spends far more than any other sector to promote its interests in Washington. Since 1998, it has spent $5.2 billion on lobbying, according to Open Secrets, which tracks money in politics. The insurance industry, the next largest spender, has spent $3.3 billion. Drug makers split their money, giving roughly equal amounts to Democrats and Republicans. At a media briefing last week. Stephen J. Ubl, the chief executive of PhRMA, the drug industry’s main lobbying group, warned that the bill would reverse progress on the treatment front, especially in cancer care — a high priority for Mr. Biden, whose the son died of a brain tumor. “Democrats are about to make a historic mistake that will devastate patients desperate for new treatments,” Mr. Ubl said, adding: “Fewer new drugs is a high price to pay for a bill that doesn’t do enough to make drugs more affordable . .” 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 spur innovation, “encouraging investment in important new products rather than encouraging drug companies to try to keep pushing the same product and delaying the entry of generics as long as possible.” In 1999, after the failure of his health care plan, Mr. Clinton brought back 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 point, what we were trying to do was accept the recognition that Republicans were stuck in opposition to any type of government role,” said Tom Dustle, the former Senate Democratic leader. But it took a Republican president, George W. Bush, and a Republican Congress to push the prescription drug benefit over the finish line. Medicare Part D, as the benefit is known, had the support of the drug industry for two reasons: The companies were convinced it would gain millions of new customers, and the bill contained a “non-interference clause,” which expressly prohibited Medicare from dealing directly with drug manufacturers. The repeal of this clause is at the heart of the current legislation. The architect of the benefit was a colorful Republican congressman from Louisiana, Billy Tauzin, who chaired the House Energy and Commerce Committee at the time. In Washington, Mr. Tauzin is best remembered as an example of drug industry influence: He left Congress in January 2005 to run PhRMA, prompting accusations that he was being paid to do the companies’ bidding — a charge Mr. Tauzin insists that it is a false “narrative” created by Democrats to paint Republicans as corrupt. Joel White, a Republican health policy consultant who helped write the 2003 law that created Medicare Part D, said the program was designed for private insurers, pharmacy benefit managers and companies that already negotiate discounts for Medicare plan sponsors to use the leveraging them to lower prices. “The whole model was designed to promote private competition,” he said. In the years since Medicare Part D was introduced, polling has consistently found that the vast majority of Americans from both parties want the federal government to be allowed to negotiate drug prices. Former President Donald J. Trump embraced the idea, if only during his campaign. The new legislation targets widely used drugs during a particular phase of their existence — when they have been on the market for several years but still lack generic competition. The industry has been criticized for developing strategies to extend patent life, such as slightly modifying drug types or reaching “pay-for-delay” deals with rival manufacturers to delay the arrival of cheap generics and “biosimilars,” as generic versions of biotechnology drugs are called Drugmaker AbbVie, for example, has piled on new patents to maintain a monopoly on the blockbuster anti-inflammatory drug Humira — and has made about $20 billion a year from the drug since its main patent expired in 2016. Ten drugs will qualify for trading in 2026, with more to be added in the coming years. The bill outlines the criteria by which the drugs would be selected, but the final decision would rest with the health secretary – a provision which Mr White, the Republican adviser, warned would lead to “an incredible lobbying campaign” to get the medicines on the list or keep them away from it. Analysts say the bill would hurt the drugs’ results. Analysts at investment bank RBC Capital Markets estimated that most companies affected by the measure would generate 10 to 15 percent less revenue annually by the end of…
