Health Policy Analyst Explains Medicare Negotiations

The Biden administration announced on August 29, 2023. List of first 10 drugs It will be negotiating with pharmaceutical companies over Medicare prices.

Medicines are purchased in the following ways: Medicare Part D, a prescription drug coverage program for Americans age 65 and older. Ten drugs accounted for more than US$50.5 billion in total costs from 1 June 2022 to 31 May 2023.

The clauses permitting these negotiations are: Inflation control law The bill, which will pass Congress in 2022, will allow Medicare to negotiate drug prices for the first time. Until negotiations are successful, these changes represent the researchers’ estimated net savings. $1.8 billion in 2026.of The Congressional Budget Office projected an even bigger cut of $3.7 billion..

The Top 10 list includes pharmaceuticals from Johnson & Johnson, among others. charlertthose that treat thrombosis, and Amgen’s Enbrelto treat rheumatoid arthritis and psoriasis.

Negotiations will begin in October and continue until August 2024, with the price cuts expected to take effect in 2026.

Democratic Party He hailed the new drug pricing law as a game-changer.they are likely to make this issue the center of their activities 2024 election campaign.Democrats are gaining more momentum, as polls show overwhelming support for the policy among the American public.

as a scholar study the politics of health policyI’m skeptical that Medicare’s drug price negotiations, at least in the near future, will ultimately bring about as much change as the Democrats have promised. Prescription drug prices in the US are too high, but the true potential of the policy is unclear. get involved in lawsuits and industry opposition. But if the bill withstands the ongoing attacks and becomes a well-established law, Americans 65 and older could get substantial financial relief in the future.

Reduce drug costs for Medicare participants

of Inflation control law This will allow Medicare and Medicaid Service centers to negotiate prices with the companies that make some of the most expensive medicines in the Medicare program, including life-saving cancer and diabetes medicines. Imbruvica and Januvia.

If the negotiations proceed as planned, the drug price negotiation clause will The U.S. government could save about $98.5 billion By 2031, helping Americans with Medicare pay for most prescription drugs, 66 million people. The Biden administration hopes these cost savings will be passed on to Americans 65 and older. Reduced Medicare Part D Premiums Out-of-pocket costs are also lower.

The Inflation Control Act stipulates that: Additional Benefits for Older AmericansThis includes limiting prescription drug copayments to $2,000 or less per year, limiting Medicare Part D premium increases, eliminating vaccine copayments, and lowering low-income people age 65 and older. including providing premium subsidies to older.

The Inflation Control Act also includes another provision that, under certain conditions, requires pharmaceutical companies to: Offer a Medicare program If drug price increases exceed inflation, there are rebates, Start from January 2023. It is expected that the measures Realized $71 billion in savings Over 10 years.

Penalties for companies that do not respond to negotiations

10 medicines offered by Medicare and Medicaid Service Centers selected Out-of-pocket spending accounted for $3.4 billion in 2022 For Americans 65+ $50.5 billion or about 20% Total Prescription Drug Costs for Part D From June 1, 2022 to May 31, 2023.

Pharmaceutical companies have until October 2023 to sign contracts to participate in the next round of negotiations. Based on public feedback, consultation, clinical value of the drug, and other criteria, the Centers for Medicare and Medicaid Services plans to make an initial pricing offer in October 2023. By early 2024, Further price negotiations until August 2024. Additional drugs will be subject to negotiation in the future.

If drug companies fail to negotiate, they face stiff penalties that can reach a maximum amount in the form of taxes. 95% of US pharmaceutical sales. Alternatively, companies may withdraw their drugs from the Medicare and Medicaid markets, meaning that Medicare seniors will lose access to drugs.

Why are US drug prices so high?

Americans pay quite a lot for prescription drugs Compared to people living in countries of similar economic size, such as Germany, the United Kingdom and Australia. Americans spent more than $1,100 per year In 2019, Germans paid $825 per person, British $285 and Australians $434.

of The reasons for this disparity are multi-layered including the whole The Complexity of the U.S. Health Care System and the Lack of transparency in the pharmaceutical supply chain.Of course, many other countries also directly Setting prices for medicines or taking advantage of monopolies in medical services to reduce costs.

For example, the price of Durera, an asthma drug, is 50x more in the US higher than the international average.Diabetes drug Januvia and glaucoma drug Comvigan, among the first 10 drugs to be negotiated, are priced at around 10 times more.

These costs are imposed on A heavy burden for Americans – 1 in 5 of them Skip at least some of the prescribed medications due to their expense. For those aged 65 and over, particularly affected by these issues.

strong resistance

It is too early to tell how big the impact of drug pricing will be and whether the policy will be maintained.

Pharmaceutical companies are against Decades of Government Drug Pricing.they are fighting action in court We are also running public relations campaigns to warn against less investment in life-saving treatments as economic incentives are dwindling.

Even if drug price negotiations overcome legal challenges for the industry, future Republican administrations may not adopt or enforce the policy. Any chance of a Republican victory in the 2024 presidential and congressional elections could collapse or severely curtail drug bargaining policies.Republicans have certainly tried their best Passionate about strategic planning This is to take advantage of negotiations with the Democratic Party in the next election.

weigh the prospects

In my view, the government’s efforts to lower the price of prescription drugs available to Part D registrants is a step in the right direction. At this point, the effect is probably small This is because patients are already receiving discounts on drugs on the list, significantly reducing their net savings. But as more drugs come under negotiation, the potential for substantial savings for Americans 65 and older will undoubtedly increase.

At the same time, pharmaceutical companies have indicated they are prepared to take legal action against Medicare’s drug pricing reforms. all the way to the Supreme Court. Then, they are likely to win This is because the arguments made in their case are likely to appeal to the conservative majority of the Supreme Court. was doing well to many of the claims made by pharmaceutical companies in lawsuits.

In addition, drug companies can simply pull their drugs out of Medicare and Medicaid to force government hands. Medicare and Medicaid Service Centers appear to have deliberately selected drugs that: A high percentage of pharmaceutical sales for manufacturers to counteract this possibility. industry has A history of exploiting loopholes and own a huge lobbying machine.

And it’s too early to know if this will be a win for American patients as a whole. Americans not covered by Medicare Prices may actually go up. Because if pharmaceutical companies make less money on drugs for people enrolled in Part D, they can make up for lost profits by charging more for drugs that others depend on. Because it could make up for it.

And finally, there are the following possibilities: Decrease in new prescription drugs – as an indirect result of this policy, which should improve access to health care – because May reduce incentives for pharmaceutical companies. Although the number of cases is likely to be small, it could have a large impact on patients who find treatment and relief from their disease.