With President Biden’s administrational overhaul plan stalling in Congress, there are mounting tensions about what changes could happen for US people at the pharma counter. The ever-changing proposals include tinkering with US tax credits and extensive federal payment system changes.
Pressure is mounting to curb costs in the pharmaceutical industry that have been skyrocketing over the last decade. As per a recent poll from Gallup, around 18 million US people had not been able to settle at least a single form of doctor-prescribed medicine over the last three months.
The Biden government has demanded a policy that would permit Medicare to do the following.
- Negotiate drug rates
- Cap direct drug cost payments that would not be reimbursed for beneficiaries
- Restrict price hikes from drug manufacturers
- End the practice of drugmakers paying competitors to make them introduce cheaper generic goods slow
Democrats are looking to push a big spending bill through Congress that would finance domestic policy-related initiatives, which include new and improved healthcare programs. Still, despite campaign promises in 2020 to reduce prices, Democratic Party members have not come together to form a plan to do so. Progressive Democrats who paid attention to Medicare drug expenditure have backed a plan that the House passed in 2020 that lets Medicare negotiate rates. As per the Congressional Budget Office’s estimation, the plan would save this government $500 billion or so over ten years.
Merk & Co Executive Chairman Ken Frazier stated that letting the administration set prices is not an act of negotiation and would not augur well for the US economy or people.
Considering their slender majority in US Congress, Democratic Party members cannot lose over three House representatives or one senator on just a vote. Representatives Kurt Schrader, Kathleen Rice and Scott Peters did not vote for the drug price move in committee. By doing so, those three House representatives threatened to jettison that measure, even as they have provided options that are more restrained. The Senate is yet to make a proposal.
About the effort, economist Paul Ginsburg stated that much cannot be done to reduce the prescription drug costs of patients without future reimbursement without addressing rates too. Reconciliation package proposals from the House Democratic Party members can be put into the following buckets.
Summarizing the intent of the package, Rachel Sachs from Washington University in St. Louis said that the US should not let drugmakers raise prices to any extent they want or faster than inflation.
In the tax rebate bucket, under the law, manufacturers must pay the administration based on a rise in the price of a drug beyond usual inflation costs. This means if a drugmaker raises the price by 10% when 3% is the inflation rate, it would have to rebate 7% to the administration.
The proposal targets drugs such as Humira, whose rate has reportedly gone up by 470% after entering the market. USC Schaeffer Center representative Loren Adler also weighed in on the matter. He stated that if approved, then the rebate measure could refund dollars to those enrolled in Medicare through reduced Medicare prescription drug premiums and cost-sharing.
As for Adler, it appears that even moderate Democratic Party members support the idea of price reductions for the drugs having market exclusivity even today. Adler puts it largely down to the fact that those Democrats have been doing things that somewhat keep new biosimilar products or rivals out of the market.
A different bucket would put a limit on the amount that Medicare enrollees pay for drug coverage. As per experts, there should be a broad appeal for it. Medicare beneficiaries are now required to pay for the initial drug costs worth $6,550 each year from their pockets and 5% of further drug spending. A limit on the amount of money that the beneficiaries could pay does not exist.
In 2019, around 1.5 million people who benefit from Medicare drug coverage, spent more than the Part D coverage limit. Patients who consume costly rheumatoid arthritis or cancer drugs come under that category.
As per Commonwealth Fund representative Lovisa Gustafsson, the number of patients who reached the said coverage limit has been going up yearly, basically, because more costly drugs are on the market.
The last bucket demands regulators at a federal level to negotiate how much the Medicare plan pays for US drugs. It establishes a maximum rate and a level that the US federal administration can pay for certain costly drugs. Initially, Democratic Party members had introduced a penalty applicable to companies unwilling to participate.
Ginsburg stated that it is amazing to present pricing ceilings or negotiations to be debated and agreed on. As for Ginsburg, political boundaries about this policy matter have moved much over the recent years.
