Not only are drug prices rising at the pharmacy for people with Medicare, but drug prices are rising for hospital inpatients as well. MedPac, the agency that oversees Medicare, says rising drug prices are responsible for a huge increase in Medicare Part B drug spending. It wants Congress to rein in these prices.
During its October 7 meeting, MedPac members discussed Medicare Part B drug spending. For years, MedPac has said that Congress needs to rein in drug prices. But, the pharmaceutical industry has consistently managed to keep Congress from responding appropriately and regulating prices.
MedPac members focused on prices for infusible and injectable drugs. Medicare pays for these drugs at the average sales price plus six percent. Members believe that Aduhelm, the new FDA-approved drug for people with Alzheimer’s disease, could literally wipe Medicare out. Yet, there is little clinical evidence that Aduhelm actually helps people with Alzheimer’s or helps them enough to warrant its launch price of $56,000.
Prices are rising on injectable and infusible drugs that have therapeutic alternatives. So, some MedPac members are asking why Medicare should pay the high prices that these drugs command.
And, some MedPac members believe that Congress must change its payment formula for Part B drugs. Medicare’s payment rate–average sales price plus six percent–creates an incentive for pharmaceutical companies to keep raising their rates.
Part B drugs have seen nearly 10 percent annual Medicare spending growth over the last 12 years, which MedPac members attribute to higher drug prices. Drugs in the US have higher launch prices than in other countries and higher price increases each year. And, prices keep rising on drugs which have little or no evidence of being effective.
Democrats in Congress are working on legislation in the reconciliation bill that should rein in these prices. Time will tell if they succeed.
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