JustCare

Tag: Nancy Pelosi

  • Speaker Pelosi’s drug bill passes in the US House of Representatives

    Speaker Pelosi’s drug bill passes in the US House of Representatives

    Last week, the US House of Representatives passed the Elijah E. Cummings Lower Drug Costs Now Act, sponsored by Speaker Nancy Pelosi. The bill would finally allow Medicare to negotiate drug prices for as many as 250 drugs. It is projected to cut the price of those drugs significantly and save $456 billion over the next ten years.

    The bill, H.R.3, is designed to bring down prices for the most commonly used drugs, including insulin. At least 50 drugs would have much lower prices each year, up to 250 drugs in total. Prices for these drugs would be based on their average price in a select group of other wealthy countries and capped at 20 percent above that average price. Government negotiation could reduce prices to as little as half of what they cost today.

    Pharmaceutical companies would have a strong incentive to negotiate with the government. The bill penalizes pharmaceutical companies that refuse to negotiate. It taxes them up to 95 percent of the revenues they earn for those drugs.

    Although Medicare will negotiate the prices, pharmaceutical companies also must offer the same negotiated prices it charges Medicare to private insurers. In effect, the bill extends Medicare’s leverage to bring down costs beyond people over 65 and people with disabilities.

    Shockingly, it does not appear that the bill would help people without health care coverage. It seems as if the pharmaceutical companies could continue to charge people without health insurance exorbitant prices.

    Under H.R. 3, pharmaceutical companies could raise drug prices, but they would have to pay rebates to Medicare if their drug prices rise faster than inflation. Pharmaceutical companies insist that H.R.3 will keep them from bringing some new drugs to market. However, the bill allocates an additional $10 billion a year in federal funding to research and development of new drugs, spurring innovation.

    The House Democrats included a provision in the bill that would expand Medicare benefits to cover vision, hearing and dental services. The bill also caps out-of-pocket costs for people with Medicare with Part D prescription drug coverage at $2,000 .

    The new Medicare benefits and the drug research funding would be paid for from the $456 billion in drug savings. Even with this spending, the Congressional Budget Office projects $500 million a year in savings.

    House Democrats unanimously supported the bill. They were joined by Republicans Jaime Hererra Beutler of Washington and Brian Fitzpatrick of Pennsylvania.

    Unfortunately, H.R.3 will not become law any time soon. The Republican majority in the US Senate is not prepared to pass this prescription drug bill or to lower drug costs in a meaningful way.

    Here’s more from Just Care:

  • Lowering drug prices will not affect innovation

    Lowering drug prices will not affect innovation

    Peter Bach, a physician at Memorial Sloan-Kettering Cancer Center, explains in Bloomberg News that lowering drug prices will not affect drug innovation in a meaningful way. We will still find cures and more people will be able to afford the medications they need.

    The Congressional Budget Office (CBO) analyzed Speaker Nancy Pelosi’s bill to lower drug prices on up to 35 brand-name drugs a year and found that new drugs will continue to be discovered at almost the same rate as today. The CBO projects only a three-five percent drop in new drug discoveries.

    Bach believes if Pelosi’s bill were enacted, pharmaceutical companies will have less incentive to develop drugs we don’t need. For example, a drug that treats Duchenne muscular dystrophy, Exondys 51, which costs almost $1 million a year here has not been found to be effective in Europe so is not available there.

    Under Pelosi’s plan, Medicare and others would pay a maximum of 1.2 times what Germans, Australians, Canadians, Japanese and French pay for a number of high-cost brand-name drugs that lack serious generic competition. Any drug not sold abroad would be priced at Medicaid rates. (Today, Americans pay four times more than the Swiss for our drugs. However, some specialty drugs, such as Kymriah, a CAR-T cell therapy, which treats leukemia, costs about the same in the UK as in the US. So, there’s still plenty of financial incentive for pharmaceutical companies to discover new drugs of this type.)

    Medicare currently is forbidden by law to negotiate drug prices with pharmaceutical companies. It cannot negotiate prices of retail drugs we buy at the pharmacy. It must pay the price pharmaceutical companies charge for intravenous drugs administered in doctors’ offices. And, Medicare must reimburse hospitals for the cost of drugs administered in hospital no matter how high. Drug prices paid by commercial insurers are about the same as Medicare’s.

    The CBO estimates that, if Pelosi’s bill passed, the federal government would save $345 billion on Medicare between 2023 and 2029. Medicare’s Office of the Actuary projects that individuals, states and employers would save an additional $243 billion. (Note: Savings on drug costs would be far greater if we paid the average of what other wealthy countries paid for all our drugs.)

    If Pelosi’s bill passed, the savings could be used for targeted public drug innovation through the NIH. Or, savings could be used to improve Medicare benefits.

    Of course, savings are only a piece of the story. Today, Americans with health insurance are seven times less likely to take their medicines than people in other wealthy countries. They are too expensive.

    To be clear, until Democrats have control of the Senate, there’s little if any chance Pelosi’s bill will be enacted into law. But, at least now there’s compelling evidence that we can lower drug prices with little effect on innovation.

    If you support making drug prices in the U.S. affordable, please sign this petition.

    Here’s more from Just Care:

  • Pelosi drug proposal would bring down drug prices

    Pelosi drug proposal would bring down drug prices

    Politico reports on House Speaker Nancy Pelosi’s drug pricing proposal. If Politico’s information about key elements is accurate, Americans could see prices cut in half for scores of the most widely used drugs. And, the Medicare Part D drug benefit finally will have an out-of-pocket limit.

    The Pelosi proposal, as Politico describes it, could link the cost of 250 commonly used brand-name drugs to their average price in six wealthy nations. Since Americans tend to pay about twice as much for drugs as people in Canada and Great Britain, we could see these drug prices drop by 50 percent.

    The government would negotiate drug prices for drugs responsible for the highest costs to Medicare and the US health care system. These drugs represent about half of Part D spending and include insulin. Why Pelosi’s proposal only covers 250 drugs and not every drug is an open question.

    If the federal government is unable to negotiate fair drug prices with drugmakers, it would use international reference pricing to set these drugs’ prices. They would be set at no more than 1.2 times the average price in six countries: Australia, Canada, France, Germany, Japan and the United Kingdom. International reference pricing is a policy, originally introduced in the Senate by Bernie Sanders and in the House by Ro Khanna, which President Trump has said he supports.

    Under the draft proposal, if drugmakers refuse to negotiate with the federal government or sell at the established price to both the government and private health insurers, they would face severe financial penalties. They would pay an excise tax of 75 percent of the gross sales of the drug the prior year. Pharmaceutical companies would face penalties if they offered the drug at the negotiated price to Medicare but did not offer the drug at the negotiated price to private insurers.

    While the financial penalty should be severe enough to induce pharmaceutical companies to sell their drugs at the established price, the Khanna and Sanders bills go a step further to ensure drug availability. Their bills would take away a pharmaceutical company’s exclusive license and give licenses to generic drugmakers if the pharmaceutical company set its drug’s price higher than the average in five wealthy nations.

    Pharmaceutical companies would not be permitted to increase the price of a drug more than the rate of inflation for as long as there was little or no competition for that drug. Pharmaceutical companies would incur financial penalties if they raised the price of any drug covered under Medicare Parts B or D above the rate of inflation after 2016 and did not either lower the drug’s price or refund the excess charge to Medicare.

    Government savings from paying lower prices for drugs under Medicare Part D would go to the NIH to fund more drug research.

    Here’s more from Just Care: