JustCare

Tag: Prescription drugs

  • Trump’s executive order on prescription drugs does not reduce drug prices for Americans

    Trump’s executive order on prescription drugs does not reduce drug prices for Americans

    A new Arnold Ventures poll finds that nearly nine out of 10 voters believe the government should have the power to negotiate prescription drug prices. And, more than 75 percent say that it is very important for the government to reduce drug prices, including seven in 10 Trump supporters. Unfortunately, President Trump’s recent Executive Order on prescription drug prices and tariffs are likely to raise drug prices for Americans.

    More specifically, the vast majority of Americans support capping drug price increases to the rate of inflation and Medicare negotiating drug prices for all drugs. Indeed, 86 percent say that they do not want people with Medicare to pay more for their drugs than people in other wealthy nations. But, Trump’s executive order undermines Medicare’s limited efforts to negotiate drug prices, much less expand Medicare’s authority to negotiate drug prices.

    Bottom line: Your prescription drug costs are probably not coming down any time soon. President Trump’s tariffs on China could lead to higher drug costs for all Americans, as pharmaceutical manufacturers import ingredients from China. Meanwhile, Trump’s new Executive Order on prescription drug prices appears to favor the pharmaceutical industry’s interests, allowing drug companies to continue to set prices sky high and calling for changes to the Inflation Reduction Act that would drive up drug prices for people with Medicare.

    Here are some of the key provisions of the Executive Order.

    On a positive note, with caveats:

    • It aims to reduce the cost of insulin and injectable epinephrine at community health centers for uninsured and some low-income individuals. It’s not clear by how much.
    • It asks the FDA to make it easier for states to import drugs. But, it’s not at all clear that this provision will help Americans at the pharmacy. Today, the FDA has only granted permission to Florida to import drugs from Canada, and Florida appears not to have begun importing drugs. Moreover, Florida’s program is not designed to help its residents. It would only help lower the state’s costs a small amount for Medicaid recipients and for the state’s health and corrections departments.
    • It calls for more generics and biosimilars–lower-cost alternatives to brand name drugs. But, the Trump administration has cut FDA staffing drastically. It eliminated the office that was tasked with speeding up generic drug approvals,  slowing down drug approvals. Moreover, the administration has also cut NIH funding, which supports virtually all new drug development. So, while the president’s goal is laudable, it does not seem doable. 

    On a negative note:

    • It is projected to drive up Medicare drug costs by $6 billion and force people with Medicare to pay $1.5 billion more for their drugs. How? The Executive Order buys into a pharmaceutical industry claim that the Inflation Reduction Act discriminates against pills. Discriminates? Well, let’s just say that the law gives license to pharmaceutical companies to charge high prices for injectable drugs for a longer period of time than for pills. The IRA permits drug price negotiation over pills on the market for nine years and injectable drugs on the market after 13 years. The Executive Order asks Congress to allow pharmaceutical companies the same 13 years of protection for pills as for injectables. If the Republican majority complies, more than half the drugs for which the Centers for Medicare and Medicaid Services is negotiating lower prices would no longer have lower negotiated prices.
    • It calls for better transparency around the fees drug middlemen receive from pharmaceutical companies, which does not bring down drug prices for Americans.

    The Trump administration also ended a Biden initiative that would have permitted people with Medicare to buy generic drugs for $2. And, it is denying Medicare coverage of anti-obesity drugs, as the Biden administration had proposed.

    Here’s more from Just Care:

  • When will Medicare stop letting Part D insurers drive up drug costs?

    When will Medicare stop letting Part D insurers drive up drug costs?

    The Centers for Medicare and Medicare Services, which oversees Medicare, now has authority to negotiate prescription drug prices for some Part D drugs each year. But, Christen Linke Young writes for Brookings on other Part D fixes needed to prevent insurers from driving up drug costs for their enrollees. The Trump administration just announced that it will not to make these fixes, at least for now.

    Young explains that Medicare Part D is riddled with “market failures and inefficiencies.” As a result, Medicare Part D plans promote high-priced drugs with higher copays rather than lower-cost drugs.

    Here’s the problem: Part D insurers earn more revenue when they negotiate big rebates from pharmaceutical companies offering higher-priced drugs. So, the insurers have a strong financial incentive to put drugs with the highest rebates on their formularies and keep lower-cost alternatives off their formularies. The insurers work with Pharmacy Benefit Managers, which, in the case of the largest insurers, are subsidiary companies.

    The bigger the gap between the list price of a drug and the net price (the price after rebate), the more money the PBMs can collect in rebates. As a result, many Part D on-formulary drugs have a low net price and a high list price.

    For reasons I cannot explain, Medicare pays PBMs based on a drug’s list price, not its net price. Medicare does so even if there is another lower-priced drug to treat the condition. The government also allows Part D insurers to keep lower-priced drugs off their formularies.

    Through this flawed insurance design, Part D plans can offer lower premiums and then charge high out-of-pocket costs to those enrollees needing drugs with high list prices. The $2,000 out-of-pocket cap on Part D drugs helps patients some, but not as much as it could. Part D insurers both can charge patients high copays if a drug has a high list price and can keep lower-cost alternative drugs off their formularies.

    When drug manufacturers give PBMs rebates, they often require that the PBM either keep a lower-cost alternative of that drug or another drug off the insurer’s formulary, a “rebate wall.”

    These legally permissible insurer shenanigans cause people with Part D coverage to pay a lot more for their drugs than they need to. Sometimes, it’s less expensive to go to Costco or another low-cost pharmacy for your drugs. For example, the HHS Office of the Inspector General found that Part D plans tended to keep enrollees from buying biosimilar drugs, steering them to the higher-priced biologicals at a huge cost to the Medicare program.

    Inexplicably, Congress has failed to fix these problems with Part D. CMS already has significant authority over formularies but has not exercised it to the extent needed. A Biden administration proposed rule that the Trump administration did not finalize would have required Part D plans to give enrollees “broad access to generics, biosimilars, and other lower cost drugs.” This rule could have helped prevent “rebate walls.”

    Here’s more from Just Care:

  • Tariffs will likely drive drug prices higher and create drug shortages

    Tariffs will likely drive drug prices higher and create drug shortages

    Most prescription drugs Americans take are manufactured outside the United States. President Trump has not imposed tariffs on these imported drugs yet, but, if he does, prescription drug prices are likely to rise even more. Rebecca Robbins reports for the New York Times on what could happen to drug prices.

    Since taking office, President Trump has said that he will put tariffs on prescription drugs. And, he talks about putting 25 percent tariffs on these drugs. He believes that by doing so he can move prescription drug manufacturing back to the United States. But, many experts disagree.

    Only a small number of prescription drugs Americans take are manufactured here. Some of our critical drugs–such as Keytruda and Zepbound–are manufactured in Ireland, a tax haven for pharmaceutical companies. We rely heavily on China, India and Europe for our drugs or many of their ingredients, including basic drugs such as ibuprofen.

    Already, Trump has imposed tariffs on many of the ingredients used in the making of prescription drugs. For example, there is now a 20 percent tariff on these ingredients made in China. Presumably, those tariffs are causing drug prices to rise.

    It is very possible that tariffs on drugs will only drive up prices further and lead to drug shortages, particularly shortages of generic drug, the large majority of the prescription drugs Americans take. For example, amoxicillin is produced almost entirely in China, India and Europe, though a Tennessee factory once produced virtually all of this drug for Americans.

    The pharmaceutical industry is asking Trump to phase in any prescription drug tariffs he plans to impose and to exempt drugs that could become hard to get if a tariff is imposed, as well as essential drugs, like antibiotics.

    Generic drug manufacturers in the US already make only slim profits on their drugs. As it is, shortages of some of these drugs are not unusual. Tariffs could lead companies to stop selling them altogether. Similarly, tariffs could lead to a shortage of important medical devices like syringes and blood pressure cuffs.

    Tariffs also could mean higher health insurance premiums and higher out-of-pocket health care costs. Most certainly, health care cost increases will be a barrier to care for patients. They will not fill prescriptions or not comply with medicine regimens in order to save money or because they cannot afford their prescription drugs.

  • 2025: Government finalizes new Medicare Advantage policies

    2025: Government finalizes new Medicare Advantage policies

    Last Friday, the Centers for Medicare & Medicaid Services (CMS) issued a final rule regarding Medicare Advantage (MA) and Medicare Prescription Drug (Part D) policy. The rule will take effect in 2026. Of note, the final rule does not call for Medicare coverage of Ozempic or other anti-obesity drugs for people seeking to lose weight, as proposed, nor does it put guardrails on insurers’ use of artificial intelligence to deny care.

    CMS chose not to finalize provisions in the Biden Administration’s proposed rule related to promoting equity, ensuring equitable access to MA services, imposing guardrails for artificial intelligence (AI) or covering anti-obesity medicines.

    The rule does require MA plans to cover inpatient hospital admissions that they approved based through a prior authorization process. MA plans have too often decided post prior authorization approval to deny coverage for inpatient admissions that they deemed, after the fact, should have been treated as outpatient admissions. MA plans can only reopen a prior approval of an inpatient admission because of fraud or administrative error.

    CMS also finalized a rule ensuring that enrollees and providers can appeal an MA denial whether it comes before, during or after a procedure.

    CMS finalized a proposal that prohibits Medicare Part D plans from charging a deductible or copay for adult vaccines that the Advisory Committee on Immunization Practices recommends. The deductible also does not apply to insulin products; and, cost-sharing for these products cannot go above $35.

    In addition, Part D plans must allow enrollees to make monthly payments for their covered drugs over the course of the year, rather than in one lump sum at the pharmacy. Effective this year, these payments cannot exceed $2,000 over the course of the year.

    Here’s more from Just Care:

  • President Trump threatens Pharma with tariffs

    President Trump threatens Pharma with tariffs

    President Trump has spent his first few weeks in office undoing much of what President Biden had put in place, but he is not (yet) prepared to undo the Medicare drug price negotiation provisions in the Inflation Reduction Act. In fact, in a meeting with pharmaceutical company executives, he threatened to impose tariffs on pharmaceutical companies if they did not relocate their manufacturing to the US, reports Tristan Manalac for Biospace.

    “Pharmaceuticals, it’ll be 25 percent and higher, and it’ll go very substantially higher over [the] course of a year,” said President Trump. These tariffs would drive up drug prices substantially for working Americans. The Inflation Reduction Act (IRA), passed under the Biden Administration, penalizes drug companies for raising Medicare and Medicaid drug prices more than the rate of inflation.

    President Trump has still not said what he will do about Medicare drug price negotiation. Among other things, the IRA calls for the Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, to negotiate the price of 15 prescription drugs that drive high Medicare spending in 2025.  In 2024, CMS negotiated the price of 10 high-cost prescription drugs. Those new drug prices are set to take effect in 2026.

    Pfizer, Lilly, Merk CEOs all attended the meeting with President Trump. Their trade association, PhRMA, has been trying to undo the provisions in the Inflation Reduction Act that reduce drug company profits. The drug companies have sued the government, so far unsuccessfully, claiming that lower drug prices are effectively a taking of their property. Of course, the only reason they can charge the prices they do in the US is because our government has given them monopoly pricing power on patented drugs, unlike the governments in every other wealthy nation.

    Here’s more from Just Care:

  • Will Medicare continue negotiating drug prices?

    Will Medicare continue negotiating drug prices?

    Among other things, the Biden Administration’s Inflation Reduction Act authorized the Centers for Medicare and Medicaid Services (CMS) to negotiate the prices of a number of costly prescription drugs. Back in August, CMS announced prices for the first ten drugs subject to price negotiation and, more recently, it announced the next 15. Jonathan Cohn reports for Huffington Post on the forces at work to undermine Medicare drug price negotiation.

    Medicare drug price negotiation not only lowers federal spending on prescription drugs to the tune of billions of dollars, it should also save people with Medicare money, both in premiums for Medicare Part D and in copays. But, few people with Medicare appear to be aware of these cost-saving reforms, according to a recent Kaiser Family Foundation poll. They are not yet benefiting from lower drug prices.

    People won’t see savings from the 10 drugs in the first round of Medicare drug price negotiations until 2026. And, they won’t see savings for the next 15 drugs with negotiated drug prices until 2027. Those drugs are: Ozempic; Rybelsus; Wegovy; Trelegy Ellipta; Xtandi; Pomalyst; Ibrance; Ofev; Linzess; Calquence; Austedo; Austedo XR; Breo Ellipta; Tradjenta; Xifaxan; Vraylar; Janumet; Janumet XR; and, Otezla.

    To date, prices for some diabetes and cancer drugs, as well as drugs that treat blood clots, have been negotiated. In addition, as of January 1 of this year, Medicare Part D includes an out-of-pocket cap of $2,000, which was also part of the Inflation Reduction Act.

    It’s not clear yet whether Republicans in Congress will succeed at repealing these cost-savings provisions in the Inflation Reduction Act. Many of them appear to want to do so, even though it would drive up prescription drug costs for older adults and people with disabilities, as well as increase Medicare spending.

    Project 2025, the Heritage Foundation plan for the Trump Administration calls for repealing these provisions. And Senator Mike Crapo of Idaho, the new chair of the Senate Finance Committee, is fully on board. Pharmaceutical companies will continue to innovate in a world with drug price negotiations. They must. But, hundreds of thousands more Americans will die needlessly without negotiated drug prices, as they won’t fill their prescriptions. Drugs don’t work if people can’t afford them.

    Here’s more from Just Care:

  • Trump’s health care executive orders

    Trump’s health care executive orders

    As with many sectors of our economy, when it comes to health care you should expect a lot of changes from the Trump administration. And, based on Trump’s recent executive orders, millions of Americans could face higher health care and prescription drug costs. Tarena Lofton lays out the latest developments for KFF Health News.

    But, Trump’s most consequential health care act is to push Republicans in Congress to drastically cut Medicaid spending in order to pay for massive tax cuts for the wealthiest Americans. Republicans intend to push through these cuts in a reconciliation package to be finalized shortly. Cuts to Medicaid will affect more than 70 million Americans directly and their families and communities indirectly. If you oppose Medicaid cuts, please reach out to your Congressperson and Senators and let them know.

    Now, to some of the executive orders:

    1. Revoked: Trump revoked a Biden administration executive order requiring the Centers for Medicare and Medicaid Services to focus on new ways to lower prescription drug costs, including a Medicare project that would have established a list of drugs with a $2 copay. The bigger question is whether Republicans will try to undo provisions in the Inflation Reduction Act that allow Medicare to negotiate drug prices and set an annual out-of-pocket cap in Medicare Part D at $2,000.
    2. Revoked: Trump undid a Biden administration executive order that extended the enrollment period for Affordable Care Act health plans, as well as money dedicated to assisting people with enrollment. The bigger question is whether Republicans will end subsidies for people with lower incomes who are insured through the ACA health insurance exchanges. Those subsidies are set to expire at the end of this year.
    3. Withdrawn: Trump withdrew the US from the World Health Organization. The US had been a large supporter, giving the organization $1.3 billion in 2022 and 2023. WHO focuses on global health. It funds health projects around the world and responds to public health emergencies. Trump says he did not like the way the WHO handled the COVID pandemic. The bigger question is how the US will respond to public health emergencies.
    4. Unrecognized: Trump ordered the federal government to not recognize transgender and nonbinary identities. He ended federal support of health care delivered to people on the basis of gender identity. This order will likely be challenged in court. The bigger question is whether this order will be reversed in court.
    5. Expanded: Trump ended a policy that kept immigration officials from arresting people not legally in the US near schools, hospitals and churches.
    6. Withdrawn: Trump withdrew the US from the Paris Climate Agreement for the second time. The agreement specifically states that this process takes a year, but Trump ordered the immediate withdrawal.

    Here’s more from Just Care:

  • Prices for top Medicare drugs are up a lot

    Prices for top Medicare drugs are up a lot

    The prices for brand-name drugs have been rising much faster than the rate of inflation for tens of years, reports Leigh Purvis for AARP. Older and disabled Americans with Medicare feel these price increases, especially when they take as many as four or five prescription medicines every month and generally must pay a percentage of the cost of their drugs out of pocket.

    In the first two days of this year, NPR reports that drugmakers hiked up the price of 575 drugs by around three to four percent. That price hike is lower than in past years when drug price increases could easily be 10 percent, but higher than the rate of inflation. Because of the Inflation Reduction Act (IRA), drugmakers will face government penalties for these hikes, but they likely expect to offset the cost of those penalties with greater profits from people in the commercial market.

    About 20 percent of people with Medicare say that they manage the cost of their drugs by not filling prescriptions or not taking full doses. The AARP Public Policy Institute analyzed what’s happening with the 25 brand-name drugs that Medicare Part D spends the most on and that are not subject to Medicare drug price negotiation. Medicare spent about $50 billion on these drugs in 2022. Seven million people used these drugs.

    The Public Policy Institute found that the list prices for these 25 drugs nearly doubled since they first came to market, well above the rate of inflation. More than 40 percent of the brand-name drugs’ list prices today stem from price increases since they came onto the market.

    Purvis concludes that the IRA goes a long way to stop these huge price increases. Not only does it allow Medicare drug price negotiation, but it forces pharmaceutical companies to pay stiff penalties if they raise the price of their drugs above the rate of inflation. The IRA helps to ensure that people with Medicare can afford to fill their prescriptions and to promote good health outcomes.

    As of this year, because of the IRA, you should pay no more than $2,000 out-of-pocket for drugs covered through your Medicare Part D drug plan.

    Here’s more from Just Care:

  • Drug prices keep going up, some faster than inflation

    Drug prices keep going up, some faster than inflation

    Until Congress regulates drug prices in the US as every other wealthy country does, prescription drug prices will continue to go up and an increasing number of Americans will suffer or die because they can’t afford their drugs. In the week ending July 5, pharmaceutical companies raised prices for 195 drugs, reports MM+M. Price increases were greater than the rate of inflation for more than half of these drugs.

    Eli Lilly, BMS, Pfizer, AbbVie, Novartis and GSK raised prescription drug prices of certain drugs around seven percent, more than twice the rate of inflation, which was three percent. Prices rose $620, on average. Many of these drugs were cancer drugs or drugs for people with autoimmune conditions.

    The price of Revlimid, a Celgene/Bristol Myers Squibb drug, which treats myelodysplastic syndrome, multiple myeloma and mantle cell lymphoma increased seven percent. The drug price jumped from $83,322 to $89,155.

    Some drug prices rose only a small amount. But, we know that even a very small out-of-pocket cost increase for a drug means that some people will stop taking their drugs. These price hikes will not stop until Congress regulates drug prices.

    Medicare has begun negotiating the prices of ten high-priced drugs. We will know very shortly how the negotiated prices compare to what people pay in other wealthy countries for the same drugs. For reasons I cannot explain, people with Medicare will not benefit from these new prices until January 2026.

    Here’s more from Just Care:

  • JD Vance toes the GOP line on Social Security and Medicare

    JD Vance toes the GOP line on Social Security and Medicare

    J.D. Vance, Donald Trump’s vice-presidential pick, might be a smart man, but he does not appear smart enough to recognize the value of Social Security and Medicare. He also strongly opposes a woman’s right to an abortion. While he says he supports negotiating prescription drug prices, so did Trump at one time and then he didn’t. In short, we’re playing with fire if Donald Trump and JD Vance become our next president and vice president.

    Social Security and Medicare: To quote Nancy Altman, “Donald Trump’s selection of J.D. Vance to be his vice president is more evidence that our earned Social Security benefits are not safe if they are elected. Though Trump said in 2016 that he would not cut Social Security, every one of his budgets included cuts. Moreover, he unilaterally undermined its dedicated revenue (fortunately only temporarily), but promised that he would make those cuts permanent, if re-elected. Cutting Social Security’s dedicated revenue produces automatic benefit cuts. As president, Trump surrounded himself with Mike Pence, Mick Mulvaney and a long list of others with long anti-Social Security histories. Vance is no different: he praised former Rep. Paul Ryan’s plan to make massive cuts to Social Security and Medicare, and called Social Security and Medicare “roadblocks to any kind of real fiscal sanity.”

    Prescription drugs: Back in 2022, Vance said he supported Medicare drug price negotiation. It’s not clear if he continues to hold that position, given that Trump does not appear to do so any longer. Vance and Trump also say they support allowing companies to import drugs from abroad.

    Abortion rights: Vance strongly opposes a woman’s right to choose. His expressed position against abortion rights is even stronger than Trump’s.

    Here’s more from Just Care: