Democrats in Congress are determined to bring down prices for at least some prescription drugs as part of the budget reconciliation bill. The question is how will it do so. Will members talk the talk but then appease big Pharma and not walk the walk? Those Democrats who want to ensure that their constituents are not dying for lack of needed medicines should be doing everything in their power to ensure lower drug prices for everyone in the US.
Rachel Cohrs reports for Stat News that Democrats in Congress are focused on lowering drug prices for people with Medicare as part of the budget reconciliation bill. If that’s all they do, the legislation will likely hurt their chances of reelection. You can be sure that Pharma will invest in a mass marketing campaign telling everyone who does not have Medicare that it plans to raise prices on their drugs to make up for lost Medicare profits. Some economists believe Pharma would not succeed, as drug companies are already getting the highest prices they can get. Regardless of whether the economists are correct, it’s the public perception that matters.
Crazy as it sounds, the Democrats do not have a simple plan to extend the benefits of Medicare drug price negotiation to everyone else in the country. The cleanest way to ensure everyone in America has affordable drugs would be to give everyone Medicare for the purpose of benefiting from its negotiated prices. But, too many conservative Democrats would object to that tactic, and it is not clear that it would fit into a budget reconciliation bill even if all the Democrats supported it. That said, a bill that does not allow everyone to benefit from negotiated drug prices indirectly or passively will result in people foregoing life-saving medicines and dying prematurely.
H.R.3, which passed in the House in 2019, relied on international reference pricing–benchmarking drug prices to the average of what other wealthy countries pay–as a means for Medicare to lower the price of 250 drugs over 10 years. It permitted private insurers to piggyback off those rates but did not lower drug prices for the uninsured. Rumor has it that the Dems, this go round, are not relying on international reference pricing but rather “domestic reference pricing,” basing drug prices somehow on prices already available in the US.
Of course, drug prices for the vast majority of people in the US are super high. So, unless Congress bases drug prices on the prices the Veterans Administration pays, domestic reference pricing will not reduce drug prices in a meaningful way.
Congress could make drugs available to everyone at the Medicare-negotiated price through community health centers or Federally Qualified Health Centers (FQHCs). There are more than 14,000 of these government-administered primary health care clinics. With additional resources, these clinics could be an avenue for giving everyone access to affordable drugs.
Even though the value of Medicare drug price negotiation is threatened if everyone does not benefit from negotiated drug prices, the Democrats are apparently struggling over whether to enable private health insurers to benefit from Medicare-negotiated prices and, if so, how? There could be challenges to getting that into the budget reconciliation bill since the case needs to be made that the reform affects the federal budget.
Critics of a bill that brings down drug prices for everyone claim that it would be “market-wide price setting,” which it would be. That’s what we have now as well, only it’s Pharma that’s doing the price-setting. As a result, we have Pharma price-gouging in the US that doesn’t exist in any other wealthy nation.
Another provision in the Democrats’ bill would limit the amount that drug prices could rise from one year to the next to the rate of inflation. Ideally, that policy would apply to all drugs sold in the US, not simply to Medicare-covered drugs. It’s not yet clear how Congress would hold the drug companies accountable if they failed to comply with that requirement.
Here’s more from Just Care:
- Speaker Pelosi’s drug bill passes in the US House of Representatives
- 2021: Programs that lower your health care costs if you have Medicare
- Congress must protect our community health centers
- Coronavirus: Why you should get a booster shot
- Coronavirus: Symptoms can differ for older adults
