The Wall Street Journal reports that Congressional Democrats are trying to find a path to lowering drug prices. But, will they agree on a policy that delivers lower drug prices? Or, will they defer to the pharmaceutical industry and let prices continue to mount, even though such an outcome will be mean the needless death of tens of thousands of Americans each year.
President Biden, for his part, has been relatively quiet on this issue. He has said that he supports lower drug prices. But, he did not include it in any of his reform proposals this year. Notwithstanding, many Democrats in Congress recognize that delivering lower drug prices in the US will help to keep the Democrats in power in 2022.
Senator Wyden and his team on the Senate Finance Committee are focused like a laser on this issue. Reports are that the Senator would like to marry the Wyden-Grassley prescription drug bill with Speaker Pelosi’s bill in the House. The House bill goes a lot farther than the Senate bill; it is not finalized but, in 2019, it called for setting drug prices for 250 drugs at not higher than 120 percent of what other wealthy countries pay.
The Senate bill is also not finalized, but it aims to keep drug prices from rising more than inflation, which rewards all the drugmakers with the most inflated drug prices today. We do not yet know whether it will do anything to reduce the cost of life-saving drugs. In its last iteration, it also reduced out-of-pocket prescription drug costs for people with Medicare, but that’s simply squeezing a balloon. Most likely, premiums and other costs would rise.
A recent Government Accountability Office report found that brand drug prices in the US are three to four times higher than they are in France and other Western European countries.
Bringing down drug prices in the US for everyone is far more complicated than you might imagine. Congress does not have clear authority over corporate health insurers or over the price retail pharmacies charge for drugs. So, while the House bill will have Medicare negotiate drug prices and allow corporate health insurers to benefit from those prices, it’s not entirely clear how. The House bill does not cover the uninsured.
The easiest way to extend regulated drug prices to everyone is for Medicare to negotiate lower prices and for Congress to extend Medicare to everyone free of charge exclusively for the purpose of benefiting from these lower prices at the pharmacy. That is not likely. Alternatively, Congress could make drugs at low prices available to everyone through Federally Qualified Health Centers. At the moment, it does not appear that Congress is looking at this option either.
Congress could also lift the ban on prescription drug importation. Corporate health insurers, in turn, could then perhaps be required to cover drugs at those imported prices. The problem, of course, is there are many lifesaving drugs that cannot be imported. And, it can sometimes take months to receive drugs that are ordered from abroad.
Republicans now say that they are against Medicare-negotiated drug prices. But, Republican members of the Senate Armed Services Committee just a few years ago supported international reference pricing–pricing drugs at a level comparable to other wealthy countries–by unanimous vote.
Innovation would benefit significantly from negotiated drug prices. Congress could allocate some of the hundreds of billions of dollars saved each year towards research and development of new drug therapies. Right now, Pharma invests little in research and tends to invest primarily in new versions of drugs already available on the market–“me-too” drugs–rather than drugs that are truly breakthrough.
Democrats do not need a super majority to pass drug price legislation. They can pass it by simple majority through the budget reconciliation process. But, they will need Joe Manchin and Kirsten Sinema and Bob Menendez to vote with them. And, they are not yet guaranteed to do so.
Here’s more from Just Care:
- Risk to older adults of underuse of prescription drugs
- With drug prices soaring, millions buy drugs abroad
- Free local resources to help older adults
- $150,000: Your health care costs in retirement
- MedPAC: Traditional Medicare consistently costs less than Medicare Advantage
