August 31, 2023

First Step to Lower Drug Prices

Photo courtesy American Prospect

The Biden administration just announced the first 10 drugs selected for Medicare Price Negotiation. Those on Medicare now get insulin for $35/month, and from 2025, their out-of-pocket costs will be capped at $2000 per year. Both changes stem from the Inflation Reduction Act, passed one year ago. Now, the government is moving on the rest of the pharmacy. The Center for Medicare Services (CMS) fact sheet lists the first 10, with a concentration on those for heart/circulation, diabetes and related disorders common to older beneficiaries.  

A couple of questions leap to mind.

First, why did it take so long?
Well, it’s complicated. Major planning takes place as a bill is drafted. Getting it through Congress intact takes more time and usually some horse-trading, especially if a couple of senators play ‘coy virgin’ for effect. All the while, industry lobbyists descend to work out ‘favorable’ terms. In this case, it was millions spent by the deep-pocketed pharmaceutical industry. Once passed, there’s the fine tuning. And of course, the lawsuits.

It all looks like greed vs public good. However, cutting profits in a major industry may mean cutbacks in certain operations and personnel. So, to be fair, a reasonable transition time also needs to be built into the change.

Second, what does this new move mean to me?
That depends. For seniors in the US, negotiated prices mean savings in the short term, i.e. over the coming year. Also likely, exposing the profit margin on the first 10 will encourage further ‘rationalizing’ of prices on other drugs. It might also encourage the government’s moving on to health providers, where consolidation and privatization have sent prices soaring in recent years.

So, for current retirees and other Medicare beneficiaries in the US, the change directly helps the pocketbook. For their families, it provides some relief from worry and having to help financially.  And, for everyone else, it’s part of planning a respectable retirement.

However, for those of us who live outside the US, the drug-price news is still a mixed blessing. Medicare services are not reimbursed outside the US, so accessing the care we’ve paid into adds travel expense, at the minimum. It may relieve some worry about our loved ones in the US, but many who’d like to bring elderly parents to live with them abroad are stymied by the cost of providing them health coverage. This is why Democrats Abroad have been working for Medicare Portability. Change is in the offing!

DA’s Medicare Portability Task Force chair Heather Stone and Seniors Caucus Medicare Part B expert Toni Kaminis will be headlining DAGR Kafeneion on October 25.

Stay tuned for RSVP details!

And stay tuned for more news from our friends in Congress, the Americans Abroad Caucus headed by Rep. Dina Titus, and supportive interest groups. We’re finally on the move!

By Karen Lee, DAGR Communications chair