WASHINGTON — The first-ever price negotiations for drugs taken by Medicare patients could benefit more than 450,000 Pennsylvanians who take medicine to treat ailments from diabetes to kidney disease to cancer, officials said Wednesday.
Biden administration officials said the efforts to lower prices will reduce out-of-pocket costs that average almost $5,700 a year for those who take Imbruvica, which is used to treat blood cancers.
“This is your mother with arthritis, your father with diabetes and your great aunt with Crohn’s disease,” Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, told reporters on a conference call.
“We are hopeful drug companies will come to the table and negotiate with us to make this a reality for the American people,” she said. “Our negotiations will be a good-faith effort to achieve the lowest prices.”
The Inflation Reduction Act, the sweeping domestic policy law enacted last year, removed a ban on price negotiations that Republicans included in the Medicare Part D prescription drug benefit they passed in 2003. The Department of Veterans Affairs already negotiates with the pharmaceutical industry over the prices of drugs it buys for its patients.
The drug companies’ trade group, Pharmaceutical Research and Manufacturers of America, already has gone to court to overturn the provision, part of President Joe Biden’s climate and health care legislation enacted over unanimous Republican opposition.
“Giving a single government agency the power to arbitrarily set the price of medicines with little accountability, oversight or input from patients and their doctors will have significant negative consequences long after this administration is gone,” Phrma President and CEO Stephen J. Ubl said.
“Politics should not dictate which treatments and cures are worth developing and who should get access to them,” Mr. Ubl said. “The cancer moonshot will not succeed if this administration continues to dismantle the innovation rocket we need to get there. The harm will spread beyond cancer and impact people with rare diseases, mental health illnesses and other terrible diseases.”
Passage of the legislation marked a rare defeat on Capitol Hill for drug companies, which last year spent $375 million on lobbying — more than any other industry, according to the research group OpenSecrets.
The drug industry supports almost 254,000 jobs in Pennsylvania and adds $67.3 billion into the state’s economy, according to Phrma.
Industry officials have argued that limiting price hikes would reduce the number of new cures coming onto the market. But a 2019 House Oversight Committee report found that the nation’s largest pharmaceutical companies spent more money on stock buybacks and dividends over the previous five years than on research and development.
“We are not backing down,” said Christen Linke Young, deputy assistant to the president for health and veterans.
The first 10 drugs subject to price negotiations are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and NovoLog. The final prices are to be announced next year and take effect in January 2026. The Congressional Budget Office estimated that the lower prices would save taxpayers $288 billion.
The number of drugs subject to price negotiations will increase in future years.
In addition, the law also will limit Medicare drug price hikes to the rate of inflation, and cap out-of-pocket drug costs to $2,000 a year. Already, the law has capped the price of insulin at $35 a month for Medicare recipients.
Drug prices are much higher in the U.S. than elsewhere. The U.S. in 2019 spent $1,126 per person on prescribed medicines, twice as much as comparable countries, according to KKF, a health care research group.
“This landmark law is already lowering drug costs for millions of Americans,” Ms. Brooks-LaSure said.“No one should have to choose between putting food on the table and paying for their prescription drugs.”
Jonathan D. Salant: jsalant@post-gazette.com, @JDSalant
First Published: August 30, 2023, 9:20 p.m.
Updated: August 30, 2023, 9:33 p.m.
