No relief from high drug prices in the near future
If you were hoping that this was going to be the year of government action to lower prescription drug prices, I’m here to say that is not going to happen — even though the House of Representatives passed far-reaching legislation almost a year ago that would allow Medicare to begin negotiating drug prices for beneficiaries.
Recall that the 2003 law that made possible a prescription drug benefit for seniors prohibits the government from negotiating with drug companies in order to lower prices. The Senate has not taken up the bill, and Congress will have to start over in the next session.
In late summer President Donald Trump issued four executive orders that might have given Americans hope that help was on the way. One order would have allowed some drugs to be imported from Canada. Another made changes in the way discounts negotiated by pharmacy benefit managers are passed on to Medicare beneficiaries, and a third would have required government-sponsored dispensaries to make insulin and epinephrine available to low-income Americans without health insurance or who have insurance with high copays. Dispensaries were already making those drugs effectively free for low-income patients.
Then in mid-September, the president announced a fourth order that would allow Medicare to refuse to pay for drugs in the U.S. that cost more than what they do in other countries, a policy sometimes called international reference pricing or “most favored nations” policy.
All these proposals are pretty much empty promises until there is a concrete legislative or regulatory framework for implementing them. They are, in effect, symbolic political gestures.
“An executive order does not necessarily do anything,” says Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy. “They lack pretty critical details, and the actual rules do not exist.”
Legal scholars also raised questions about how these proposals would actually work. Rachel Sachs of the Washington University School of Law and Nicholas Bagley of the University of Michigan School of Law noted, for example, when it comes to importing drugs from Canada, the government “has offered very limited guidance to the states on how they might show that importation might reduce costs.”
The president also announced one more initiative: sending a $200 drug discount card to millions of seniors to help pay for some of their medications, which certainly can be high.
Such a card would hardly dent the bill for some of the newer medications such as those used to treat Crohn’s disease that can cost upward of $20,000 for a course of treatment.
Trump said the cards would be “incredible.” But getting them into the hands of Medicare beneficiaries is proving to be less than easy. The general counsel at the administration’s Department of Health and Human Services warned last week that the plan could violate election law by inappropriately using federal funds only a few weeks before an election. The plan, estimated to cost around $8 billion, would be paid for by taking money out of one of the Medicare trust funds. One trust fund is financed by payroll taxes and pays for beneficiaries’ Part A hospital coverage. The other fund is financed by funds from Congress and premiums beneficiaries pay for Part B physician and outpatient services and for Part D drug coverage.
A report from Medicare’s trustees released last spring noted the Part A fund is “not adequately financed over the next 10 years.”
It’s hard to see how sending current beneficiaries a one-time small gift card won’t make a looming problem for Medicare even worse.
While it seems that official proposals to lower prescription drug prices won’t make a difference any time soon, the main patient advocacy group working on the problem of high drug prices is trying to keep the issue alive. David Mitchell, who heads Patients for Affordable Drugs, told me, “We want to do everything in our power to ensure drug prices are part of the election.”
He said the group is calling on people nationally and in 15 key battleground states to vote for candidates who will stand up to Big Pharma and fight for lower drug prices.
I have never seen this much public interest in pharmaceutical prices during an election campaign. In many states, candidates for major U.S. Senate races are touting their records on prescription drugs and plans for dealing with high prices should they be elected.
Yet reality intrudes. Dr. Peter Bach, who heads the Center for Health Policy Outcomes at Memorial Sloan-Kettering Cancer Center in New York City, emphasized “It is very hard to fix drug pricing in the U.S.”