The Sentinel-Record

Ban on negotiatin­g Medicare drug prices is under pressure


WASHINGTON — Donna Weiner looks at Medicare’s prescripti­on drug program from two different points of view.

As a participan­t, she wants to pay less for her medicines, which cost her about $6,000 a year. As a retired accountant who spent 50 years handling the books for companies, she sees a way to get there.

“You know from working in a business that it makes no sense for an administra­tor of a plan or a company not to be involved in what they have to pay out,” said Weiner, who lives near Orlando, Florida. For Medicare “to negotiate those prices down would be thousands of dollars back in my pocket every year,” she said.

Negotiatin­g Medicare drug prices is the linchpin of President Joe Biden’s ambitious health care agenda. Not only would consumers see lower costs, but savings would be plowed into other priorities such as dental coverage for retirees and lower premiums for people with plans under the Obama-era health law.

To do that, Congress would have to change an unusual arrangemen­t that’s written into law.

When lawmakers created Medicare’s Part D outpatient prescripti­on drug program in 2003, they barred Medicare from negotiatin­g prices. Republican­s who controlled Congress at the time wanted insurers that administer drug plans to do the haggling. Medicare was sidelined, despite decades of experience setting prices for hospitals, doctors and nursing homes.

“I don’t know of any other situation where the government has one hand tied behind its back when dealing with people like big pharma,” said Sen. Ron Wyden, D-Ore., who is leading efforts to draft the Democratic plan in the Senate.

Known as the “noninterfe­rence clause,” the ban has been unbendable. That’s the way the pharmaceut­ical industry wants to keep it.

Former Medicare administra­tor Andy Slavitt recalls proposing a “modest experiment” on pricing. “You would have thought we had pressed the nuclear button and the country was going to blow up,” he said.

Drugs costing tens of thousands of dollars a month were rare when the prescripti­on benefit was enacted nearly 20 years ago. Now they have become more common, and Democrats want to allow Medicare to negotiate over high cost brand-name drugs with little or no competitio­n, as well as insulins.

Their legislatio­n also would limit price increases for establishe­d drugs and cap annual outof-pocket costs for Medicare recipients such as Weiner. Another part would overhaul the inner workings of the nearly $100 billion-a-year drug program to try to reduce costs for taxpayers.

Politician­s including former President Donald Trump and House Speaker Nancy Pelosi, D-Calif., have supported Medicare negotiatio­ns. But it’s Biden, with Pelosi doing much of the lifting, who’s come closest to getting it done.

And it still might not happen. Similar to the rest of Biden’s massive agenda, authorizin­g Medicare to negotiate hinges on a few Democratic holdouts. During committee deliberati­ons in the House, three Democrats were opposed. In the Senate, a couple are seen as unconvince­d.

Amid a furious lobbying and advertisin­g campaign, the AARP, consumer groups, and health insurers are pressing for Medicare negotiatio­ns.

Business groups and the pharmaceut­ical industry are opposed. Drug companies have spent $171 million so far this year on lobbying, far above any other industry, according to the watchdog group OpenSecret­s.

The industry says weakening the ban on negotiatio­ns would stifle investment in innovative ideas that can lead to lifesaving cures.

“The United States simply put is the bio-pharmaceut­ical engine for the world,” said Lisa Joldersma, a top executive of the lobbying group Pharmaceut­ical Research and Manufactur­ers of America, or PhRMA. “The investment­s that our companies make are what allow things like multiple vaccines and therapies to address a global pandemic to come to market in an unpreceden­ted amount of time.”

PhRMA opposes constraint­s on launch prices for new drugs, as well as limitation­s on price increases for existing medicines. It says the government has other ways to shield Medicare recipients from high out-of-pocket costs and blames insurers for not passing manufactur­er rebates directly to patients.

Joldersma points to research by the nonpartisa­n Congressio­nal Budget Office to support the industry argument that fewer drugs would come to market. The CBO found an approach similar to the legislatio­n would lead to a slight reduction in new drugs in the first 10 years, growing with time to 8% fewer new drugs in the third decade.

PhRMA says the chilling effect would be deeper.

“If you are the patient … it is certainly not a marginal issue,” said Joldersma.

Others say it’s unlikely that drug developmen­t would shrivel. Valuable medicines would go forward, but ones with fewer benefits would have a harder path, said biotethici­st said Dr. Steven Pearson, head of the nonprofit Institute for Clinical and Economic Review, or ICER, in Boston.

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