This agreement would cap out-of-pocket costs for insulin at $35 a month and all out-of-pocket medical costs for seniors at $2,000 a year.
Since the release of the Democratic Party’s $3.5 trillion budget draft in early August, intraparty tensions have been high as debate roils over what to cut and how to trim it so that the price tag becomes more amenable. On Wednesday, after almost three months of discussion, one hurdle of contention seems to have been cleared: the Democrats have reached an agreement about how to lower the price of some prescription drugs.
This agreement would cap out-of-pocket costs for insulin at $35 a month and all out-of-pocket medical costs for seniors at $2,000 a year. It would also allow Medicare the power to negotiate the prices of some drugs, as long as they have passed the exclusivity period and have no competition on the market. Negotiations will start with expensive anticoagulants and drugs for treating arthritis and cancer, beginning with ten drugs in 2023.
“We’ve heard this from people across the country who have serious illnesses and can’t afford their medicine,” said Senate Majority Leader Chuck Schumer (D–N.Y.) while announcing the agreement during a press conference Tuesday afternoon, “This deal will directly reduce out-of-pocket drug spending for millions of patients.”
The agreement also stipulates penalties for drug companies that raise the prices of their drugs faster than the rate of inflation. This provision would cover drugs sold on both the commercial and Medicare markets and begin as soon as next year. Representatives and professionals alike have raised concerns over how this penalty could impact the biopharmaceutical industry and related medical innovations.
“Under the guise of ‘negotiation,’ it gives the government the power to dictate how much a medicine is worth and leaves many patients facing a future with less access to medicines and fewer new treatments,” said Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), a trade group for large, research-intensive biopharmaceutical companies based in Washington, D.C. He elaborated, “while we’re pleased to see changes to Medicare that cap what seniors pay out of pocket for prescription drugs, the proposal lets insurers and middlemen like pharmacy benefit managers off the hook when it comes to lowering costs for patients at the pharmacy counter. It threatens innovation and makes a broken healthcare system even worse.”
Democrats hope to have the budget bill brought to the House floor within the week. In the meantime, they are still working through the final stances that this legislation will take on other financial issues such as decreasing carbon emissions and immigration.
