Tag Archives for Leigh Purvis

Cap on out— of-pocket costs for Medicare drug plan enrollees coming soon

Published in RINewsToday on September 2, 2024 

Back on Aug. 16th in 2022, President Joe Biden signed into law the Inflation Reduction Act of 2022 (IRA), it’s enactment lowering the health cost for millions of older Americans by lowering the high cost of prescription drugs by granting Medicare the power to directly negotiate drug prices with drug companies.  Rising drug costs were forcing some Medicare beneficiaries to cut their expenses by not filling a prescription or even skipping doses. This could lead to complications and side effects resulting in hospitalization, even death.

“AARP was instrumental in Congress passing the prescription drug law of 2022 to lower prices and out-of-pocket costs for Medicare enrollees,” said Jo Ann Jenkins, CEO of AARP in an Aug. 28 statement announcing the release of AARP’s new report. “As we approach January 2025, we want every senior in America to know that, thanks to the new annual cap which limits their out-of-pocket costs, they will have more money to invest in their families, spend on their broader health needs or simply save to achieve greater financial stability.”

Virtual Media Briefing Details Impact on IRA law

Last week, the Washington, DC-based AARP briefed the media on the state-level impact of the historic new federal protection for 56 million Medicare drug plan enrollees. The new law caps out-of-pocket prescription drug costs every year, beginning at $2,000 in January 2025. 

The nine-page Public Policy Institute report, released at the virtual media briefing, analyzes the number of enrollees (not receiving the Medicare low-income subsidy) that will benefit from the new cap by state, age, gender, and race between 2025 and 2029.

Nancy LeaMond, the chief advocacy and engagement officer for AARP, say putting the brakes to spiraling drug cost by enacting the IRA put money back into the pockets of millions of America’s retirees purchasing pharmaceuticals for their medical conditions. “Upwards of 95% of Americans, age 65 and older, have at least one chronic condition and close to 80% are dealing with 2 or more chronic conditions,” says LeaMond, like diabetes and heart disease, to debilitating neurological diseases like Parkinson’s and Ms.

“Prescription drugs are a lifeline, said LeaMond, stressing that medicine is only effective if you have the money to pay for it. The passage of IRA two years ago is already having a significant and positive impact on millions of Medicare beneficiaries who now don’t pay more than $35 a month for insulin and get free vaccines for things like shingles,” she noted. 

“There are even bigger savings coming down the pike, starting in January 2025. The total amount that folks enrolled in Medicare drug plans pay out of pocket for their prescriptions will be capped at $2,000 a year,” reports LeaMond.  

During the media briefing, Leigh Purvis, Prescription Drug Policy Principal, AARP Public Policy Institute, stated “one of the biggest challenges in the original Medicare Part D benefit was the lack of a cap on out-of-pocket spending.”  Even after reaching a certain limit, Medicare beneficiaries were still required to pay 5% of their drug costs, with no limit for those on expensive Medications, she said.

According to Purvis, out of pocket expenses could exceed $10,000 per year, “an unmanageable amount for anyone, but especially for a population with a Median annual income of $36,000. Because of this, AARP pushed for the inclusion of a cap on out-of-pocket spending for Medicare Part D, to be included in the IRA, she said.  And it was…

Purvis noted that 3 million Part D beneficiaries (who don’t receive the Medicare Part D low-income subsidy are expected to benefit from the $2,000 cap in 2025.  This number is expected to grow to over 4 million by 2029.  These Medicare drug plan enrollees would see average savings of roughly $1,100, or 56%, in 2025 for their prescription drugs. 

Purvis also gave a few other takeaways from the report.  On average,  approximately 1.4 million (40 percent) Medicare drug plan enrollees who reach the new out-of-pocket cap between 2025 and 2029 are estimated to see annual savings of $1,000 or more, and just over 420,000 (12 percent) will see savings of more than $3,000.  In addition, more than three-quarters of Medicare drug plan enrollees who will benefit in 2025 are between the ages of 65 and 84.

Finally, Paula Cunningham, AARP Michigan State Director (discussing  results of a state survey) and Diana Devito , who has lived with chronic lymphocytic leukemia for over 19 years, participated in the media briefing. Both reinforced  how the report’s numbers aren’t just statistics, they represent real people “who are being forced to make impossible choices.” 

Cunningham told a “heartbreak” story about a woman who had lost her husband, and she had to sell her wedding ring in order to pay for her prescription drugs. “She’s now deceased, but I will never forget her story, or the stories of people across this great state that we met who had to make difficult choices between paying rent or buying groceries to pay for their medications,” she said.

After experiencing the high prescription costs for treating life-threatening chronic disorder, Devito came to share how important a $2,000 cap can be “for people like me.”  She said, “It’s a real-life changer,” noting that everyone doesn’t understand that. “If you’re not taking one of these expensive drugs, you don’t realize the impact that it has on your life,” she added.

On Another Note…

U.S. Senator Jack Reed brings to my attention another Congressional report that details the Rhode Island specific data as to the impact of IRA on older Rhode Islanders.

According to the Congressional Joint Economic Committee (CJEC), this year, about 57,000 Rhode Island Medicare beneficiaries will save an average of roughly $200 each year because of IRA’s improvement to the Medicare Part D drug coverage. By 2025 this number would increase to 68,000 retirees, saving them an annual average of $340 on prescription drugs.

By allowing Medicare to negotiate with drug companies to bargain down the high cost of many lifesaving drugs, 29,000 retirees use drugs that are with the new negotiated prices, says the CJEC report.

For a copy of AARP Public Policy Institute’s Medicare Part D Out-of-Pocket Spending Cap, go to https://www.aarp.org/pri/topics/health/prescription-drugs/medicare-part-d-out-of-pocket-spending-cap-prescription-drug-costs/.

To learn more about AARP’s work to lower prescription drug prices, visit https://www.aarp.org/politics-society/advocacy/prescription-drugs/.

For a copy of CJEC’s report, go to https://www.jec.senate.gov/public/_cache/files/356ae3d2-af5e-4d32-bd42-fafc548173c5/ri-cost-savings-fact-sheet.pdf

For details how the IRA impacts older Rhode Island retirees, go to https://www.whitehouse.gov/wp-content/uploads/2022/08/Rhode-Island-Health-Care.pdf

Wake up call on spiraling brand-name drug prices 

Published in RINewsToday on August 14, 2023

By Herb Weiss

A new pharmaceutical drug price report that is both timely and overdue has been released by AARP’s Public Policy Institute, following on the heels of the Centers for Medicare & Medicaid Services (CMS) releasing in June, which revised guidance for the historic Medicare Drug Price Negotiation Program.  

This report details the list prices for the 25 brand-name drugs with the highest total Medicare Part D spending in 2021, noting that prices have increased by an average of 226%—or more than tripled—since they first entered the market. Those 25 drugs were responsible for $80.9 billion in total Medicare Part D spending in 2021, about 37% of the total spending, and were used by more than 10 million Part D enrollees.  It noted that, on average, nearly 60% of their current list price was due to price increases after the product entered the market.

The price of Enbrel, used to treat rheumatoid arthritis and psoriatic arthritis, has increased by 701% since coming to market in 1998, and the price of Januvia, used to treat diabetes, has increased by 275% since entering the market in 2006.

Overall, the lifetime price increases ranged from 20% to 739%, and all but one of the drugs’ lifetime price increases greatly exceeded the annual rate of inflation over the same period of time. 

Brand-name drug prices increase faster than inflation has – for decades

“Brand-name drug prices have increased dramatically faster than inflation for decades,” said Leigh Purvis, Prescription Drug Policy Principal, AARP Public Policy Institute, and author of the report.  “The median price of a new brand-name prescription drug is now approximately $200,000 per year, so even relatively small percentage price increases can translate into thousands of dollars and put life-saving medications out of reach of the patients who need them,” she said. 

“We know that there is lot of media attention on individual drug prices that take place year after year.  However, a lot less attention is paid to how those price increases are often building on top of a long line of price increases and how those relentless price increases add up over time,” says Purvis, during a press call to journalists scheduled on the day of the report’s release.

“These findings have huge implications for the people that AARP represents, many of whom need prescription drugs to help them stay well,” Purvis said. “People on Medicare prescription drug plans take on average of between 4 and 5 prescription drugs per month and their drugs are increasing covered using coinsurance where you pay a percentage of the drugs price instead of a flat co-pay.  In fact, across the country more and more people are facing cost sharing directly affected by drug price increases, whether it is by coinsurance or simply before they meet their deductible.  Millions of other people don’t have health coverage and are having to absorb the cost associated with growing drug prices on their own,” she said.

“Our analysis shows that drugs that have been on the market for twenty years or more have seen an average lifetime price increase of 592 percent.  In real terms this can be the difference of thousands of dollars for one person and enough to force the trade-offs that we often hear about, like choosing to put food on the table or being able to pay for gas,” notes Purvis.

“There is no justification for drug companies to engage in these type of price increases every year they are on the market, particularly increases that are so much higher than the price increases for other goods and services,”  adds Purvis. 

CMS releases revised guidance for negotiating with drug manufacturers 

Congress recently passed the Inflation Reduction Act (IFA), a federal law requiring drug companies to pay a penalty to Medicare if their drug’s price increases faster than the rate of inflation. The law will also give Medicare the ability to negotiate lower drug prices with drug companies for the first time. CMS is expected to announce the first 10 drugs selected for negotiation by September 1st, and the negotiated prices will become available in 2026.

“This historic law cracks down on the big drug companies and [will bring] real relief to millions of seniors who have been struggling with out-of-control prescription drug prices,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy and Engagement Officer. “American families simply can’t afford to keep paying the highest prices in the world for the medications they need.”

Last March, CMS issued initial guidance to seek comments on its historic Medicare Drug Negotiation Program.  The agency received over 7,500 comments from consumer, patient groups, drug companies and pharmacies.  In June, CMS released its revised guidelines detailing the requirements and parameters of how the agency will oversee the new program.

“Issuing final guidance for the Medicare Drug Price Negotiation Program is an important “next step” in controlling spiraling high drug prices, says AARP’s LeaMond, noting that Medicare’s new buying power will get a better price for Medicare beneficiaries, saving the program billions of dollars and making prescription drugs more affordable.

Opposition, of course

At press time, the Pharmaceutical Research and Manufacturers of America (PhRMA), the leading industry lobby group for pharmaceutical companies, along with a group of pharmaceutical companies and trade groups, are suing the U.S. Health and Human Services to block the implementation of the Medicare Drug Price Negotiation Program established by the Inflation Reduction Act enacted by President Biden last August. The U.S. Chamber of Commerce has also filed a lawsuit in a U.S. District Court in Ohio to ask for an injunction to keep the negotiations from going forward. The trade group is challenging the constitutionality of the IFA’s drug price negotiation program.   

It’s a very high lift and big burden to meet the standard to stop the law from being implemented,” noted Kelly Bagby, AARP’s Vice President at AARP Foundation Litigation, before AARP’s press call ended.

“It is entirely appropriate and is necessary and the public interest is so enormous in balancing of the government’s interest verses the pharmaceutical companies and Chamber’s interest in this case,” says Bagby,” stressing that beneficiaries have to win this case. “It’s so obvious that pharmaceutical companies are not the victims they are painting themselves to be, she adds, affirming her belief that beneficiaries and Medicare have the strongest argument.  

Bagby noted, “AARP is working to protect the integrity of whole Medicare program for everybody and to allow for older people to not have to make horrible choices about do I pay my rent or do I get to take my life saving drugs.” 

Reports a Wake-Up Call

Although PhRMA,  pharmaceutical companies and trade groups along with the U.S. Chamber are strongly opposed to CMS’s new program to negotiation drug prices, polls show that people aged 50 and over, view the lowering of the price of costly prescription drugs to be a very important policy issue to them. Purvis hopes that the recently released AARP report will serve as a wake-up call for every American who is skeptical about the importance of lowering prescription drug prices. “Higher government spending driven by drug price increases will affect all Americans in the form of higher taxes, cuts to public programs, or both,” she predicts.  

For a copy of AARP’s Medicare Part D Drug Price report, go to https://www.aarp.org/pri/topics/health/prescription-drugs/prices-top-medicare-part-d-drugs-tripled-since-entering-market.html.

House Committee Moves to Rein in Skyrocketing Prescription Drug Costs

Published in the Woonsocket Call on December 1, 2019

On Nov. 18, House Antitrust Subcommittee Chair David N. Cicilline (D-RI) and Judiciary Committee Chairman Jerrold Nadler (D-RI) introduced The Affordable Prescriptions for Patients Through Promoting Competition Act of 2019 (H.R. 5133) to put the brakes on skyrocketing prescription drug costs. The bill attacked increasing costs by prohibiting pharmaceutical companies from engaging in anticompetitive “product hopping.”

Two days later, the Committee unanimously passed the bipartisan bill to drive down the rising costs of prescription drugs. Now H.R. 5133 goes to the House floor for a vote.

“Big pharmaceutical companies have done everything they can to increase their profits regardless of who it affects. Their CEOs make millions in bonuses ever year while hardworking folks are forced to ration their medicine just so they can put food on the table for their kids,” said Cicilline, in a released statement announcing the introduction of the bill.

Since becoming Chair of the House Antitrust Subcommittee, Cicilline has sought to take on the anticompetitive behavior in the health care and pharmaceutical sectors. “This is wrong, and it needs to stop. This bill, along with the suite of legislation to lower health care costs the House has passed already this year, will put an end to anticompetitive behavior that is driving prices up while pushing the middle class further and further down,” says Cicilline in pushing for the bill’s passage.

“This bill builds on the Committee’s strong record of bipartisan legislation to confront one of the leading drivers of high prescription drug costs—efforts by drug companies to keep generic drugs off the market so that they can preserve their monopoly profits,” adds Chairman Nadler when H.R. 5133 was thrown into the legislative hopper. “The outrageous behavior of product hopping puts profits before patients and thwarts the competition that is essential to lowering prescription drug prices,” he charges. Nadler says that H.R. 5133 would “encourage drug companies to focus on delivering meaningful innovation for sick patients rather than delivering profits to their bottom line.”

Fixing the Problem

According to Cicilline and Nadler, pharmaceutical companies use a wide array of tactics when their patent on a drug is near expiration to switch patients to another version of the drug that they have the exclusive right to sell. Called “product hopping,” this anticompetitive practice extends the manufacturer’s ability to charge monopoly prices by blocking the patient’s ability to switch to a cheaper, generic alternative. Product hopping benefits the manufacturer’s bottom line at the expense of patients who are stuck paying higher prices often for many years at a time, they say.

The two Congressmen say that there is another roadblock to lowering prescription drug costs. Although antitrust agencies have made an effort to curb product hopping, the Federal Trade Commission (FTC) still faces a number of hurdles under existing law when trying to hold companies accountable for this anticompetitive conduct. The Affordable Prescriptions for Patients Through Promoting Competition Act of 2019 strengthens the FTC’s ability to bring and win cases against pharmaceutical companies that engage in all forms of product hopping.

A similar version of H.R. 5133 was considered in the Senate and it would save taxpayers an estimated $500 million according to the nonpartisan Congressional Budget Office.

A week earlier, before H.R. 5133 was passed by the and Judiciary Committee, a new report was released by AARP Public Policy Institute (PPI), giving data to Congress to enact legislation to lowering prescription drug costs. The report findings indicate that brand-name drug prices rose more than twice as fast as inflation in 2018.

According to the AARP PPI report, retail prices for 267 brand-name drugs commonly used by older adults surged by an average of 5.8 percent in 2018, more than twice the general inflation rate of 2.4 percent. The annual average cost of therapy for one brand-name drug ballooned to more than $7,200 in 2018, up from nearly $1,900 in 2006.

“There seems to be no end to these relentless brand-name drug price increases,” said Debra Whitman, Executive Vice President and Chief Public Policy Officer at AARP, in a Nov. 13 statement announcing the release of the report. “To put this into perspective: If gasoline prices had grown at the same rate as these widely-used brand-name drugs over the past 12 years, gas would cost $8.34 per gallon at the pump today. Imagine how outraged Americans would be if they were forced to pay those kinds of prices,” says Whitman.

Brand-name drug price increases have consistently and substantially exceeded the general inflation rate of other consumer goods for over a decade, notes the AARP PPI data.

If brand-name drug retail price changes had been limited to the general inflation rate between 2006 and 2018, the average annual cost of therapy for one brand-name drug would be a whopping $5,000 lower today ($2,178 vs. $7,202). The report’s findings note that the average senior takes 4 to 5 medications each month, and the current cost of therapy translates into an annual cost of more than $32,000, almost 25 percent higher than the median annual income of $26,200 for a Medicare beneficiary.

“While some people will undoubtedly see a slower rate of price increases as a sign of improvement, the reality is that there is absolutely nothing to stop drug companies from reverting back to double-digit percentage price increases every year,” said Leigh Purvis, Director of Health Services Research, AARP Public Policy Institute, and co-author of the report. “Americans will remain at the mercy of drug manufacturers’ pricing behavior until Congress takes major legislative action,” adds Purvis.

With over 340 days before the upcoming 2020 Presidential and Congressional elections, Senate Democrats say that more than 250 House-passed bills are “buried in Senate Majority Leader Mitch McConnell’s (R-Ky) legislative graveyard.” The Senate’s top Republican}, referred to as the “Grim Reaper,” has blocked consideration on these bills (including prescription drug pricing bills) effectively killing them. As the election day gets closer this number is expected to increase.

President Trump and Republican lawmakers are loudly chanting that the Democrats are “getting nothing done in Congress.” This is just fake “political” news. Major reforms that would prop up Social Security, Medicare, and lower Prescription Drug prices get the legislative kibosh in the GOP-controlled Senate. It is now time to put these bills to an up or down vote in the upper chamber. The voters will send a message to Congress next November if they agree with the results. It’s time for McConnell to put down his reaper

For details, of AARP report, go to http://www.aarp.org/rxpricewatch.

Herb Weiss, LRI’12, is a Pawtucket writer covering aging, health care and medical issues. To purchase Taking Charge: Collected Stories on Aging Boldly, a collection of 79 of his weekly commentaries, go to herbweiss.com.