Tag Archives for Medicare beneficiaries

Medicare Drug Price Negotiation Program to save billions. Cut costs for 10 drugs, 2026

Published in RINewsToday on August 19, 2024

On Aug. 16, 2022, President Joe Biden signed into law the Inflation Reduction Act of 2022 (IRA), which aimed to reduce the federal budget deficit, invested in domestic energy production while promoting the use of clean energy.  The historic federal law (Public Law 117-169) also lowered 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 

 IRA also created the first ever annual cap on out-of-pocket drug costs for Medicare beneficiaries,  capping the cost of each covered insulin at $ 35 per month, and the law also made the Affordable Care Act market plans more affordable.

On Aug. 15, 2024, just one day before IRA’s 2nd Anniversary, Biden and Vice President Kamala Harris unveiled the new lower prices for 10 drugs in which Medicare and drug companies negotiated under the new Medicare Drug Price Negotiation program. As a result, the negotiated prices will save the Medicare program some $6 billion.

Before a crowd of thousands at the Price George’s Community College in Largo, Maryland, Biden and Vice President Kamala Harris who has become the presumptive Democratics nominee for president, made the announcement. 

“We finally beat Big Pharma,” said  Biden.

 Sixty-five million Medicare beneficiaries give Medicare “collecting bargaining power,” noted the Vice President. “And now Medicare can use that power to go toe-to-toe with Big Pharma and negotiate lower drug costs,” said Harris.

And that they did. 

Medicare’s Bargaining Power Puts the Brakes on Rising Drug Costs

 Empowered by the passage of IRA, Medicare was able to negotiate 38-79% discounts on 10 life-saving drugs that treat heart disease, diabetes, cancer, and other serious conditions.  These include popular, brand name drugs such as Eliquis, Jardiance, Farxiga, and Stelara — some of the expensive and commonly prescribed medications in the Medicare program.

 The Centers for Medicare and Medicaid Services (CMS) announced on Aug. 15, 2024, beneficiaries will now save $1.5 billion in out-of-pocket drug costs thanks to newly announced prices negotiated by the Medicare program with Big Pharma. The negotiated prices will save the Medicare program some $6 billion in costs. 

According to CMS, “the selected 10 drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20%, of total Part D gross covered prescription drug costs between June 1, 2022 and May 31, 2023, which is the time period used to determine which drugs were eligible for negotiation.”    8 Eight of the 10 drugs selected for this year’s negotiation program raised their prices in 2024 – after all 10 drugs were already priced three to eight times higher in the United States than in other countries, noted the federal agency.

The new prices take effect in January, 2026.  Under the IRA’s provisions, Medicare will select up to 15 more drugs covered under Part D for negotiation by Feb.1, and those prices will take effect in 2027. It will expand 20 drugs starting in 2028, says CMS. 

“It’s no exaggeration to say that this a truly historic moment.  We have been advocating for Medicare to have the power to negotiate drug prices with Big Pharma since 2003, when prescription drug coverage was added to the program,” said Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM).  “Unfortunately, the law literally forbade Medicare from negotiating prices with drug makers. The Inflation Reduction Act finally changed that, he said.

According to Richtman, billions saved are proof that the federal government can, and should, leverage its buying power to save Medicare beneficiaries  money — in this case, giving relief to millions of seniors of not having to pay for high drug costs. “This is momentous news for Medicare beneficiaries and the Medicare program itself,” he says.

“The negotiated prices of these first 10 drugs are a great start. We would like to see even more drugs included more rapidly in the negotiation process so that seniors can reap the maximum cost-savings that this process can provide,” said Richtman.                                                                                    

Responding to the White House’s announcement of new details about Medicare drug price negotiations, in a statement Richard Fiesta, Executive Director of the Alliance for Retired Americans, noted that it took more than two decades of activism on the ground, advocacy by thousands of members and the Biden Administration to push for passage of IRA, giving Medicare the power to negotiate fair prices to patients and taxpayers.

 “The savings are staggering. The new prices are 60% lower on average with two drugs slashed by more than 75% per month,” says Fiesta. “Combined with the $ 2,000 out-of-pocket cap on drug costs that will take effect in January, millions of Americans will not be healthier and more financially secure,” he says.

 Fiesta notes, according to the U.S. Congressional Budget Office, in future years, the prices of additional drugs will be negotiated and Medicare will save about $ 100 billion over 10 years. 

While Biden and Democratic lawmakers see the value of granting Medicare the power to negotiate with Drug Companies to lower high drug costs,  no GOP lawmaker voted to pass Biden’s IRA last year, a proposal that allowed Medicare to negotiate with drug companies to lower the cost of drugs.

Not Everyone is On Board 

The drug price policies of IRA were the topic of a Sept. 20, 2023  hearing of the Oversight and Investigations Subcommittee of. House of Representatives’ Energy & Commerce Committee. The hearing, “At What Cost: Oversight of How the IRA’s Price Setting Scheme Means Fewer Cures for Patients,” GOP lawmakers sitting on the panel and four witnesses warned how the drug price negotiations could hurt or help market conditions for new medicines.

 At the hearing, House Energy and Commerce Committee Chair Cathy McMorris Rogers (R-WA) warned that the “Democrat’s drug pricing control scheme was going to do immense harm to patients by crushing drug innovation.  She charged that “unaccountable bureaucrats -not cutting-edge science- backed with entrepreneurial initiative- dictate the value of new cures.”

At press time, GOP lawmakers have remained silent as to their thoughts about last week’s announcement of Medicare lowering the drug prices for ten of the most expensive drugs in Medicare.  

But not President and CEO Steve Ubl – Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Steve Ubl quickly released a statement.

 “The administration is using the IRA’s price-setting scheme to drive political headlines, but patients will be disappointed when they find out what it means for them. There are no assurances patients will see lower out-of-pocket costs because the law did nothing to rein in abuses by insurance companies and PBMs who ultimately decide what medicines are covered and what patients pay at the pharmacy,” he said.

“As a result of the IRA, there are fewer Part D plans to choose from and premiums are going up. Meanwhile, insurers and PBMs are covering fewer medicines and say they intend to impose further coverage restrictions as the price-setting scheme is implemented. More than 3 million beneficiaries taking medicines with government-set prices will pay more in 2026,” adds Ubi.

Reflecting Roger’s opening hearing statement last year, Ubi noted: “The IRA also fundamentally alters the incentives for medicine development. Companies are already changing their research programs as a result of the law, and experts predict this will result in fewer treatments for cancer, mental health, rare diseases and other conditions. Medicine development is a long and complex process, and the negative implications of these changes will not be fully realized for decades to come.

“The ironically named Inflation Reduction Act is a bad deal being forced on American patients: higher costs, more frustrating insurance denials and fewer treatments and cures for our loved ones.” charges Ubi.

Following in PHARMA’s footsteps, drug companies also issued statements opposing the power given to Medicare to negotiate lower drug prices.  Novartis, manufacturer of Entresto, one of the 10 selected medicines participating in the price setting process issued a statement.   It called the negotiations “unconstitutional,” predicting “it would have long-lasting and devastating consequences for patients by limiting access to medicines now and in the future.”

Seniors Support Allowing Medicare to Negotiate Drug Costs 

As Congress began debated the merits of the IRA, a national poll of older Americans tracked wide-support for its provisions to reduce skyrocketing drug costs.

According to KFF Health Tracking Poll, a Oct. 12, 2021 poll, few accepted PHARMA and drug makers dire warnings that  high drug prices are necessary for supporting research into new drugs.  Giving the federal government the buying power to negotiate lower drug prices with drug makers and those enrolled in private plans were “favored by large majorities across the political partisans, even if they hear arguments from both sides,” said the San-Francisco-based  national newsroom that produces in-depth journalism about health issues.

KFF poll findings indicated that  83% of the public favor allowing the federal government to negotiate with drug companies to lower drug prices on behalf of people enrolled in Medicare beneficiaries and private plans. “This includes 91% of Democrats, 85% of independents, and 76% of Republicans, as well as majorities of seniors (84%), who would be most affected by such a provision, the findings indicate.

As older voters go to the polls, one thing is clear.  Lowering the cost of pharmaceuticals is a bipartisan issue.   When the dust settles after the November elections, those taking the reins of Congress must not forget this fact and continue to push for policies that will continue to work of IRA.

For fact sheet on Medicare Drug Price Negotiation Program, go to https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf

Will Social Security survive the midterms?

Published in RINewsToday on October 31, 2022

With the midterm elections just a week away, the sputtering economy and inflation top the public’s agenda. If voters hold President Joe Biden and Democratic lawmakers accountable for these concerns, voting for Republican candidates might just give control of Congress to the GOP.  By controlling the legislative agenda of both chambers, the GOP could drastically impact the future of Social Security and Medicare, warns the Washington, DC-based Center for American Progress (CAP), a public policy research and advocacy organization.   

House Minority leader Kevin McCarthy (R-CA) signaled on Oct. 18 during a Punchbowl News interview that the GOP would use next year’s debt limit threat as a bargaining chip to force spending cuts to entitlement programs including Social Security and Medicare, warns CAP, sounding the alarm in an Oct. 21st website article.

CAP’s article reported that McCarthy’s statement reveals how he might use the upcoming debt-limit debates next Congress to make cuts in entitlement programs if he takes control of the House’s legislative agenda next Congress. “You can’t just continue down the path to keep spending and adding to the debt.  And if people want to make a debt ceiling {for a longer period of time}, just like anything else, there comes a point in time where, okay, we’ll provide you more money, but you got to change your current behavior.” When pressed on whether the GOP would seek cuts to entitlement programs in a debt ceiling fight, the House Minority Leader refused to take Social Security and Medicare cuts off the table, saying “he wouldn’t predetermine anything,” he said.

Over the past ten months some Republican lawmakers have transparently outlined their plans to change the entitlement programs, noted CAP, detailing these examples:  

Nearly 75% called for slashing and privatizing Social Security, raising the retirement age to 70, and ending Medicare as we know it as part of the Republican Study Committee FY 2023 budget, says CAP.  

According to CAP, statements made by two Republican Senators might gain traction in a GOP controlled Congress.  Specifically, Rick Scott (R-FL), Chair of the National Republican Senatorial Campaign Committee, might gain support for his “Rescue America” plan, that would sunset Social Security and Medicare after five years, and recreate it every five years.

Over four months ago, Senator Lindsey Graham (R-SC), a key Republican on the Senate Budget Committee, promised “entitlement reform is a must for us to not become Greece” if the Republicans control the upper chamber,” noted CAP. 

CAP also noted that Republican Senate and House candidates in hotly contested races also called for changes to Social Security and Medicare and prescription drug reforms that lower drug costs for seniors. 

Added CAP, “Forty seven percent of Republican candidates for U.S. House running in toss-up districts, according to the Cook Political Report, actively support ending Social Security or Medicare as we know it.”

House and Senate Republicans are calling for the repeal of the recently enacted Medicare drug reforms. “In a Sept. 2022 story in Axios, several House Republicans called for repealing the prescription drug reforms included in the [recently enacted] Inflation Reduction Act.  Rep. Kevin Brady (R-TX), the ranking member of the powerful House Ways and Means Committee, saying, “I would image that will be a top priority for Republicans in the new [Congress],” says CAP.

Even before the dust settles after the upcoming midterm elections, Republican Senators have sponsored legislation to eliminate Medicare prescription reforms, says CAP.  “Senate Republicans Marco Rubio (R-FL), Mike Lee (R-UT), Cynthia Lummis (R-WY), and James Lankford (R_OK) have sponsored legislation to repeal the Inflation Reduction Act’s prescription drug provisions, including the creation of a $2,000 out-of-pock cap on prescription drug spending for Medicare Beneficiaries; a crackdown on drug companies that increase drug prices in the Medicare program faster than inflation; and empowering Medicare to negotiate for lower prescription drug prices,” notes the web article.  

Can Rhode Island’s new congressman stand up to House GOP leadership?

Throughout the CD2 campaign, RI General Treasurer Seth Magaziner has tried to tie former Mayor Allan Fung to the GOP agenda to cut Social Security and Medicare.  Fung has called his Democratic opponent “a liar,” stating that his own mother relies on her Social Security check. During his debates, the GOP candidate says,  “Do you think I would ever do anything to hurt my own mother?” he says.

Fung calls for bipartisan support to strengthen Social Security – like “Scrapping the Cap” that will tax persons at higher incomes, and for the expansion of coverage for dental work, vision care, and hearing aids.  

Fung also distances himself from the far-right Republicans by consistently saying he has a long history of being a political moderate and taking a balanced approach and working across the aisle to get things done. He pledges to co-sponsor bipartisan legislation.

While Fung stays razor focused on tying Magaziner, President Biden and Congressional Democrats to causing high inflation rates and a sputtering economy, Magaziner says don’t forget about Social Security and Medicare.

In an interview with Politico Fung said, “I’ve always been that middle-of-the-road, common sense-type person. They’re talking like, ‘Oh, there’s this radical Republican.’ That’s not me.”

Politico continues, “Fung is among a small cadre of centrists looking to revive the mantle of New England Republican in the House. They’re largely running away from Trump and social conservatism, hitting their Democratic opponents on record-high prices and betting that inflation worries over everything from home heating oil to fertilizer will resonate in the region’s mix of tiny blue-collar cities, wealthy suburbs and family farms.”

Fung talks frequently about his intent, if elected to be involved in the “Problem Solvers Caucus”,  an independent member-driven group in Congress, comprised of representatives from across the country – equally divided between Democrats and Republicans – committed to finding common ground on many of the key issues facing the nation. He hopes to have a leadership role in this group, bringing a more moderate Republican influence to Congress.

As a moderate freshman congressman, can Fung be a strong voice to the GOP leadership against any proposal that would make cuts to Social Security and Medicare?  As a moderate freshman congressman, can Magaziner be a strong voice to the Democratic leadership?

It’s clear that after a Congressman (Langevin) with considerable years of clout in congress, both candidates will have a path in front of them to create their own influence and strength.

AARP Rhode Island calls on Congress to act on lowering high drug costs

Published on March 14, 2022 in Rhode Island News Today

On the day before the Washington, DC-based AARP’s March 8th launch of its new ad campaign showing the impact of Congress’s failure to act on prescription drug prices, AARP Rhode Island State Director Catherine Taylor, Volunteer State President Marcus Mitchell and Volunteer Lead Federal Liaison Dr. Phil Zarlengo joined Rhode Island US Senators Jack Reed and Sheldon Whitehouse for a virtual news conference highlighting the need for Congress to act now to slash rising prescription drug costs. 

During the 26 minute and 45 second event, AARP Rhode Island, representing 132,000 members, delivered a petition signed by more than 16,114 Rhode Islanders, calling for Congress to act now and stop unfair drug prices. AARP has called for fair drug prices for years and supports legislation that passed the House in November, which would allow Medicare to negotiate drug prices, put a cap on out-of-pocket costs that older adults pay for their prescription drugs and impose penalties on drug companies that raise prices faster than the rate of inflation.

“Americans are fed up with paying three times what people in other countries pay for the same drugs. More than four million people across the country, including more than 16,000 here in the Ocean State, are joining AARP to demand lower prices for prescription drugs,” said Taylor in a statement announcing the petition being delivered to Reed and Whitehouse. “There will never be a better time to lower drug prices than the historic opportunity in front of Congress. Now is the time to get it done!” Taylor says.

Big Pharma makes billions from high drug costs

“Big Pharma is making billions while seniors and taxpayers are suffering,” says AARP State President Mitchell, noting that just last month Big Pharma raised the prices of 800 prescription medications.” People are sick and tired of paying three times for prescription drugs what people in other countries are paying for these drugs, “It’s outrageous and unacceptable,” Mitchell said.

According to Mitchell, “if consumer prices had risen as fast as drug prices during the last 15 years, gas would cost $12.20 a gallon and milk would cost $13 a gallon.” This gives perspective to this issue, he said.

“Big Pharma is trying again to scare lawmakers and members of AARP and everyone else with misleading claims to stop Medicare to negotiate prices, charged Zarlengo. “We, at least, know the truth. The truth is by allowing Medicare negotiation [of prices], that process will help seniors during these times of inflation by lowing their prices of drugs and putting more money in their pocket,” he said.

Zarlengo gave the two Rhode Island Senators a message from Rhode Island seniors: “Don’t let Pharma win this time, lets lower drug prices now.”

“We hear you loud and clear,” said Senator Reed, responding to the over 16,000 signees of AARP’s petition. “Congress must address this issue of drug pricing. The system continues to force families into untenable choices between their health and other basic needs. One of the simplest things to do is to allow the federal government to negotiate drug prices for Medicare beneficiaries. I have been urging administrations, both Republican and Democratic for more than a decade to do this,” he noted.

“The VA already does this,” said Senator Whitehouse told his fellow panelists and those tuning in to the March 7 news conference. “And there is a big discrepancy in what the Veterans Administration (VA) pays for drugs and what Medicare pays for drugs. We have a reconciliation bill still in the Senate; it’s something Democrats can pass with only 50 votes. The bad news is that we need all 50 members to agree on the reconciliation measure and that has proven difficult. I hope we can agree on a package that all 50 of us can sign off on… and finally, finally, finally give Americans the drug pricing relief that they need. AARP is incredibly important in this fight. All your members make a difference. Thank you for stepping up yet again,” he said.

AARP fights Big Pharma on television and with digital advertising

In AARP’s new ad campaign, Larry Zarzecki, a retired law enforcement officer with Parkinson’s Disease who was forced to sell his home in order to afford his medications, returns to the airways as a spokesperson for AARP, illustrating the impact of the high cost of prescription drugs on seniors.  The retiree first shared his story in an AARP ad three years ago, but Congress’ failure to act means he has had no relief from the high cost of his treatments. As he says in the new ad, “I shouldn’t have to decide between my home or my medicine because Congress refuses to act. I’m tired of waiting for Congress.”

AARP’s seven-figure ad buy includes television and digital advertising in the DC area, and television in Arizona, Colorado, Georgia, New Hampshire, New York, Nevada, and Pennsylvania.

Responding to AARP’s new ad campaign, AARP Rhode Island’s Taylor said: “Larry Zarzecki was forced to sell his home in order to afford his medications.  He is but one example of Congress’ failure to act. No one should have to give up a home in order to pay for over-priced prescription medicines.  She called on Congress to put a stop to “spiraling price increases” by giving Medicare the authority to negotiate with pharmaceutical companies for lower prices.

“If the Veterans Administration can do so – paying roughly half as much for brand name prescription drugs as does Medicare Part D – then why can’t Medicare?” says Taylor.  “For a decade, Big Pharma has spent more on stock buybacks and dividends than on research and development; it’s outrageous that drug makers are charging Americans three times what people in other countries pay for the same drugs and justifying it with lies and scare tactics that simply don’t hold up,” she  added.

AARP has called for lower drug prices for years and is urging the Senate to pass legislation that would allow Medicare to negotiate drug prices, put a cap on out-of-pocket costs that older adults pay for their prescription drugs and impose penalties on drug companies that raise prices faster than the rate of inflation.

“Americans are sick and tired of Congress’ broken promises to bring down the price of prescription drugs,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer announcing the launching of this ad campaign. “As Americans pay more and more for many consumer goods, Congress has an historic opportunity to lower drug prices and help seniors like Larry to afford their medications and other essentials,” she said.

It’s time to act NOW

According to AARP, without congressional action, pharmaceutical companies will continue to set high prices for prescription drugs and raise them without any warning or justification. The Washington, DC based advocacy group representing 38 million members recently released a report showing that 75 of the 100 brand name drugs with the highest total Medicare Part D spending have already increased their  list prices in the first month of 2022.

During the State of the Union, President Biden called for Congress to bring down the price of prescription drugs as a way to help consumers manage rising prices. The House of Representatives passed several prescription drug measures as part of the Build Back Better Act in November, but the Senate has yet to pass similar legislation.

It’s time for the Senate to put the welfare of the nation’s seniors first by passing legislation to put the brakes to spiraling prescription drug costs. This will be a hot campaign issue in the upcoming mid-term elections, just 230 days from now.