Using Savings from Drug Pricing Reform to Expand Medicare

Published in RINewsToday on June 7, 2021

Ahead of President Biden’s first address to a joint session of Congress on April 28 and as the Democratic administration considers policies to slash rising drug costs, the U.S. Government Accountability Office (GAO) released a 65-page report finding that the U.S. pays more than two to four times higher prices for a selected sample of 20 single source, brand name drugs than Australia, Canada and France. The latest GAO report, commissioned by Sen. Bernie Sanders (I-Vt.), found that Americans, suffering from blood clots, bronchitis, emphysema and Hepatitis C, were paying more for life-saving treatments than patients in these industrialized countries. 

“This important GAO study confirms what we all already know: the pharmaceutical industry is ripping off the American people,” said Sen. Sanders in a statement announcing the March 29th release of the GAO report, “Prescription Drugs: US Prices for Selected Brand Drugs Were Higher on Average Than Prices in Australia, Canada and France.”

“The time is long overdue for the United States to do what every major country on earth does: negotiate with the pharmaceutical companies to lower the outrageous price of prescription drugs. I would urge the president to put this proposal in the American Families Plan and use the savings to expand and improve Medicare for older Americans. We can no longer tolerate the American people paying, by far, the highest prices in the world for prescription drugs,” says the Vermont Senator who chairs the Senate’s Budget Committee.

U.S. Paying Outrageous Drug Prices

The GAO study found that in 2020, the U.S. paid 4.36 times more than France, 4.25 times more than Australia and 2.82 times more than Canada for the selected drugs, which represent a sample of the drugs with the highest Medicare Part D expenditures and use. The researchers noted that the publicly available data for the comparison countries were gross prices that did not reflect potential discounts. As a result, the actual differences between U.S. prices and those of the other countries were likely much larger than GAO estimates.

According to the GAO report, while France and Australia operate universal, publicly funded health systems that include prescription drug coverage, both Canada and the U.S. have a significant number of people who do not have prescription drug coverage. But even when comparing the full cash retail prices of selected drugs, the prices quoted to individuals without prescription drug coverage, GAO found that prices were two to eight times higher in the U.S. than the same drugs from pharmacies in Canada. 

For instance, GAO found that the cash price of Epclusa (28 tablets), which treats Hepatitis C, or an infection that attacks the liver, is $36,743 in the U.S. but $17,023.63 in Canada. The cash price of Harvoni (28 tablets), which also treats Hepatitis C, is $46,570.33 in the U.S. but $19,084.54 in Canada. In another example, GAO cited that the cash price of Incruse Ellipta Inhalation Powder (30 inhalations), which treats chronic obstructive pulmonary disease (COPD), or a group of lung diseases which block airflow and make it difficult to breath, is $411.33 in the U.S. but $53.31 in Canada.

Because France and Australia have universal health systems that cover prescription drugs, Australians would pay up to a $28.09 copay for a month supply of these medicines, while patients in France would pay anywhere from $0 to $34.03 for the drugs. The maximum copay that high income seniors with prescription drug coverage in Ontario, Canada would pay for the drugs is $4.67.

Robbing Peter to Pay Paul

On April 23, 48, organizations, led by Indivisible, Social Security Works and Public Citizen, called on Biden to include bold drug pricing reforms in American Families Plan to expand Medicare, and the result of a new polls supports this legislative action. 

Drug pricing reform will produce upward of $450 billion in savings over 10 years, note the organizations, urging Biden to use these savings to reinvest in Medicare. The call for adding dental, vision and hearing benefits to Medicare, lowering the Medicare eligibility age to 50 and creating an out-of-pocket cap for medical expenses.

Alongside the letter, the organizations released the findings of a new poll from Data for Progress, widespread public support across party lines for expanding and improving Medicare. The poll’s findings noted that 86% of Americans, including 82% of Republicans, support adding dental, hearing and vision benefits to Medicare. It also found that three-quarters of Democrats, a majority of independents, and nearly half of Republicans support lowering the Medicare eligibility age to 55. 

“Allowing Medicare to negotiate drug prices down saves money for the federal government, which is the largest buyer of prescription drugs in the world,” said Alex Lawson, Executive Director of Social Security Works. “We must pump those savings back into Medicare to expand eligibility and add benefits that equalize Medicare with private insurance,” he says.

“Lowering the Medicare eligibility age to 50, capping out-of-pocket costs, and expanding benefits to include dental, hearing, and vision would improve access to care for millions of Americans. Far too many Americans have lost their insurance or put off needed care due to the COVID-19 crisis,” said Eagan Kemp, Health Care Policy Advocate for Public Citizen. “The Biden Administration and Congress have a chance to deliver important progress at a crucial time,” he says.

Adds Mary Small, Legislative Director for Indivisible, “With the consequences of the COVID-19 pandemic still being felt in our communities, now is a crucial moment to expand public health care coverage and deliver savings on prescription drug prices to the American people. Lowering the Medicare eligibility age to 50 will be an essential step toward reducing the racial health inequities by increasing coverage to communities of color and low-income folks.”  She adds, “Allowing Medicare to negotiate prescription drug prices and then reinvesting those savings back into the program to expand services further strengthens our path toward universal coverage for all.” 

Last Thoughts

Garnering applause, Biden put high drug costs on his Administration’s radar screen at his recent address before Congress. “Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower drug prescription prices. It won’t just help people on Medicare. It will lower prescription drug costs for everyone,” said the 46th President of the United States. “We’ve talked about it long enough. Democrats and Republicans, let’s get it done this year,” he said.

But actions speak louder than words, say Washington Insiders.  They note that Biden’s American Families Plan, did not include any proposal to slash pharmaceutical costs or lower the Medicare eligibility age. Is it possible for Biden to lower the drug prices in the United States, making the prices more comparable to other industrialized countries and to even expand Medicare, in the face of fierce opposition from Republicans, moderate Senate Democrats and pharmaceutical companies?  

According to the latest KFF Health Tracking Poll released June 3, 2021, the findings indicate that “nearly nine in 10 (88%) favor allowing the federal government to negotiate for lower prices on medications, including three-fourths (77%) of Republicans, nine in 10 independents (89%) and 96% of Democrats.” However, support dwindles “when the public hears argument made by pharmaceutical companies that it could lead to less research and development for new drugs, or that access to newer prescriptions could be limited,” say the researchers.

Will political pressure sway a divided Congress before the upcoming midterm elections to hammer out a bipartisan solution to put the brakes to the nation’s skyrocketing drug costs and to provide more American’s affordable health care through an expanded Medicare program. Its wait and see.

Nursing Home Care in the Spotlight

Published in the Woonsocket Call on August 4, 2019

Following on the heels of its March 6 hearing, “Not Forgotten: Protecting Americans from Abuse and Neglect in Nursing Homes,” the Senate Finance Committee held its second nursing home hearing this year, “Promoting Elder Justice: A Call for Reform,” on July 23, in 215 Dirksen, to study proposed reforms to reduce neglect and abuse in the nation’s nursing homes and to put a spotlight on the need to reauthorize key provisions of the Elder Justice Act.

During the two hour and twenty-minute morning hearing, Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Oregon) along 11 members of the Senate committee listened to the testimony of five panel witnesses.

In his opening statement, Grassley acknowledged that the work isn’t done yet to improving the care in the nation’s nursing homes and Congress must protect nursing home and assisted living residents and those in group living arrangements from harm. The Iowa Senator noted in the recently released U.S. Government Accountability Office (GAO) report the federal agency that provides auditing, evaluation, and investigative services for Congress, noted that while one-third of nursing home residents may experience harm while under the care of these facilities, in more than half of these cases, the harm was preventable.

Calls for Bipartisan Efforts to Improve Nursing Home Care

Grassley called on Congress to reauthorize programs, such as the Elder Justice Act, to put the brakes on the growing trend of elder an abuse fueled by social media.

Adds, Wyden, in his opening statement, there is now an opportunity for Congress to come together to hammer out bipartisan legislative reforms to fix the nation’s nursing home oversight efforts. He urged his fellow Senate committee members to work to reduce the instances of physical, sexual, mental and emotion abuse in nursing homes, that appears to be increasing. He also called for a redo to the federal nursing home rating system because it does not reflect the increased prevalence of abuse.

During the first panel, Megan H. Tucker, Senior Advisor for Legal Review, of the HHS Office of Inspector General (OIG), stated that abuse and neglect oftentimes are not properly identified, reported or even addressed. While most providers are delivering good care, Tucker warned that Health and Human Service safeguards are lacking.

Tucker testified that the Centers for Medicare and Medicaid Services (CMS) should use data more effectively and close the gaps in their reporting process to ensure that abuse and neglect are identified and the deficiencies corrected.

Concluding the first panel, John E. Dicken, Director, Health Care, of the U.S. Government Accounting Office (GAO), discussed a newly released GAO report, released at the hearing, that detailed a growing trend of abuse and neglect of residents. According to one GAO report findings, abuse deficiencies more than doubled between 2013 (430) and 2017 (875), with the greatest increase in actual harm and immediate jeopardy deficiencies, and that abuse is still under-reported, he said. The GAO report also expressed concern over “significant gaps” with CMS’s oversight.

Leading the second panel, Robert Blancato, Coordinator of the Elder Justice Coalition, called on Congress to reauthorize, the Elder Justice Act. With elder abuse becoming a “national emergency,” he urged lawmakers to dedicate funding for Adult Protective Services at the local and state levels. Blancato also stressed the importance of strengthening the long-term care ombudsman program, continuing the Elder Justice Coordinating Council, authorizing an Advisory Board on Elder Abuse, Neglect, and Exploitation, and finally funding for elder abuse forensic centers.

President and CEO, Mark Parkinson, of the Washington, DC-based American Health Care Association (AHCA), representing nearly 10,000 of the 15,000 plus nursing homes in the country who provide care to nearly four million individuals each year, stated he was not at the hearing to defend poor care but to provide solutions to Congress to prevent such incidents from happening again.

Fixing the Problem

Parkinson testified that over the past seven years, facilities participating in AHCA’s quality initiative, have shown improvement in 18 of 24 quality measures. Specifically, there are less hospital readmissions, fewer antipsychotic medications being prescribed, staff are spending more time than ever before with residents and today’s nursing homes are more person-centered care today than ever before.

Parkinson called on lawmakers to improve employee background check systems, add patient satisfaction data to CMS’s nursing home rating system, address the severe staffing shortage and to adequate fund Medicaid.

Finally, Lori Smetanka, Executive Director of the National Consumer Voice for Quality Long-Term Care, ended the second panel discussions, by warning that more must be done to protect nursing home residents from abuse.

Smetanka urged Congress to take steps to enforce minimum requirements for sufficient staffing, establish standards and oversight for nursing home ownership and operations, prevent rollback of nursing home regulatory standards, increase the transparency of information and to strengthen and adequately fund elder justice provisions.

Now, with the Congress putting poor nursing home care on its policy radar screen, both Democratic and Republic congressional leadership must work closely together to come up with bipartisan solutions. Fix this problem once and for all.

Senate Finance Committee members — Senators Lankford, Stabenow, Daines, Menendez, Carper, Cardin, Warner, Casey, Brown, Cortez Masto, and Hassan – attended the July 23 hearing

To listen to this Senate Finance Committee hearing, go to http://www.c-span.org/video/?462733-1/finance.

For a copy of the GAO report, http://www.gao.gov/assets/710/700418.pdf.