Read on, but keep in mind capping patient cost sharing and out-of-pocket costs is not controlling costs at the root cause and does not address the problem.
I hope the President actually means negotiate and if Medicare is successful there is a plan that protects the private sector from cost-shifting to pick up the loss caused by Medicare prices.
Limiting patient cost to $35 per month for insulin shifts costs elsewhere and just like the mandate to make contraceptive “free” ignores the ability of the patient to pay. Another inefficient broad brush approach.
And while all these bandaids are applied, nary a word on why we – only one of two countries in the world – allow direct to consumer advertising by pharmaceutical companies. If we are so keen on doing what other countries do, here is a place to start.
WASHINGTON — President Biden took to his bully pulpit Monday to urge Congress to pass the Build Back Better bill and specifically the provisions in it to lower the cost of prescription drugs, including insulin. “We’re going to end the days when drug companies could increase the prices with no oversight and no accountability,” Biden said in a speech from the East Room of the White House. “Going forward, drug companies that increase the prices faster than inflation are going to face a steep excise tax. We’re saying to drug companies, ‘When your prices to the American people go up, you’re going to be accountable.'”
The president began his remarks by acknowledging the “groundbreaking, life-saving” work many pharmaceutical manufacturers are doing. “Look no further than vaccines and the treatments they’re manufacturing and delivering that are helping fight this pandemic,” he said. “Our miraculous therapies have, in some cases, turned diseases that were once considered death sentences into treatable conditions.” However, Biden continued, “we can make a distinction between developing those breakthroughs and jacking up prices on a range of medicines which have been on the market for years without making a substantive change in the medication itself.
Here in America, it will not surprise you to know that we pay the highest prescription drug prices of any developed nation in the world … We pay about two to three times what other countries pay for the same drug.” For example, one anti-cancer drug that costs $14,000 in the U.S. costs only $6,000 in France, he noted, adding that today, “one in four Americans who take prescription drugs have struggled to afford them.” Insulin is a particularly egregious example of the problem, according to the president.
Although one bottle costs less than $10 to produce, “for certain types of insulin, prices have increased by 15% or more each year for the past decade. Depending on the nature of someone’s type 1 diabetes, the average sticker price for a month’s supply of insulin is about $375 — but for some people, it can be as high as $1,000 a month because they need to take more.”
To address this problem, the Build Back Better bill, which has been passed by the House but not by the Senate, would cap patient cost-sharing for insulin at $35 per month. “Whether you get health insurance through private policy, the Affordable Care Act (ACA) marketplace, or through Medicaid, nobody is going to pay more than $35 each month for insulin,” Biden said. The bill also would make it less expensive for low-income people to sign up for health insurance on the ACA’s insurance exchanges, and would add a Medicaid-like program in states that haven’t expanded Medicaid under the ACA; both types of insurance would include a drug benefit. For those on Medicare, the bill includes a provision allowing that program to negotiate prices with drug companies, although the provision limits negotiations to a small number of drugs — starting with 10 drugs in 2025 and increasing slightly in subsequent years — as well as all insulin products.
“What I’m proposing is that we negotiate a fair price, one that reflects the cost of research and development, and a need for significant profit, but that is still affordable to consumers,” said Biden. “Right now, drug companies will set the price at whatever the market will bear.”
The bill also would cap the amount that seniors on Medicare have to spend on prescription drugs at no more than $2,000 per year, with Medicare and drug companies picking up the rest of the cost. “I’ve long said healthcare should be a right, not a privilege, in this country,” Biden concluded. “We need Congress to finish the job, to come together and make the difference in people’s lives.” …
Not surprisingly, drug companies were not happy with the president’s speech. “A damaging bill jammed through a partisan process will not provide patients struggling to afford their medicines meaningful relief,” said Stephen Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America, in a statement. “We know when government bureaucrats set the price of medicine, patients ultimately have less access to treatments and cures. The bill also stifles the development of new uses for and improvements to medicines after they are first approved, threatens the introduction of generic and biosimilar medicines, and unwinds successful incentives that spur the development of treatments for rare diseases.”
Source: Biden Urges Action on Build Back Better Bill, Especially Drug Pricing Provisions | MedPage Today
If you are interested, here is a summary of how France manages drug costs and spending. https://www.commonwealthfund.org/sites/default/files/2019-11/Rodwin_pharma_cost_control_France_ib_v2.pdf
To control spending, France sets maximum prices for new products that reflect the added value of the new drug compared with a comparator product. The country also prohibits price increases after a new drug’s launch and, after five years, lowers prices and obtains additional discounts based on market competition. France also requires manufacturers to pay rebates if spending exceeds a national pharmaceutical spending cap set by Parliament. By employing approaches used in France, private and public payers in the U.S. could reduce drug spending without restricting access to new drugs.
Unfortunately, I have six scripts. Fortunately, all are generic in nature. My total cost (if I went to Krogers and bought them all without using insurance) would be about $1,600 a year. I doubt that my cost is 256% higher than what I (and the french government) would pay in France – which would be an annual cost of $625.
In other words, I think there is an even greater difference in price (far in excss of 256% more) for expensive Rx, stuff that is new, not in anyone’s formulary, etc. So, I again say that averages can be deceiving. And, importantly, for those extreemely pricing Rx, and, frankly, many everyday Rx, those living in many other countries don’t get them … and they suffer either a reduced standard of living, or perhaps they die.
So, if you “sqeeze the balloon” in America regarding Rx prices, just be sure it pops out in France and other countries. I suspect it won’t and with Build Back Better stupidity on Rx, all we will get is more stupid, stupid, stupid mandated actions that shift costs to those not eligible for Medicare or Medicaid.
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“ To control spending, France sets maximum prices for new products that reflect the added value of the new drug compared with a comparator product.”
France doesn’t worry about developing new drugs… they have the US do it for them.
“For years, advocates for change have pointed out that drug companies set prices in the U.S. far above those in other countries in which they sell the same drugs. A study by the Rand Corporation this year comparing the U.S. with 32 other countries found that drugs cost on average 256% more in the U.S. “
Google: “American consumers are subsidizing the R&D for the world .”
Yes we are subsidizing the world. Wonder what happens to the world prices if we limit ours?
Actually, I’ve heard that for years, although “256% more” is news (if it’s true, that is.)
The irony, for me, is Americans “saving money” by buying prescriptions in Canada or Mexico… subsidized by those who buy them here?
I buy heartworm medicines for my dogs on line from Canada. Small savings, but no prescription required from Canada. Last time I tried to buy tablets from my vet, he required an exam, even though they recommend that ALL dogs be on regular heartworm meds. The exam cost more than the meds.*
* To be fair, (and accurate) he requires a test for heartworm, also extra cost, because heartworm meds are to –prevent– heartworms. If you give those meds to a dog who already has worms, it could be fatal. But mine have been on meds since Hector was a pup. Pun intended.
Solving the costs of meds is way above my pay grade. Some thoughts on Biden’s talk. The mention of negotiating a “fair price” and “health care should be a right…” means that he thinks bureaucrats can figure those things out. I say rubbish to that.
Some things that do puzzle me are why the blatant advertising of new prescription drugs was allowed to start with. Also why are drug prices so varied in one country over another. The US usually pays multiple times over what other countries pay. There are many other things about drug pricing that puzzle me but as I say it is beyond me to even make suggestions.
Trump has a plan… Healthcare for all. Lower drug prices, pre-existing conditions, etc.