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.”
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.