The Inflation Reduction Act of 2022 (IRA P.L. 117-169),which was signed into law on August 16, 2022, expands Medicare benefits by lowering drug costs. The Act empowers The Centers for Medicare & Medicaid Services (CMS) to select initially 10 single source drugs without generic or biosimilar competition, in 2024, an additional 15 drugs in 2025 and annually, thereafter to negotiate the price of additional high expenditure drugs The IRA mandates that CMS negotiate the prices of these high expenditure drugs with the manufacturers. These are drugs that senior citizens particularly, rely on. They include those used for treating diabetes, heart disease and cancer. Once the new, lower prices take effect in 2026, all Medicare enrollees are expected to save an estimated $1.5 billion dollars. Additionally, everyone enrolled in Medicare prescription drug coverage will have their out-of-pocket costs capped at $2,000 beginning in 2025.
The concern about high drug prices arose among people who had to take insulin. It has been an ongoing discussion for a long time. That is because an individual with Type I diabetes paid $9 per vial in 1972; $33 per vial in 1996 and $275 in 2017. Most people need one shot of long-acting insulin per day, but some may require up to four shots per day, at a cost of $1,100 per day. It does not take much effort to understand how few people can afford these prices. The changes, outlined, will improve drug affordability for people with diabetes, by capping out-of-pocket spending for insulin at $35 per one month’s supply of each insulin product covered under a Medicare Part D plan, with similar limits for out-of-pocket costs for insulin supplied under Part B.
On another front, to control the high price of drugs in the U.S. the FTC (Federal Trade Commission) is moving forward with an agenda that will also help to reduce drug costs for the patient. They are suing middlemen – called Pharmacy Benefit Managers – who for years, have had a reputation of pocketing discounts they negotiate on behalf of the consumer with the Pharma companies. The PBMs work for and are beholden to the largest drug selling chains including Cigna Group’s Express Scripts. United Health Group’s Optum Rx, and CS Health’s Caremark They claim that they have achieved deep discounts, “as a result of their negotiations with Pharma so that the people will pay less.” They blame the manufacturers of insulin: Eli Lilly, Novo Nordisk, and Sanofi for the high prices assessed to many patients. The drugmakers contend that they are providing discounts and the PBMs were not passing those along to the healthcare consumer. In reality, Caremark, Express Scripts, Optum, and their affiliates created a broken rebate system that inflated insulin drug prices, boosting PBM profits at the expense of vulnerable patients.
Regulations that help encourage Pharma to continue to research new drugs, innovate and produce solutions for desperate health conditions are essential. Just as critical, however, are fair prices to the American public which cannot continue to assume higher costs for the same drug compared with our counterparts around the world, simply because we have allowed the system to work against the patient. That is just counterproductive for the nation and an undemocratic way to treat our citizens.
Insulin is just one, blatant example of drug price manipulation and how the supply chain is broken and without proper oversight. With the enactment of The Inflation Reduction Act, Medicare will be allowed to negotiate directly with drug companies, cap prices and improve access for the healthcare consumer for some of the costliest single-source brand-names. Currently, Americans have been paying three to eight times more than their counterparts in other countries for the exact same drug. That situation exists because most other developed nations have national health systems that negotiate the prices of all drugs they approve. The fight to lower drug costs here has just begun! ies. The PBMs work for and are beholden to the largest drug selling chains including Cigna Group’s Express Scripts. United Health Group’s Optum Rx, and CS Health’s Caremark They claim that they have achieved deep discounts, “as a result of their negotiations with Pharma so that the people will pay less.” They blame the manufacturers of insulin: Eli Lilly, Novo Nordisk, and Sanofi for the high prices assessed to many patients. The drugmakers contend that they are providing discounts and the PBMs were not passing those along to the healthcare consumer. In reality, Caremark, Express Scripts, Optum, and their affiliates created a broken rebate system that inflated insulin drug prices, boosting PBM profits at the expense of vulnerable patients.
Regulations that help encourage Pharma to continue to research new drugs, innovate and produce solutions for desperate health conditions are essential. Just as critical, however, are fair prices to the American public which cannot continue to assume higher costs for the same drug compared with our counterparts around the world, simply because we have allowed the system to work against the patient. That is just counterproductive for the nation and an undemocratic way to treat our citizens.
Insulin is just one, blatant example of drug price manipulation and how the supply chain is broken and without proper oversight. With the enactment of The Inflation Reduction Act, Medicare will be allowed to negotiate directly with drug companies, cap prices and improve access for the healthcare consumer for some of the costliest single-source brand-names. Currently, Americans have been paying three to eight times more than their counterparts in other countries for the exact same drug. That situation exists because most other developed nations have national health systems that negotiate the prices of all drugs they approve. The fight to lower drug costs here has just begun!