Sunday, December 5, 2021

Why do American consumers pay such a high price for prescription drugs?

Congressional Democrats this week proposed adding to US President Joe Biden’s climate and social spending law that would allow Medicare, the federal government’s health care program for older Americans, to negotiate with drugmakers over the cost of certain prescription drugs. will allow.

American consumers pay higher prices for prescription drugs than almost any of their peers in the developed world, a fact that generations of politicians and advocates have fought in vain to change. If passed, the resolution working through Congress would make a dent, though relatively small, in a long-standing problem.

The plan being discussed would give Medicare officials the ability to negotiate the pricing of thousands of drugs on the market in the United States, starting with about 10 drugs and capped at 20. Liberal members of Congress had previously expected to grant grants. The Medicare Authority will negotiate the prices of up to 250 expensive drugs each year.

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Although small, the number of drugs covered by the offer represents a disproportionate amount of annual “spending” on drugs by Medicare patients.

A Kaiser Family Foundation study released this year determined that the 10 best-selling drugs covered under Medicare Part D accounted for 16% of total spending in 2019. Top 50 medicines – represent just 8.5% of all medicines covered under the programme. – 80% of the expenses.

The top 10 drugs according to the Kaiser Family Foundation include “three cancer drugs, four diabetes medications, two anticoagulants, and one rheumatoid arthritis treatment.”

confusing system

Unlike many countries outside the US, where the government has been able to negotiate drug prices and reduce the cost of a single national health care system, the landscape in the US is highly fragmented. Most Americans with health insurance are covered by policies issued by for-profit companies in the private sector.

FILE – Retired Donna Weiner, pictured October 5, 2021, in her Longwood, Fla., home, displays the daily prescription drugs she needs; It costs them more than $6,000 per year through a Medicare Prescription Drug Plan. Weiner supports giving Medicare the right to negotiate drug prices.

Americans age 65 and older are eligible for Medicare, which replaces a private insurer, but with some important differences. For many years, Medicare did not offer prescription drug coverage, forcing Medicare patients to pay out-of-pocket for drugs or seek third-party insurance coverage for their drugs.

In 2003, Congress created Medicare Part D, whereby private insurers offered drug coverage that met minimum requirements established by the federal government. While that program reduced costs for many seniors, cost-sharing provisions and design flaws meant that many recipients continued to face financially crippling bills for the drug. One major reason is that each insurance provider must negotiate prices with drug companies individually, rather than using the bargaining power of the entire Medicare population to emphasize lower costs.

‘R&D subsidy to the world’

Over the years, advocates of change have pointed out that drug companies set much higher prices in the US than in other countries where they sell similar drugs. A study conducted by the RAND Corporation this year, comparing the US with 32 other countries, found that drugs cost an average of 256% more in the US

“American consumers are subsidizing R&D for the world,” said Lovisa Gustafson, vice president of the Controlling Health Care Cost Program at the Commonwealth Fund, a think tank in Washington DC.

The problem is that Americans also bear a substantial portion of the cost for their prescription drugs.

“Patients in the US face far greater cost-sharing than in many other countries. Therefore, just because they have insurance does not mean that patients can actually buy the drugs they currently need. needed,” Gustafsson said. “Survey after survey shows that 20% to 25% of Americans can’t tolerate their prescription drugs, or can’t split pills, or fill prescriptions, because they can’t tolerate it.” And that too when they have insurance.”

Sen. Kirsten walks into the chamber after the Senate Democratic Caucus meeting at the Capitol in Cinema, D-Ariz., Washington, November 2, 2021.  CINEMA, a key holdout on President Joe Biden's social agenda, reached a deal with a Senate majority.  Leader Chuck Schumer outlined a plan to lower the cost of drugs for older people, the cost of out-of-pocket Medicare to $2,000, and the cost of insulin.

Sen. Kirsten walks into the chamber after the Senate Democratic Caucus meeting at the Capitol in Cinema, D-Ariz., Washington, November 2, 2021. CINEMA, a key holdout on President Joe Biden’s social agenda, reached a deal with a Senate majority. Leader Chuck Schumer outlined a plan to lower the cost of drugs for older people, the cost of out-of-pocket Medicare to $2,000, and the cost of insulin.

cap on cost

A key element of the proposal before Congress is that it would impose an annual cap of $2,000 on co-payments that can be taken from Medicare patients for their medications.

The prospect of a cap on out-of-pocket costs was well received by many calls for reforms, such as the AARP, a large advocacy group for older Americans.

“There is no greater issue on Medicare than the rising cost of drugs affecting senior citizens’ pocketbooks,” AARP CEO Joe Ann Jenkins said in a statement. “For decades, seniors have been at the mercy of Big Pharma. Allowing Medicare to finally negotiate drug prices is a big win for senior citizens. Preventing prices from rising faster than inflation and adding a heavy out-of-pocket cap in Part D will provide real relief for senior citizens with the highest drug costs.

pharmaceutical companies unhappy

PhRMA, a powerful trade group representing the pharmaceutical industry, reacted unhappy to news of the proposal.

PhRMA President and CEO Stephen J. “If passed, it will create the same innovative ecosystem that has brought us life-saving vaccines and treatments to combat COVID-19,” Ubal said in a statement. “Under the guise of ‘negotiation’, it gives the government the power to determine how much a drug costs and many patients face a future with less access to drugs and fewer new treatments.”

FILE - Stephen Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America, speaks during a news conference in Trenton, NJ, Sept. 18, 2017.

FILE – Stephen Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America, speaks during a news conference in Trenton, NJ, Sept. 18, 2017.

“While we’re pleased to see changes in Medicare, which allow seniors to pay out-of-pocket for prescription drugs, the proposal can keep middlemen like insurers and pharmacies off the hook when it comes to lowering costs for patients at the pharmacy counter.” Gives profit,” UBL continued. “It threatens innovation and makes a broken health care system worse.”

Industry claims exaggerated?

The claims of many proponents of allowing the government to negotiate drug prices that the industry insists it will stifle innovation is exaggerated.

They point to evidence from a study released by the Congressional Budget Office in August. The CBO created a model in which pharmaceutical companies faced the following scenario: Created a policy that reduces returns on their most profitable drugs from 15% to 25%.

The agency estimated that the effect would be a reduction in the number of new drugs coming to market in the first 10 years of the new policy by only a half of 1%. This would add up to an 8% reduction over the first three decades of the program.

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This article is republished from – Voa News – Read the – original article.

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