High prescription drug prices are affecting millions of Americans. The House of Representatives passed the drug-pricing measure as part of its big tax-and-spending bill, which may seem unimpressive, according to Bloomberg.
The measure is a reflection of compromised ambitions, which would initially let Medicare negotiate the cost of only 10 expensive prescription drugs. It may save Medicare about $80 billion over the period of 10 years, less than 20% of what was once envisioned.
However, this measure would still be a game-changer. The government’s prohibition of any negotiation by Medicare has kept drug prices among the highest compared to other nations.
The Part D prescription-drug program was launched in 2003 and since then, it ruled out negotiation over prices. Private insurance companies could strike deals with drugmakers, but Medicare could not use its enormous leverage to hold prices down.
The pharma industry says unless drug companies are allowed to charge whatever the market will bear, they will be discouraged from discovering new medicines, per the news outlet.
In fact, big pharma companies rarely create new drugs, according to recent research.
Bloomberg says, “The Congressional Budget Office estimates that the House drug-price legislation would cause one fewer drug to come on the market in the next decade — and nine fewer over the subsequent 20 years. That’s a loss, but it needs to be weighed against the costs of the current approach. There’s no point in bringing new drugs to market if no one can afford them.”
When compared with Europe and Canada, Americans are charged five to six times for prescription drugs.
A recent Kaiser Family Foundation poll found that more than 80% of Americans say they favor Medicare drug negotiation.
Public outcry over drug prices led former president Donald Trump to suggest that the U.S. benchmark its prices to those in Europe, Japan, and Canada.
However, the measure sets many limits on Medicare negotiation.
The secretary of Health and Human Services (HHS) would create a list of expensive drugs that have no generic versions and that have been on the market for at least nine years. And from that list, the secretary would choose 10 drugs for negotiation in 2025.
Drug price negotiation would introduce an important form of cost control in uncompetitive corners of the prescription-drug market, according to Bloomberg. The drug-price measure will be among its most significant achievements if the bill survives a Senate vote and is signed into law.
