Last week the Democratic majorities in Congress reached an agreement on new measures to begin reducing prescription drug prices. These are not as far-reaching as those proposed previously but they still are major steps forward in beginning to control drug prices.
The agreement would for the first time allow Medicare to negotiate lower prices on some drugs. But the negotiation provision was scaled back to only apply to older drugs that are no longer on their period of “exclusivity,” when they are protected from competition. That translates to nine years for many drugs and 12 years for more complex biologics.
The reporting on the agreement appears to have some discrepancies, but apparently after identifying 100 of the most expensive drugs, ten of them would be subject to negotiation starting in 2023 with the negotiated prices going into effect in 2025, and with up to 20 drugs under negotiation starting in 2028.
For seniors on Medicare, the agreement includes a new cap of $2,000 on out-of-pocket drug spending, which could save money for those who take expensive medications.
The measure would also limit drug price increases to the rate of inflation and limit the price of insulin to $35 a dose.
Eventually, Medicare will likely be able to negotiate the prices of a lot more than just 20 drugs.
That means there's no limit on the number of drugs that can be negotiated over time. Which drugs are eligible, however, is still much more restricted than the original House drug pricing proposal was.
According to Senate Finance Committee Chairman Ron Wyden (D-Ore.), “There’s going to be negotiation on the most expensive drugs: cancer drugs, arthritis drugs or the anticoagulants. And that’s a precedent, and once you set a precedent that you can actually negotiate, you are really turning an important corner.”
Although this does not do all that we had hoped for, TSCL is pleased that the agreement has been reached and we are urging members to pass the legislation as soon as possible.