Star Tribune

By Rochelle Olson

U.S. Sen. Amy Klobuchar on Monday praised a massive bill that for the first time will allow the government to negotiate drug prices for Medicare recipients, a measure that passed over fierce objections from drug manufacturers who say it will hurt consumers.

Klobuchar said she first introduced a bill to allow the government to negotiate Medicare drug prices a decade ago. Instead, as prices climbed, the government's been barred from leveraging the collective negotiating power of 64 million Medicare recipients with drug makers. Not for much longer.

"This was a hard-fought victory. It's not easy to put into words how big a deal it is," Klobuchar said with senior citizens, a University of Minnesota physician and AARP representatives standing behind her in Minneapolis. The Medicaid drug provision was part of the massive Inflation Reduction Act pushed by Democrats and President Joe Biden that also addressed climate change and deficit reduction.

The bill passed despite an intense lobbying push against it by drug manufacturers in Washington, D.C. Immediately after passage, Stephen Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), said the bill may feel like a win for Democrats, but it's "really a tragic loss for patients" based on a "litany of false promises."

Ubl denies that drug prices fuel inflation and said the bill gives government "unchecked authority to set the price of medicines." The bill will also harm innovation, leading to fewer new cures and treatments, he said, urging the House to reject the bill.

If the House passes the bill as expected on Friday, the Democrats will have pushed through one of the most sweeping changes to health care since the Affordable Care Act passed in 2010. The changes initially will been felt by seniors, potentially saving hundreds, even thousands of dollars annually. Medicare is the popular federally run health care program for the elderly, with eligibility generally starting at age 65.

"We're finally going to tell the pharmaceutical companies that they don't own Washington," Klobuchar said. Democrats have been pushing for the negotiating power since President Bill Clinton's attempted health care overhaul in 1993.

Initially, the government will negotiate prices on 10 of the most expensive drugs in Medicare. Klobuchar and her staff did not identify which drugs might be initially affected.

After that, another round of different drugs will be brought for negotiation by the government. By 2029, some of the most popular 60 drugs will be open to negotiation, she said.

Klobuchar said she wants the government to be able to negotiate prices for all drugs, and noted that the savings to consumers from this bill are estimated at more than $250 billion over a decade.

Klobuchar was joined by AARP Minnesota State Director Cathy McLeer, AARP member Ken McInnis of Ham Lake and Stephen Schondelmeyer, a professor at the University of Minnesota in pharmaceutical care and health systems.

McLeer called the bill's passage a "monumental improvement" with broad support among the state's 630,000 AARP members.

She highlighted the elimination of cost sharing for vaccines for Medicare recipients. The shingles shot, she noted, currently costs $350 out of pocket.

McGinnis said he has severe psoriasis and the cost of the drug he needs increased 245% in seven years. Last year, he said he paid $5,751 out of pocket. The Senate's bill caps annual out-of-pocket prescription drug costs at $2,000 for older adults.

Schondelmeyer noted that drugs to treat multiple sclerosis can cost between $80,000 and $120,000 a year, while cancer drugs can cost up to $300,000. He said forcing the drug companies to engage in a competitive market will compel them to be more accountable and transparent in their pricing.

"We have many wonderful drugs, but we have to be able to afford them," he said.

The bill also extended expiring subsidies that help 13 million people nationwide pay for health insurance.

In a statement, MNsure CEO Nate Clark praised the measure, saying at least 70,000 Minnesotans who buy insurance through the state market will see lower premiums next year because of the act. The legislation included a three-year extension of expanded financial assistance for those who buy insurance on their own instead of through their employers.

"These savings will put more money back in the pockets of working families and help thousands of Minnesotans maintain or access health coverage," he said.

Klobuchar also thanked fellow U.S Sen. Tina Smith, D-Minn., who was unable to attend the news conference because of a family matter.

Correction: An earlier version of this story incorrectly spelled the name of Cathy McLeer and misstated the number of the state’s AARP members, which is 630,000.