WCCO Radio
By Taylor Rivera
U.S. Senator Amy Klobuchar joining U.S. Secretary of Health and Human Services Xavier Becerra to get the word out to Minnesota seniors about a big price drop for many of their prescription drugs.
This week marks the second anniversary of the Inflation Reduction Act that ultimately made the drop in prescription prices possible.
But Senator Klobuchar says there's still more work to do to keep up the fight against big drug companies.
"While we speak, the big drug companies are spending millions to try to stop us in our tracks, but they are losing," Klobuchar said Monday. "In fact, they have not won one of their challenges to this negotiation law. They are 0 to 7."
About nine million people with Medicare coverage take at least one of the 10 drugs impacted, and are poised to save $1.5 billion as a result of these new negotiated prices.
After months of negotiations with manufacturers, list prices will be reduced by hundreds — in some cases, thousands — of dollars for 30-day supplies of popular drugs used by millions of people on Medicare, including blood thinners, diabetes drugs and blood cancer medications. The reductions, which range between 38% and 79%, take effect in 2026.
“I’ve been waiting for this moment for a long long time,” President Joe Biden said earlier in August, during his first policy-oriented appearance with Vice President Kamala Harris since leaving the presidential race. “We pay more for prescription drugs, it’s not hyperbole, than any advanced nation in the world.”
Taxpayers spend more than $50 billion yearly on the 10 drugs, which include popular blood thinners Xarelto and Eliquis and diabetes drugs Jardiance and Januvia.
The new drug prices are likely to most benefit people who use one of the negotiated drugs and are enrolled in a Medicare plan with coinsurance that leaves enrollees to pay a percentage of a drug’s cost after they’ve met the deductible, said Tricia Neuman, an executive director at the health policy research nonprofit KFF.
“It is hard to say, exactly, what any enrollee will save because it depends on their particular plan and their coinsurance,” Neuman said. “But for the many people who are in the plans that charge coinsurance, the lower negotiated price should translate directly to lower out-of-pocket costs.”
Those savings won’t kick in until 2026. Until then, some Medicare enrollees should see relief from drug prices in a new rule starting next year that caps how much they pay annually on drugs to $2,000.
Powerful drug companies unsuccessfully tried to file lawsuits to stop the negotiations. For years, Medicare had been prohibited from such dealmaking. But the drug companies ended up engaging in the talks, and executives had hinted in recent weeks during earnings calls that they don’t expect the new Medicare drug prices to impact their bottom line.
Instead, they warned Thursday that the new law could drive up prices for consumers in other areas. Already, the White House is bracing for a jump in Medicare drug plan premiums next year, in part because of changes under the new law.
“The administration is using the IRA’s price-setting scheme to drive political headlines, but patients will be disappointed when they find out what it means for them,” said Steve Ubl, the president of the lobbying group Pharmaceutical Research and Manufacturers of America (PhRMA).
The criticism is ironic, health law expert Rachel Sachs of Washington University said. Drug companies have typically supported capping the price older Americans pay for drugs because they don’t eat the cost — insurers or Americans who pay premiums do.
“It makes it easier for patients to afford their medications. It expands their market. They make more money,” said Sachs, who helped advise the Biden administration on implementation of the law.
