By Kaitlyn Pirie
If you’re like many Americans, you’ve spent a pretty penny on medications—in fact, research shows we spend more than $1,000 per person on prescription medicines annually. Unfortunately, “drug prices in the US are 250% more expensive than in 32 other countries and nearly 20% of older adults have reported not taking their medicines as prescribed because of the cost,” says United States Senator Amy Klobuchar (D-MN).
Klobuchar and some other elected officials are trying to change how much consumers are spending, starting with seniors: After all, 88.5% of Americans age 65 and older have taken a prescription drug in the last 30 days—and 66.4% have taken three or more in that same time frame, according to the latest data from the CDC.
So how do drug prices work, and what might change? Klobuchar sat down with Prevention to discuss.
Within our current system, insurance companies, large employers, and the Department of Veterans Affairs are allowed to negotiate the prices they pay pharmaceutical companies for prescription medications. However, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 doesn’t allow the U.S. government to negotiate prescription prices for Medicare enrollees.
“There’s 46 million seniors who as a group are banned from negotiating drug prices under Medicare,” says Klobuchar. (That’s the number of people who are enrolled in a Part D prescription drug Medicare plan, according to research conducted by the Kaiser Family Foundation.) “The VA can negotiate for veterans, but the seniors can't negotiate or the government can’t negotiate on their behalf,” adds Klobuchar. “That was something that the pharmaceutical companies lobbied to get into the law.”
Klobuchar believes that giving Medicare the power to negotiate drug prices will not only lower out-of-pocket costs for people aged 65 and older, but will have a positive ripple effect for other populations as well. “Once the price goes down for seniors, other insurance companies and the like are then going to demand the better prices as well,” she says. On top of that, estimates show it could save the government more than $500 billion over the course of ten years.
What’s being done in Congress
To allow for this negotiation to happen, members of Congress have introduced several pieces of legislation (including the Empowering Medicare Seniors to Negotiate Drug Prices Act spearheaded by Klobuchar) to the Senate and the House of Representatives. Nothing has been signed into law yet, but President Biden urged Congress to include a provision that allows Medicare to negotiate prescription prices in the $3.5 trillion social policy bill being debated right now.
Some critics say that with less of a monetary incentive, innovation by U.S. pharmaceutical companies could be stunted, but Klobuchar disagrees. “Drugs are developed all over the world and these countries still have much less expensive drug prices—and our American companies are selling drugs all over the world,” says Klobuchar. “So I just don’t buy that—that this will stunt their innovation or growth. They’re competitors. They’re going to innovate. They’re going to meet market demands.” Plus, Klobuchar points out that money from taxpayers has been used to develop advancements in medicine (like the COVID-19 vaccines, for example) so private pharmaceutical companies aren’t entirely on their own.
How you can take action
Until new legislation passes, the best thing you can do is make sure you know the details of your own prescription drug coverage and if you support the change in the law, reach out to your elected representatives to tell them this issue is important to you. “Be your own advocate by calling members of Congress to get this done because the moment is now,” says Klobuchar.