Julio Cortez / AP
The Democrats in Congress have taken a major, albeit greatly reduced, step to reduce the cost of prescription drugs for older Americans and reached a compromise after significant controversy on the matter.
The move is part of President Biden’s Build Back Better social spending plan, which the Democrats are still negotiating.
The agreement, announced on Tuesday, would allow Medicare Parts B and D to negotiate prices for certain drugs directly with drug manufacturers and limit self-spending for seniors at $ 2,000 per year, the first innovation of its kind in the history of the program.
“Prescription drug pricing is a major issue year after year for Americans, including the vast majority of Democrats and Republicans, who want to see a change because they just can’t afford their drugs,” said the Senate majority leader, Chuck Schumer, DN .Y., Said in a statement.
“We have heard this from people across the country who have serious illnesses and cannot afford their medication. What a troublesome situation. It is terrible.”
Schumer noted that many lawmakers wanted to go further, but still called the deal a “big step to help the American people”.
Under the existing rules, Medicare Part D applicants pay 5% of their total drug costs after reaching a certain threshold under the so-called “catastrophe clause” of the outpatient contract for prescription drugs. It should help patients with rising drug bills to avoid financial ruin.
The 2021 threshold is currently $ 6,500 for out-of-pocket drugs, a number health-care activists argue is too high and can still be harmful to low- and middle-income Americans for whom the program is designed is .
The White House praised the compromise in a statement on Tuesday evening, calling the ban on direct negotiations between Medicare and drug manufacturers an “unfair ban” hurting American seniors. The statement also welcomed a provision in the deal that would cap insulin prices for diabetics to $ 35 a month.
Reactions from attorneys to the news
AARP, which advocates for seniors and has called for new guidelines, welcomed the deal Tuesday and called on lawmakers to pass the law.
“It is a great win for seniors to finally enable Medicare to negotiate drug prices,” CEO Jo Ann Jenkins said in a statement. “If you keep prices from rising faster than inflation and Part D adds a hard cap out of pocket, it will be a real relief for seniors with the highest drug bills.”
The new proposal also provides a tax penalty for pharmaceutical companies that raise their prices above the national inflation rate.
PhRMA, which represents pharmaceutical companies, said the plan “threatens innovation”.
“Under the guise of ‘negotiation’, it gives government the power to determine how much a drug is worth and allows many patients a future with less access to drugs and fewer new treatments,” said President and CEO Stephen J. Ubl .
The original, larger iteration of the bill – passed twice by the US House of Representatives – was hampered in the Senate by a number of key Democrats, including Senator Bob Menendez of New Jersey, whose state is home to a number of drug companies, and most notably Senator Kyrsten Sinema Arizona.
Sinema, who remained silent from the media about their demands on the Democrats’ multi-trillion dollar budget plan, had publicly argued that the original price of $ 3.5 trillion was too high. Their opposition to a larger package has drawn considerable anger from the Democrats, who will need full cooperation within the party to move the proposal forward.
However, in a statement Tuesday, Sinema’s office said it was pleased that an agreement had been reached on drug prices.
“After Senator Sinema reached an earlier agreement with President Biden to include historic Medicare drug negotiations in the reconciliation package – guidelines that were removed from the original framework at the request of members of the US House of Representatives – Speaker Pelosi reached out to Senator last weekend Sinema to continue negotiations, “said John LaBombard, communications director of their office, in a statement.
“The Senator welcomes a new agreement on a historic, transformative Medicare drug negotiation plan that will lower the cost of ownership for seniors – to ensure drug prices don’t rise faster than inflation – save taxpayers and protect innovation to ensure that Arizonans and Americans.” continue to have access to life-saving drugs and new remedies and therapeutics. “
House spokeswoman Nancy Pelosi, with whom Sinema negotiated the issue, said she was “pleased” to have reached a compromise.
“For a generation, House Democrats have struggled to have real drug price negotiations that will bring costs down to our seniors,” Pelosi said in a statement.
“We are now finalizing the drafting of the law to reflect this important agreement. I am pleased with the compromise reached by the House of Representatives and Senator Sinema.”