December 15, 2021 at 5:00 am ET
The Democrats’ Build Back Better Act includes historic reforms that, if enacted into law, would be the first-of-their-kind that stand up to Big Pharma, restructure drug price policy in America and provide long-overdue relief to Americans who struggle to afford essential medicines.
Full disclosure: I have a dog in this fight. I have incurable blood cancer, and the four drugs keeping me alive carry a list price of $900,000 per year. As a Medicare beneficiary, just one of those costs me more than $15,000 out of pocket annually.
If we succeed in passing the current version of the Build Back Better Act in the full Congress and get it to the president’s desk for his signature, it will make a meaningful difference in my life, the lives of millions of patients, and virtually every American. Here’s a breakdown of what the legislation will do:
Starting in 2023, we will curb year-over-year price gouging by making brand-name drug corporations pay penalties if they raise prices faster than the rate of inflation. This price increase cap will protect Americans in both Medicare and commercial insurance plans. Copayments for insulin will be limited to $35 a month for all Medicare Part D beneficiaries and in most commercial plans as well.
In 2024, everyone on Medicare Part D will be protected from crushing out-of-pocket drug costs by imposing an annual limit of $2,000. Right now, there is no annual out-of-pocket maximum in the Medicare retail drug benefit, and people can end up paying more than $15,000 a year if they need an expensive drug to manage acute or chronic diseases. A redesign of the program will incentivize drug plan operators to negotiate more aggressively with drugmakers for lower prices on behalf of Part D beneficiaries. Additionally, Medicare beneficiaries will no longer pay cost-sharing on any recommended vaccines.
In 2025, for the first time ever, negotiated prices will begin to take effect under Medicare for some of the most expensive drugs. Negotiations will focus on older drugs without competition. The first year will include 10 drugs. Lower negotiated prices will save money directly and help hold the line on premiums and out-of-pocket costs for people on Medicare. Negotiated prices will also be made public, so employers and insurers can use them as leverage to get a better deal in the private sector.
Also in 2025, Medicare plans must offer enrollees the option of “smoothing” monthly out-of-pocket payments. Right now, the payment for the first month of the year can be brutal for people taking expensive drugs; my first payment last year was almost $3,300. Instead, beneficiaries will be able to spread their out of pocket cost — limited now to no more than $2,000 — more equally over the year to make these expenses more affordable and predictable.
Big Pharma — with two lobbyists for every member of Congress — is seeking to weaken this legislation.
The industry claims Medicare negotiation would reduce access to medicines, but the biggest barrier to patient access is high drug prices. The reforms in the Build Back Better Act would lower prices, making prescription medications more accessible.
Big Pharma claims negotiation will halt innovation, but the plan would actually reward innovation the same way we do now by allowing drug companies to set prices on new drugs and enjoy a period of market exclusivity to recoup their investment and profit from the development of a new drug. Any fearmongering you hear from Big Pharma about innovation under this legislation is inaccurate.
Together, these provisions fundamentally reform our system to make it work better for those it is intended to serve — patients and all Americans. The Senate must follow the House’s lead and resist efforts by Big Pharma to weaken the bill in any way and swiftly pass it intact. Millions of American lives depend on it.
David Mitchell is a cancer patient and founder of Patients For Affordable Drugs Now, the only national, bipartisan patient organization focused solely on policies to lower drug prices.
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