March 7, 2023 07:21 AM EST FDA+Law
Zachary Brennan
Senior Editor
The White House put out word this morning that as part of its campaign to keep the Medicare program for seniors solvent, its newly formed drug price negotiations should be extended to even more drugs and take effect more quickly.
Building on the Inflation Reduction Act, which gave Medicare the authority to negotiate prices for a select number of high-cost drugs (building up to 60 by 2029), President Joe Biden said in a statement that his budget
strengthens this newly-established negotiation power by allowing Medicare to negotiate prices for more drugs and bringing drugs into negotiation sooner after they launch. It also strengthens the IRA requirement that drug companies pay rebates to Medicare when they increase prices faster than inflation by extending this rule to commercial health insurance. The Budget credits the savings from these additional prescription drug reforms, amounting to $200 billion over 10 years, to the HI Trust Fund.
The move is part of Biden’s attempt to extend the life of the Medicare Trust Fund by at least 25 years. In the latest 2022 Medicare Trustees report, the projection is that the trust fund could run out in 2028, which the Kaiser Family Foundation notes is actually a “modest improvement from the projection in the 2021 Medicare Trustees report, when the depletion date was projected to be 2026.”
KFF also notes that the CBO recently projected the trust fund would be depleted by 2030.
What’s unclear at the moment is how many drugs Biden wants to add to the IRA, and how much more money needs to be ushered over to CMS to implement this plan. The IRA appropriates $3 billion for implementing the drug price negotiation provisions over the 2023-2031 period, according to KFF.
In addition to price negotiations, the White House plan also calls for two other IRA-plus adjustments, including lower out-of-pocket costs for drugs subject to negotiation.
“By reducing prices for high-cost drugs, the Budget’s expansion of Medicare drug negotiations will not only save money for the federal government, it will also cut beneficiary’s out-of-pocket costs by billions of dollars,” the White House said.
Biden further calls for $2 cost-sharing for generic drugs for chronic conditions. “The Budget proposes capping Part D cost-sharing on certain generic drugs, such as those used to treat chronic conditions like hypertension and high cholesterol, to $2 per prescription per month,” the statement said.
Leave a Reply