President Biden just signed into law an “infrastructure” package that delays a Trump-era drug pricing reform designed to save Medicare beneficiaries tens of billions of dollars at the pharmacy. And now, congressional Democrats are pressing forward with an even larger “reconciliation” bill that will likely limit seniors’ access to cutting-edge medicines.
In short, Democrats are gutting Medicare and curtailing older Americans’ access to lifesaving prescriptions to fund a wish list of new initiatives, like more electric vehicle charging stations. That’s disgraceful.
Arizona’s 1.3 million Medicare beneficiaries deserve better.
There’s little doubt that drug pricing reforms are urgently needed. Many older Americans, especially those on fixed incomes, struggle to pay for their prescriptions. And in Arizona, seniors make up 18% of the population – one of the largest shares in the nation. On average, they spend more than twice as much out-of-pocket on prescriptions than younger adults. Costs are so high that an estimated 26% of Arizonans skipped doses or stopped taking medication entirely in 2017.
Given how widespread this problem is, it’s no surprise that a Gallup poll in June shows that three in four seniors want lawmakers to take action on drug prices. One would expect Democrats to devote at least some of their massive spending proposals to cutting pharmacy costs for patients, and particularly for seniors. But, no. Instead, they’ve done the opposite.
Democrats have delayed a Trump-era reform aimed specifically at reducing seniors’ out-of-pocket drug costs. The policy concerns the generous rebates and discounts that insurance companies secure when negotiating with drug firms. Those price cuts totaled $187 billion in 2020 alone.
Yet most of those discounts get pocketed by insurers and middlemen companies known as pharmacy benefit managers. The discounts aren’t used to lower what patients pay out-of-pocket.
Trump’s rebate rule tried to do something about this perverse arrangement. Under his reform, rebates would only be permitted in the Medicare Part D drug benefit if insurers shared those savings directly with seniors at the pharmacy counter. That policy was a huge victory for seniors. But earlier this year, the Biden administration delayed implementation of the rule until 2023. And now Democrats have delayed it even further. Their reason? To free up $50 billion for their own infrastructure plan. That’s right: Democrats scrapped an initiative that would make it vastly easier for seniors to afford their medications. And they did it to pay for electric vehicle giveaways and other liberal goals.
It doesn’t end there. Democrats want to slash federal prescription spending by allowing the government to set drug prices. The plan would do little to impact what seniors pay at the pharmacy counter. Since insurers and other middlemen would still get to dictate how much seniors pay via copays and co-insurance, most of the “savings” from this bill would accrue to the government. It’s a multi-billion-dollar transfer from the life sciences industry to the federal government to pay for Democratic policy goals.
And since price controls will dissuade investors from backing early-stage life-science research, we’ll undoubtedly have fewer new life-enhancing and life-saving new medicines in the years ahead.
Expensive pharmacy bills are a real burden, in Arizona and across the country. Reforms to address this challenge abound, from forcing middlemen to share the savings to capping out-of-pocket costs.
It’s unfortunate that for Democrats, prescription drug reform isn’t about making medicines more accessible. It’s simply about financing ambitious progressive priorities – and sticking seniors with the bill.
Saul Anuzis is president of 60 Plus, American Association of Senior Citizens.