What’s more important to Americans on Medicare: an abstract commitment to capitalism or real savings on prescription drugs?
Based on 2020 data, the U.S. Department of Health and Human Services figures South Dakotans on Medicare who use insulin can save an average of $725 a year thanks to the $35 cap on out-of-pocket costs enacted in President Joe Biden’s Inflation Reduction Act last year. (Only North Dakotans see higher savings from that price cap, an average of $805; the national average savings are $501.)
The Biden Administration now wants to bring similar savings to Medicare recipients on ten other prescription drugs slated for the first round of price negotiation authorized under the Inflation Reduction Act:
For the first time ever, HHS announced ten drugs selected for Medicare drug price negotiation:
Drug Name Commonly Treated Conditions Total Part D Gross Covered Prescription Drug Costs from June 2022-May 2023 Number of Medicare Part D Enrollees Who Used the Drug from June 2022-May 2023 Average Part D Covered Prescription Drug Costs Per Enrollee Eliquis Prevention and treatment of blood clots $16,482,621,000 3,706,000 $4,448 Jardiance Diabetes; Heart failure $7,057,707,000 1,573,000 $4,487 Xarelto Prevention and treatment of blood clots; Reduction of risk for patients with coronary or peripheral artery disease $6,031,393,000 1,337,000 $4,511 Januvia Diabetes $4,087,081,000 869,000 $4,703 Farxiga Diabetes; Heart failure; Chronic kidney disease $3,268,329,000 799,000 $4,091 Entresto Heart failure $2,884,877,000 587,000 $4,915 Enbrel Rheumatoid arthritis; Psoriasis; Psoriatic arthritis $2,791,105,000 48,000 $58,148 Imbruvica Blood cancers $2,663,560,000 20,000 $133,178 Stelara Psoriasis; Psoriatic arthritis; Crohn’s disease; Ulcerative colitis $2,638,929,000 $12,000 $119,951 Fiasp; Fiasp FlexTouch; Fiasp PenFill;
NovoLog; NovoLog FlexPen; NovoLog PenFill
Diabetes $2,576,586,000 777,000 $3,316
These ten drugs are among those with highest total spending in Medicare Part D. Millions of Part D enrollees depend on these vital treatments to treat life-threatening conditions including diabetes, heart failure, and cancer, but many struggle to access their medications because of prohibitive costs.
Medicare drug price negotiation will result in lower out-of-pocket costs for seniors and will save money for American taxpayers. Negotiations for the first group of selected drugs will begin in 2023, with negotiated prices going into effect in 2026 [The White House, “Fact Sheet: Biden-Harris Administration Announces First Ten Drugs Selected for Medicare Price Negotiation,” 2023.08.29].
South Dakota has a few thousand Medicare enrollees using these drugs, with average annual out-of-pocket costs ranging from $195 for NovoLog and the other diabetes prescriptions to $6,312 for blood-cancer drug Imbruvica. As with insulin, South Dakota Medicare enrollees pay some of the highest out-of-pocket costs in the nation for these drugs.
So tell me what harms arise from helping sick senior citizens pay for their medicine by the federal government’s dickering for lower prices? Will drug companies lose investors and have less money and desire to research new drugs? Does the prospect of incalculable deceleration of pharma-scientific progress outweigh the measurable practical benefit of savings for Medicare recipients?