Medicare Beneficiaries Experience Significant Savings on Prescription Drugs
Last year, David Mitchell, a multiple myeloma patient, spent a staggering $16,525 on 12 bottles of Pomalyst, a medication vital to his treatment. Frustrated by the skyrocketing costs of his drugs, Mitchell founded Patients for Affordable Drugs in 2016 and successfully advocated for drug price reforms to be included in the 2022 Inflation Reduction Act.
Now, as these changes take effect, Mitchell is reaping the benefits. In January, he only had to pay $3,308 for a Pomalyst refill, saving over $13,000 for the year. This payment cap is set to be “truly life-changing” for hundreds of thousands of other Medicare patients, according to Mitchell.
Biden’s Battle Against High Drug Prices
President Joe Biden has made the fight against high drug prices a priority, and the Inflation Reduction Act is a significant step towards achieving this goal. The law, which represents the most significant overhaul of the U.S. drug marketplace in decades, aims to provide immediate relief to Medicare patients and impose government controls on pharmaceutical pricing.
To ensure that voters are aware of his efforts, the White House has launched a campaign targeting seniors. Biden declared, “The days where Americans pay two to three times what they pay for prescription drugs in other countries are ending.”
However, polling indicates that awareness of the IRA’s provisions on drug prices is still relatively low. Only a quarter of adults were aware of these provisions nearly a year after the law was signed. Biden’s estimate of drug price inflation is also conservative, as patients in the U.S. often pay more than 10 times the prices in other countries.
Impact on Medicare Patients
Beyond the payment cap, the IRA also includes provisions such as free vaccines, $35-a-month insulin, and federal subsidies for those earning up to 150% of the federal poverty level. Additionally, drugmakers will be required to pay government rebates for medicines with prices rising faster than inflation.
The most controversial provision of the law allows Medicare to negotiate prices for certain expensive drugs that have been on the market for at least nine years. This provision aims to weaken the drug industry’s hold on pricing.
The Centers for Medicare & Medicaid Services has already sent opening bids to pharmaceutical manufacturers for the first 10 drugs selected for negotiation. However, these negotiations face legal challenges from drug companies filing lawsuits to prevent them. The Congressional Budget Office predicts that the IRA’s drug pricing elements will save the federal government $237 billion over 10 years but may reduce the number of drugs entering the market.
Overall, the IRA represents a significant effort by the Biden administration to control drug prices and provide relief to Medicare patients. The impact of these reforms on the pharmaceutical industry and privately insured Americans remains uncertain, but the restructuring of Medicare Part D has already resulted in lower costs for many patients. While the industry is fighting against the IRA, the Part D portion of the law may boost sales by making medications more affordable for Medicare patients.
Hope for Medicare Patients
For Medicare patients like Lynn Scarfuto, the IRA is a source of relief. Scarfuto, who paid $1,157 for drugs last year, will now pay nothing for her medications covered by the IRA. She hopes that the negotiations will continue, adding more drugs each year to benefit Medicare patients.
David Mitchell and his organization, Patients for Affordable Drugs, have played a crucial role in advocating for these reforms. Supported by grants from Arnold Ventures, a philanthropy focused on health care policies, Mitchell and his team have given a voice to angry patients who demand change.
While the future of these reforms depends on court decisions and elections, the IRA represents a significant step towards affordable prescription drugs for Medicare patients.