The proposal to allow medical insurance to negotiate drug prices with pharmaceutical companies is intended to protect the industry’s ability to develop new drugs. Industry groups have long stated that such negotiations will stifle innovation in the production of new drugs.
The revised version of the large-scale infrastructure bill being drafted by Congress only allows negotiations on certain drugs after they lose exclusivity, and in any case may face more pricing pressure from competitors and generic drugs. At the same time, due to the prevalence of diabetes and the soaring cost of biopharmaceuticals for the treatment of chronic diseases, insulin is one of the most compelling products in the drug price debate and will not be negotiated. Instead, the legislation limits the price of insulin that patients pay per month to $35. In contrast, Diabetics currently pay hundreds of dollars a month for insulin.
The text of the bill is still being drafted.According to the White House announcement According to Tuesday’s agreement, the legislation will allow Medicare to negotiate the cost of Medicare Part D (including drugs obtained in pharmacies) and Medicare Part B (medicine administered in a doctor’s office) for drugs covered by Medicare.
The proposal does not cover all drugs, and Medicare also has a limit on the number of drugs that can be negotiated. Small molecule drugs are usually given in the form of pills and are eligible for negotiation only nine years after they are on the market. Macromolecular drugs are biological drugs that are injected or infused, and can be negotiated after 12 years on the market. The White House stated that Medicare will negotiate up to 10 drugs per year in 2023, and the negotiated prices will take effect in 2025. That year, the number of drugs that Medicare may negotiate will increase to 20 per year.
The White House stated in a statement that this new policy establishes a negotiation process and provides the greatest opportunity for savings on drugs that have been on the market for a long time.
The White House said: “This will prevent pharmaceutical companies from abusing the law to extend monopolies, and at the same time encourage investment in research and development of new therapies.” “Pharmaceutical companies that refuse to negotiate will owe excise taxes.”
The proposal also seems to end the ability of drugmakers to raise prices at will. According to the revised bill, if companies raise prices faster than the rate of inflation, they will face tax penalties. In addition, the bill caps the cost of drugs paid by the elderly and disabled under Medicare Part D to $2,000.
The Pharmaceutical Research and Manufacturers Association of America (PhRMA), a trade organization representing pharmaceutical companies, has long opposed efforts to allow Medicare to negotiate drug prices, believing that doing so would hinder the industry’s ability to conduct research and development, leading to new and innovative drugs. The group did not back down from that position.In a prepared statement, PhRMA President and CEO Stephen Uble added Although the organization welcomes changes in medical insurance to limit the out-of-pocket expenses of the elderly, the bill does not require sufficient insurance companies and pharmacy welfare managers, but instead frees them from the burden of reducing drug costs at the pharmacy counter.
“It threatens innovation and makes the broken healthcare system worse,” Ubl said.
The earlier version of the bill gave medical insurance more extensive power to negotiate drug prices. Among other things, these regulations have not received the support of conservative Democrats, including Senator Krysten Sinema of Arizona.exist statement After the deal was announced, Senate Majority Leader Chuck Schumer said that the film told him that she supported the agreement.
“This is not everything we all want,” Schumer said. “Many of us want to go further. But this is a big step in helping the American people deal with the problem of drug prices.”
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