Congress should build on its victory in reducing prescription drug costs

Finally, after three decades of frustrated federal attempts, President Joe Biden and Congress bucked the lobbying of Big Pharma — and took sweeping action to bring millions of Americans significant relief from the chronically unreasonable cost of prescription drugs.

This fundamental first step comes in the major legislation signed by Biden last week that also invests nearly $400 billion in clean-energy subsidies and extends health care aid first provided during the COVID-19 pandemic.

That’s an accomplishment worth trumpeting regardless of where we are in the election cycle or who’s running. There was a clear popular consensus of support, which makes this measure a sign of government actually addressing a real problem.

The $2,000-per-year cap on out-of-pocket drug costs for seniors and others on Medicare offers the most tangible highlight. That takes effect in 2025. As is, enrollees have had to spend about $7,000 out of pocket on prescriptions before qualifying for what’s called catastrophic coverage.

For the first time, the Department of Health and Human Services can negotiate, from a strong position, the pharma prices charged to the Medicare program, which is expected by the most responsible estimates to trim $288 billion in program costs through 2031.

COMPROMISES WERE NECESSARY

Democrats rightly took a skeptical view of broad threats from the influential industry that this would tamp down research and development on new medicines. Yes, political compromises were necessary to get it done as a budget “reconciliation” measure — the only way it would achieve the votes needed to pass against monolithic Republican opposition.

Because of those strategic concessions, however, the scheduling and scope of the legislation figure to be understandably frustrating to many who supported it as the best of all possible deals.

Several of its significant benefits won’t take effect immediately. Instead, they’ll be phased in over the coming years. The first “negotiated” prices are due to affect 10 essential Medicare Part D drugs starting in 2026, followed by 15 more in 2027, another 15 in 2028, and 20 more in 2029.

To qualify for price negotiation — or restriction as some call it — a product will need to have been on the market for several years. Companies that raise prices faster than inflation, meanwhile, will need to pay a rebate to Medicare, and those that break the rules face fines.

All that will sound, to the ordinary citizen, well-plotted but also too gradual. These are seniors we are talking about, many of whom do not have the luxury of time to wait for this kind of help.

Just as unfortunately, the changes are written for 64 million Medicare enrollees but not the 150 million Americans on their employers’ commercial insurance. Sponsors of the bill wanted to give the same break to people enrolled in private insurance programs, but the Senate parliamentarian said doing so couldn’t qualify as a budget reconciliation. And presenting this as regular legislation would have required the votes of GOP members — who made it clear they would not cooperate, perhaps for fear of giving the Democrats a victory.

For now, analysts differ on whether the Medicare change could inspire lower costs for everyone else — or whether it will cause companies to hike costs where they can elsewhere and, if so, how much. Nobody can predict for sure how the industry, with its high marketing costs, will respond. Whatever their play, however, the government should not return to going passive on Big Pharma pricing. It should find ways to protect everyone. Americans shouldn’t pay more than people in other relatively high-income nations, yet we do.

ACTION ON INSULIN

Insulin has been the featured product in public calls for help and sanity in drug pricing. Diabetics need it to survive — and past gouging for it became a national disgrace. That’s why eight states have insulin regulations of their own. This includes New York where, effective last year, the price was capped at $100 for a 30-day supply for those in state-regulated commercial health plans.

Starting next year, the new law will limit to $35 a month the cost of insulin for Medicare recipients. The American Diabetes Association reports that about 8.4 million Americans depend on insulin these days.

The bill also extends the expanded pandemic-time subsidies of insurance policies provided under the 12-year-old Affordable Care Act, which the Biden administration estimates have been saving 13 million people an average of $800 a year.

Hailing the signing as a historic breakthrough, AARP chief executive Jo Ann Jenkins said, “We’ll keep advocating for additional measures to bring down the price of prescription drugs . . . Our fight isn’t over.”

The challenge, and the way forward for policymakers, is fairly clear: Expand on the progress now established for those enrolled in Medicare by finding a way to negotiate prices for other insurance clients.

In the meantime, perhaps the schedule for implementing these desirable changes can somehow be accelerated. After all, Medicare itself was established the year after President Lyndon Johnson called on Congress to create it. It’s a good effort so far — on at least one side of the aisle — but haven’t the people been waiting long enough?