Members of Congress continue to push a misguided drug pricing proposal under the guise of negotiation as part of the reconciliation package. This proposal is nothing short of government price setting and, if implemented, would require the government to dictate prices and choose winners and losers when it comes to which diseases are likely to see new treatments. Instead of addressing a broken insurance system, the most recent proposal doubles down on bad policies that will threaten patient access to medicines and future innovations. This is the first blog in a three-part series where we discuss the very real threats of the proposal.
The latest Senate reconciliation package undermines:
- Access to medicines
- Innovation for lifesaving medicines
- The health care system
The threat to access.
- This policy threatens patient access to future medical advances. The drug price-setting provisions in the reconciliation package are projected to cause an immediate decline in research and development (R&D) spending, resulting in fewer new medicines coming to the market in the future. By some estimates, proposals in the reconciliation package could sacrifice more than 100 new treatments over the next two decades. This shouldn’t be a surprise to anyone. History shows that when foreign governments have set the price of medicines, R&D investment and innovation have greatly declined because governments choose which diseases are worth investing in and which are not. When you consider that there are hundreds of medicines in development today for unmet needs like Alzheimer’s and childhood diabetes, you’re left wondering: Which diseases will be left untreated if this bill passes?
- This policy jeopardizes access to today’s medicines for Medicare Part B patients. The latest drug pricing plan would change how doctors who administer Part B medicines are paid. Under the new system, if implemented, doctors would be reimbursed based on the much lower government-set price instead of the market-based price used today. Sounds simple but it isn’t just a small change, it’s an average reduction of nearly 40%. That could be the difference for some doctors of whether they can afford to administer certain medicines or not. And for rural providers, that could be the difference between whether they can keep their doors open or not. Either way – it means many seniors have less access and have to potentially travel further for care.
- This policy could undermine the success of Medicare Part D. The Part D program relies on competition to control costs and provide seniors with the ability to choose the plan that best fits their needs. This power to choose is hugely popular among seniors. Despite this, the latest drug pricing plan will upend Part D, eroding the program’s successful foundation of competition and choice. Today, Part D plans compete against one another and negotiate discounts from manufacturers as part of this competition. But in a world where the government sets the price of Part D medicines, there is less incentive to compete to cover other medicines in the same class. This is likely to lead to more standardized Part D plans and fewer plan options for seniors to choose from.
Learn more about why government price setting is bad policy and better ways Congress could help patients access and afford their medicines. Stay tuned for our next blog in this series when we discuss how price setting will undermine innovation.
Take action: Tell Congress to protect access to new medicines.
Topics: Part D, Out-of-Pocket Costs, Part B, Policy Solutions, Government Price Setting