Late last week, the Biden Administration announced that Medicare has negotiated lower prices for certain medications, specifically diabetes and blood thinners (among several others). This was a controversial element of the Inflation Reduction Act (IRA), signed into law two years ago.
In many ways, the law is a big step forward for patients, especially those managing serious chronic diseases like high blood pressure, heart disease, cancer, and diabetes. These conditions affect millions of Americans, and any progress toward making their medications more affordable is worth acknowledging.
After all, in our July poll, 24% of chronic disease patients reported taking less medication than they were prescribed in order to save money. That is unacceptable. However, these public-private negotiations are a first-of-their-kind tactic to lower medication costs. We don’t yet have a complete picture of how it will impact broad access to all existing and future treatments (on the federal government’s list, or off the list).
At the Chronic Disease Coalition, we understand and fully support the goal of reducing the cost of care for patients, and continue to believe that price negotiations must be carefully managed to avoid unintended consequences. It’s critical to note that this negotiation program is aimed at reducing costs for the government — which, in theory, should translate to cost savings for patients. Time will tell.
For many patients with chronic conditions, the price that Medicare pays for medications is not the same as what they personally pay. In fact, most patients don’t pay the full list price for their medications. Many are enrolled on plans that receive generous rebates, and some patients receive help directly through copay assistance, or discounts from manufacturers, that significantly lower their out-of-pocket costs. These programs are lifesaving.
Because of these programs, patients often benefit from lower drug prices without government intervention. Does treatment still cost too much? In many cases, yes. In our recent polling, nearly 30% of Americans with chronic diseases said they have to choose between paying for treatment and other priorities like rent and food.
The other major unknown is how private insurance companies will change how they cover the treatments impacted by the IRA. A primary concern is that it may open the door for changes in protocol around step therapy, prior authorization, and other utilization management tactics.
However, our commitment to protecting patient-level discount programs remains as strong as ever. We need to ensure that our elected leaders understand that even as the federal government tries new, innovative approaches to lowering costs, that there are tried-and-true programs already helping patients at the pharmacy counter.
Of course, the process of discovering new medications is expensive and time-consuming, with many drugs in development never making it to market. Patients understand that pharmaceutical companies rely on revenue from successful treatments to find new breakthroughs for patients. Too many price controls can reduce the resources needed for discovery, slowing the pace of innovation and limiting access to new and improved therapies.
These are the dynamics and trade-offs to watch as this new negotiation program is evaluated in the coming years.
Moving forward, one thing is certain: We need to find a balance that allows for affordable care without jeopardizing future advancements — especially rare chronic diseases, for which treatment is immensely difficult to identify.
At the CDC, we will continue to advocate for affordable healthcare that works for patients, both now and in the future. We support efforts to make medications accessible, but we also know that patients with chronic diseases need continued progress in treatment options. We’ll be watching closely to ensure that the changes from this announcement truly benefit patients in meaningful ways.