Federal health officials released their proposed guidance early in February, outlining the first pair of major drug reforms contained in the Inflation Reduction Act aimed at reducing prices.
Fed and Biden administration layout plans to slash drug prices
The reforms are projected to save Medicare roughly $170 billion over the next decade, NPR reported.
“We’re taking on powerful interests to bring your health care costs down so you can sleep better at night,” President Joe Biden said during his State of the Union address.
The changes are coming in part a result of Congress passing The Inflation Reduction Act of 2022, which grants Medicare the ability to negotiate drug prices.
According to Wikipedia, the Act allows: “Prescription drug price reform to lower prices, including Medicare negotiation of drug prices for certain drugs (starting at 10 new ones per year by 2026, increasing to more than 20 additional ones per year by 2029) and rebates from drug makers who price gouge – $281 billion.”
In 2009, spending on drugs by Medicare, which covers 64 million seniors and people with disabilities, was roughly $85 billion. In 2020, the amount nearly tripled to $240 billion. On average, Medicare spends $2700 per beneficiary on retail drugs annually.
Biden administration lays out slow timeline for reducing drug prices
While the Biden administration recently unveiled a plan and a timeline for reducing drug prices, like all things with the federal government, the wheels turn slowly, and it will still be several years before consumers and the Medicare budget begin to reap the benefits, USA Today reports.
Currently, the Centers for Medicare & Medicaid Services has employed roughly two dozen analysts, economists and other technical experts for the task of translating the new law into ironclad policy.
The timeline:
-The first part of the government’s plan will be to select the first 10 drugs it will negotiate maximum prices for by September 1, 2023.
-However, the bargaining with pharmaceutical manufacturers won’t get underway until 2024, and the government will publish prices by September of that year.
-Any price changes that are negotiated will not go into effect until 2026 at the earliest.
-Starting in 2029, Medicare will hold regular negotiations with pharmaceutical manufacturers on up to 20 drugs each year.
In the meantime, the administrator for the Centers for Medicare and Medicaid Services said that it will solicit feedback from the public, consumer advocates, drug manufacturers and others in shoring up its blueprint toward the goal of ensuring “people with Medicare pay fair prices for some of the costliest medications.”
