In the United States of America, purportedly the richest country on earth, thousands of people, mostly poor and old, suffer daily, and some actually die because they cannot afford the high prices of existing prescription drugs.
Unfortunately, many people living in America are suffering from critical diseases and depend on prescription drugs to live. Prescription drugs are not a luxury, but for several years, particularly since 2003, the US government established laws that prohibit the government from negotiating with drug manufacturers.
Most countries have the ability to negotiate prices with drug manufacturers, but in 2003, such negotiations were banned in the US under the law that created the Medicare Part D prescription drug benefit, a federal government health plan that covers the cost of prescription drugs for Medicare recipients, usually people over age 65.
Exorbitant prices and financial strain
So, for some 20 years, drug manufacturers have had an open card to set the prices of critical drugs for serious diseases such as heart disease, cancer, diabetes, Parkinson’s Disease, at exorbitant prices. Often, even with the benefit of Medicare Part D, patients have been forced to pay high amounts out-of-pocket for some drugs, depending on what percentage of the costs of the drugs Medicare, or the related private insurance company covers. It’s estimated that American seniors spend $3.4 billion annually on out-of-pocket expenses for prescription drugs.
But thanks to the Inflation Reduction Act passed by the Joe Biden Administration in 2022, the US government has taken the right to negotiate prices for several current high-price medications for Medicare beneficiaries, effective in 2026. The law gives the Secretary of Health and Human Services the right to negotiate the prices of some drugs with drug manufacturing companies.
Immediate action: Negotiating drug prices
A few weeks ago, President Biden announced that the government will begin negotiating the prices of a batch of 10 drugs used to treat blood clots, cancer, Crohn’s disease, diabetes, and kidney disease, diseases that usually affect seniors. The drugs are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/NovoLog insulin products.
Under the Inflation Reduction Act, negotiations on another 50 drugs are planned over the next four years, and after that, 20 additional drugs annually.
The cost of life: A closer look at medication costs
Currently, a 15-day supply (30 tablets) of Eliquis, a blood thinner critical for patients diagnosed with Atrial-Fibrillation (A-Fib) which can cause serious blood clots, costs around $330. Once a patient is placed on Eliquis, he/she has to continue taking the medication. Currently, insurance companies affiliated with the Medicare program cover the full cost of the drug, but a year’s supply of the drug costs around $7,200. If, as is usually the case, the patient is prescribed other medications, they can easily reach the cap set for insurance coverage under the plan and then be required to pay out-of-pocket.
To people who depend on these expensive medications, 2026 may seem like a long time away, but positive action is being taken to bring relief. On the other hand, people who are not on Medicare, or are veterans whose medication costs are met by the VA, or Medicaid recipients, still face these overpriced medications charged by American drug companies. These people need help too.
Although some competing drug companies produce less expensive substitutes for brand-name drugs, drug patents held by big pharmaceutical companies often block them from placing these generic drugs on the market. If they persist in entering the market, they risk lawsuits from the big pharmaceuticals.
The provision under Biden’s Inflation Reduction Act to negotiate prescription drug prices is a major step in helping consumers afford their medication, but more needs to be done. This isn’t just the prerogative of the federal government. Private insurance companies need to investigate ways of offering more coverage for prescription drugs. Likely, this will cause premium rates to increase, but policyholders should be inclined to pay higher rates if they are assured they are getting real help in meeting the cost of their medication.
Facing resistance: The road ahead
Meanwhile, since it’s expected that big drug companies will resist the Biden administration plan to negotiate drug prices with lawsuits submitted to federal courts, and possibly even the US Supreme Court, strong efforts will be needed from health insurance companies, congressional representatives, and the general public to counter the effectiveness of such lawsuits. In the US, pharmaceuticals aren’t only big in size; they yield awesome power. For the health of the nation, especially for citizens over age 65, it’s desperately hoped that the government will effectively resist the power of the big pharmaceuticals. There’s no need for prescription drugs to be so expensive in the USA.
