Lawmakers Have a Drug Pricing Solution Right in Front of Them
As Congress continues to deliberate on drug pricing proposals that many would call extreme, even radical – empowering the federal government to set prices instead of having prices negotiated in the marketplace – a leading health policy research firm has issued findings that should lead lawmakers to turn toward solutions that would not undermine medical innovation but would have a significant impact on the actual costs consumers experience at the pharmacy counter.
In 2020, Senator Chuck Grassley (R-IA), then chairman of the Senate Finance Committee, introduced the Prescription Drug Pricing Reduction Act (PDPRA) which, for a time, enjoyed bipartisan support. The bill would have, among other provisions, capped out-of-pocket costs for Medicare Part D beneficiaries at $3,100 annually, allowed beneficiaries to spread those costs over a full year instead of facing heavy charges up front, and reduced coinsurance levels in the initial coverage phase of Part D from 25 to 20 percent.
Avalere, the highly-respected health policy research firm, has performed some new analysis on what the Prescription Drug Pricing Reduction Act would do for Part D enrollees (those who do not qualify for low-income assistance), and it’s striking.
The Avalere study found that the provisions of the PDPRA would provide beneficiaries a 23 percent reduction in out-of-pocket costs compared to current law. The research showed even greater cost reductions for Black (25%), Hispanic (25%) and North American Native (26%) beneficiaries.
And as the Avalere authors point out, the impact of lower out-of-pocket costs goes beyond financial security: “A large body of research has identified relationships between out-of-pocket costs for prescription drugs, treatment adherence, and health outcomes. In addition, non-adherence to treatment can have a significant impact on patient outcomes, resulting in higher costs of care, disease progression, and adverse events. As policymakers further consider reforms to Part D, assessing the impact of reforms on different patient populations, based on disease/condition, race, and reason for entitlement is an essential step to understanding all the possible impacts on access, affordability, health outcomes, and health disparities.”
This research should serve as an invitation for lawmakers to pull back from extreme approaches and the significant consequences that can impact patients and the future of our healthcare system and instead look to common-sense solutions that will directly achieve a bipartisan objective – reducing the amount of money seniors are paying out of pocket for the medicines they need.