Debate over capping drug prices turns to states

Democrats are touting how the multibillion-dollar proposal crafted by Senate Majority Leader Chuck Schumer and Sen. Joe Manchin would lower drug prices for seniors on Medicare.

But because of limits on what Democrats in Congress can get through the Senate, the bill doesn’t go as far as Democratic leaders like House Speaker Nancy Pelosi wanted: limit what drug companies they can charge everyone and not just those in the federal health system. program for seniors.

Instead, that fight is being left to play out in state capitols across the country.

Lawmakers in Colorado last year and Washington in March created boards that will review drug prices in their states and, if they are too high, have the power to set a cap on how much can be charged.

And other states could follow.

This year bills have been introduced to do the same in seven other states: Arizona, Connecticut, Michigan, Minnesota, New Jersey, Pennsylvania and Rhode Island. Meanwhile, a Massachusetts bill would allow a state board to require a pharmaceutical company to initiate a plan to cut prices if it is deemed to be charging too much.

A total of 288 bills aimed at reducing drug prices have been proposed in the states this year, according to the National Academy of State Health Policy. drug bill tracking database Around the country.

“We were tired of waiting for Congress to act. A lot of states think we can’t wait,” Washington Democratic Sen. Karen Keiser, who sponsored her state’s law, said in an interview.

“So we’re doing what we can do at the state level,” he said.

Bill does not reach the original goal

After years of debate over drug prices in Congress, Democrats are taking action as part of the Inflation Reduction Act proposal that Schumer, of New York, and Manchin, of West Virginia, agreed to last week. pass.

The huge bill, which I would also spend $369 billion on climate change and $64 billion to allow millions to continue to pay for health care coverage, it would allow Medicare to negotiate down the prices of 10 drugs with pharmaceutical companies. The number would grow to 20 in 2029.

However, Democrats’ ambitions were much higher in April 2021 when Rep. Frank Pallone, a New Jersey Democrat who chairs the House Committee on Energy and Commerce, introduced the Elijah E. Cummings Act to reduce drug costs now. The bill would have required drug companies to charge commercial insurers the same price they negotiated with Medicare.

Under that bill, the Secretary of Health and Human Services would have negotiated “lower prices on behalf of Medicare. But those same lower prices will be available to all privately insured Americans,” Pallone said at a committee hearing on the bill.

Democratic House Speaker Nancy Pelosi of California pushed the bill, touting it as a “bold action to level the playing field for America’s patients and taxpayers” in a fact sheet at the time. The bill, Pelosi stressed, “makes the lowest drug prices negotiated by Medicare available to Americans with private insurance, not just Medicare beneficiaries.”

However, extending negotiated pricing to commercial insurance, an idea strongly opposed by the pharmaceutical industry, as government rate-setting was not included in the $1.75 Build Back Better bill Billions from the House. And Senate rules prohibit it from being part of the scaled-down version of Schumer and Manchin, the sources said.

To overcome unanimous Republican opposition to the new bill, Schumer plans to try to pass it through a budget procedure called reconciliation, which requires only 50 Democratic votes. However, the procedure only allows for provisions with a direct impact on the federal budget.

That’s a loss for states and cities to get relief from the large amounts they pay for drugs.

There are no national figures available on how much state and local governments spend on drugs. But in Maryland, for example, state estimates which spends about $400 million a year on drugs taken by its employees.

The 25 most expensive drugs, including the arthritis treatment Humira Pen, the diabetes drug Trulicity and Enbrel, which is used for autoimmune diseases, accounted for just 8% of total prescriptions in 2018 but 36%, or $360 million, of the state’s total drug spending.

Jennifer Reck, director of NASHP’s Coverage, Cost and Value Project, said in an interview that not extending Medicare’s negotiated prices to others, including drugs taken by state and local workers, means it won’t reduce the amount that states and localities spend on drugs. However, governments would have seen a decline if the Democrats had been able to achieve their goal of lowering prices for everyone.

However, Reck said the bill would add some pressure on drug companies to charge everyone the same prices they negotiated with Medicare. That could reduce the cost to states and localities.

Additionally, experts at health care policy groups, including the Kaiser Family Foundation, noted that the bill would also put pressure on drugmakers not to raise prices above inflation. If they do, they would have to return the difference over inflation to Medicare through reimbursements.

Although commercial insurers would not get the reimbursements, the Department of Health and Human Services would include commercial insurance price increases in determining whether a company is raising drug prices above inflation.

That would push companies not to raise commercial insurance prices faster than inflation, because it would make it more likely they would have to pay reimbursements to Medicare, Meredith Freed, a senior policy analyst at the Kaiser Family Foundation, said in an email.

‘A good start’

Still, while Keizer called the proposal in Congress “a good start,” he said letting Medicare negotiate the price of drugs for seniors wouldn’t bring the same relief as limiting how much companies can charge everyone. He said Congress’s inability to pass a broader drug pricing bill could push more states to follow Washington and Colorado’s lead.

However, by taking on drug prices for Medicare patients, Congress is dealing with a problem that states cannot address, Maryland Democratic delegate Joseline Pena-Melnyk said in an email.

“The Medicare population is one that we generally can’t help at the state level because it’s a federal program,” said Pena-Melnyk, chair of the House health and government operations committee. “We have a number of older Marylanders who are having trouble paying for their prescriptions. We often have to tell them that there is little we can do to help them. If our federal partners take care of their programs, we can work on the others.”

Pena-Melnyk sponsored a 2019 law that created a state drug pricing board that is now considering whether to ask lawmakers to allow it to set a price cap on how much public employees are charged for certain drugs.

Andrew York, executive director of the Maryland Prescription Drug Affordability Board, noted in an email that another limitation of the congressional bill, the relatively small number of drugs that would be affected, gives states room to address the cost of other medications.

Sen. Bernie Sanders, an independent from Vermont, has criticized the proposal. for being “weak” saying among other things that it does not allow Medicare to negotiate the price of more drugs.

York, while not criticizing the proposal, noted that “federal policies often only affect specific parts of the prescription drug market. It is still important for states to address prescription drug affordability to complement the work being done at the federal level.”

Opposition from the pharmaceutical industry

The creation of state boards that could cap drug prices is opposed by the influential Pharmaceutical Research and Manufacturers of America, known as PhRMA, which sees it as government intrusion. that would take money away from the industry to develop new cures.

“Whether it is the current drug pricing bill in Congress or state drug affordability boards, both are forms of government pricing that ultimately threaten future innovation and access to life-saving drugs for consumers. patients,” PhRMA spokeswoman Sarah Sutton said in a statement. “Instead, policymakers should focus on common sense solutions that help patients at the pharmacy counter and don’t disrupt the health care system, improving patient access and lowering patient out-of-pocket costs.” .

Maryland is one of six states that created boards similar to those in Colorado and Washington, but stopped short of giving them the power to limit how much can be charged for drugs and limit their work to the price of drugs for state and local workers or those on Health Insurance.

Pena-Melnyk said she wanted the Maryland board to have authority over drug prices for all state residents, rather than just public employees. But to get the measure through the legislature, he had to compromise. Rather, the board should recommend to the Maryland legislature before December 2023 whether to expand its authority to more people and allow it to set limits on how much can be charged for drugs.

“States have been incredibly active around drug prices because they haven’t been able to wait for Congress,” Reck said. She He noted that more than 250 laws have been passed since 2017.

The boards are among a variety of approaches states have tried to lower drug prices, including enacting transparency laws that require entities throughout the drug supply chain to report price information to state officials. , including the reason why the prices are increased.

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