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Inflation bill could "change the game" for millions of seniors

The Anti-Inflation Act is the most important effort in decades to reform drug pricing in the United States, experts say.

"This is going to be a game changer," said Lena Conti, an associate professor at Boston University's Questrom School of Business who studies drug pricing. } Talked about the passed bill. The Senate on Sunday and which House members can vote on Friday. 

The bill will also invest $400 billion in fighting climate change and increasing taxes on businesses, but what will it do to bring down skyrocketing drug prices? Read on to find out.

$2,000 out-of-pocket limit

The biggest change for seniors in Medicare will be to limit spending - drugs and out-of-pocket for vaccines. The vaccine will be free from next year. Beginning in 2025, co-payments for medicines will be limited to $2,000 annually. In 2024, the cost will be capped by Medicare's catastrophic drug coverage limit, which is $7,050 this year.

Good news for older people on expensive medications.

"Today's policy is basically unlimited out-of-pocket and very bad for people who need expensive medicines," said Vanderbilt University Medical Center's Health Policy Director. "Some have bills of $10,000 or more a year for people who need drugs to treat cancer, multiple sclerosis, and rheumatoid arthritis," said Associate Professor Stacey Dusetsina. 

According to the Kaiser Family Foundation, 1.5 million seniors spent more than $2,000 on prescriptions in 2019. But the actual number may be higher, Dusetzina said, pointing to a study showing that 30% of Medicare beneficiaries facing high cancer treatment costs do not fill their prescriptions.

Tricia Neuman, director of the Kaiser Family Foundation's Medicare Policy Program, noted that half of Medicare beneficiaries live on less than $30,000 a year. 

"This is a significant savings for those on relatively low incomes," she said.

Subsidies for Low-Income Seniors

This measure would make more seniors eligible for low-income subsidies to pay for Medicare prescription drugs.

Starting in 2024, the income limit to be eligible for Medicare's Low Income Subsidy will increase from the current limit of 135% to 150% of the federal poverty level. (Using today's income levels, this would mean that one person could earn up to $19,200 to qualify.) 

As a result, a KFF study found that about 400,000 Medicare beneficiaries will receive subsidies under the new program. 

Insulin Price Cap

The Inflation Reduction Act limits how much seniors need to spend on insulin to $35 a month. their diabetes. Despite bipartisan support, a provision imposing that cap on all patients was removed from the bill at the last minute.

Since 2007, the number of Medicare beneficiaries using insulin has doubled, but the amount Medicare spends on insulin has increased twice as fast as her. . In a KFF study one in four of her diabetics saved insulin because it was costly.

Some expensive drugs will be cheaper

The bill also makes some minor changes to limit price increases across drugs. The bill would direct the government to negotiate how much Medicare will pay minor drug groups beginning in 2026.

2026 will be the first year drugs will be negotiated, and the list will include 10 drugs. The drugs that Medicare spent the most money on last year. By 2029, that list will expand to 20 drugs. This includes medicines prescribed by a pharmacy and medicines given by a doctor, such as some chemotherapy. 

"Costs and federal savings will increase significantly as more drugs are added," said Michael Levesque, chief pharmaceutical analyst at Moody's Investors Service.

This bill would limit the scope of government negotiations to drugs that have been on the market for at least 9 or 13 years and have no generic or biosimilar equivalent, depending on the drug class. The bill also directs the United States to focus on the medicines on which the government spends the most money.

"They are long-term," said Conti of Boston University. "It's a long-lived, expensive drug and it has to be competitive."

Medicare's top spending drugs in 2020 included the anticoagulant Eliquis ($9.9 billion), the cancer drug Revlimid ($5.4 billion), and the blood thinner Xarelto ($5.4 billion). $4.7 billion). ) 

Conti estimates that he will save 70% from his 40% on the price of certain drugs. The government could save him more than $100 billion from negotiating drug prices over a decade, the Congressional Budget Office estimates . That's less than 3% of the profits global biopharmaceutical companies will make over the next decade, he predicts, UBS analysts.

The bill should also directly reduce costs for patients taking these specific drugs. “A lot of people pay coin insurance based on the price of [medicine]. If the price is cheap and they pay 33% coin insurance, they pay a lower price,” he said at KFF. He said Neuman.

Rebates on Expensive Drugs

The Inflation Control Act requires drug manufacturers to offer rebates to Medicare if they increase the price of drugs faster than inflation. Rising prescription drug prices are one reason Medicare costs have ballooned over the past decade

According to MedPAC, prices paid by Medicare Part D for brand-name drugs for which there are no generic equivalents have increased by an average of 7.5% annually since 2010. I'm here. Drugs in the program raised prices faster than inflation, the KFF found. The CBO estimates that the requirement for drug companies to repay Medicare for rising drug prices will save the government $71 billion over the next decade. 

"The Medicaid program has been using these drug inflation his rebates for a long time, and it has resulted in significant savings," said Vanderbilt's Dusetzina. "Having the same program applied to the Medicare population will save a lot of money in the long run, and it will save all of us as taxpayers money." Will there be any benefit for patients with

Apart from the provision that he extends the Obamacare Plan's health insurance subsidies for three years, the health care aspect of the inflation bill has a limited focus on Medicare patients. Experts are divided on how Medicare drug reform will affect the majority of Americans who receive health insurance and drug coverage through their employers.

One camp believes that pharmaceutical companies will try to offset their small profits in the Medicare market by overcharging private insurance. Others believe that transparency into what Medicare pays makes it easier for private plans to negotiate better pricing. may start.

The pharmaceutical industry says the possibility of price negotiations for some of the best-selling drugs will chill innovation and reduce the incentive for pharmaceutical companies to bring new drugs to market. The industry trade group, American Pharmaceutical Research and Manufacturers, called it a "tragic loss for patients," and the bill would "provide new treatments for patients battling cancer, Alzheimer's, and other ailments."

However, the CBO said the new legislation is expected to bring just 10 fewer drugs to market over the next 10 years to gain FDA approval. about 1% of all drugs that  

Dusetzina called claims that drug price negotiations would kill the market for drug development "exaggerated." 

"Every other country is negotiating drug prices," she said. "We are paying much higher prices, but we know that these companies make profits in other countries where they sell these drugs."

Pharmaceuticals The company may try to manipulate the system.

Experts noted that pharmaceutical companies may try to circumvent price controls on their most popular drugs by lowering the price of new drugs to compensate for cutting costs on older drugs.

Dusetzina said the bill provided a "toe" to see how the pharmaceutical industry would respond to price negotiations on a very limited scale. .

She added, "Medicare is something we all pay for, so if you don't get a good deal, you should worry." 117} Trending News

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