Should the Federal Government Intervene to Lower Prescription Drugs Costs?

“For far too long, Americans have paid more for prescriptions drugs than any major economy. But now, thanks to the Inflation Reduction Act, Medicare can directly negotiate prescription drug prices to get a better deal for seniors. Today, Medicare has for the first time selected 10 drugs for negotiation. Seniors paid $3.4 billion in out-of-pocket costs for these drugs in 2022.

Big Pharma has long fought this progress. Their profits grew as they spent more on stock buybacks and dividends than they spent on research and development, even as nearly three in ten Americans struggle to afford their medications because of cost.

Today, the Biden-Harris Administration is delivering on another significant milestone in implementing President Biden’s historic law to lower health care and prescription drug costs and ushering in a new era for American seniors. Over the next 4 years, Medicare will negotiate prices for up to 60 drugs covered under Medicare Part D and Part B, and up to an additional 20 drugs every year after that.”

Editors’ Note: The Centers for Medicare and Medicaid Services (CMS) offer a list of the first 10 drugs eligible for price negotiation.

“The President signed four sweeping executive orders on Friday, which together will significantly lower the cost of prescription drugs while increasing access to life-saving medications such as insulin:

The first order directs federally qualified health centers to pass along massive discounts on insulin and epinephrine from drug companies to low-income Americans.

The second order will allow the safe, legal importation of prescription drugs from Canada and other countries where the price for identical drugs is lower.

The third order will prohibit secret deals between drug manufacturers and pharmacy ‘benefit manager’ middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter.

The fourth order ensures the United States pays the lowest price available among economically advanced countries for Medicare Part B drugs. The United States often pays 80 percent more for these drugs than other developed nations.

‘The four orders that I’m signing today will completely restructure the prescription drug market, in terms of pricing and everything else, to make these medications affordable and accessible for all Americans,’ President Trump said.”

Editors’ Note: The four executive orders were not implemented by the Trump administration before a Biden administration freeze for review (1, 3, and 4) or a block by Canadian export rules (2).