Prescription for Medicare

Through the years, Medicare Parts B and D have been providing seniors with access to lifesaving treatments.

But now seniors are increasingly facing higher out-of-pocket costs on the medicines they need. In response, there has been a lot of talk in Washington about changing Medicare to reduce costs and improve access. But while many proposals would cut costs for the government and insurers, they don’t focus on cutting costs for seniors; and even worse, they would limit access to the medicines that could save their lives – now and in the future. Cutting costs for everyone except seniors and limiting access to medicines is the Wrong Prescription for Medicare. On the other hand, making changes that help seniors pay less out of pocket and improve access is the Right Prescription for Medicare.

Changes to Medicare should be the right prescription for seniors.

Upending Medicare while adding access restrictions and chilling investment in R&D

Speaker of the House Nancy Pelosi recently unveiled a plan that would fundamentally change how patients access medicines in the United States. Her plan gives the government unprecedented authority to set prices for medicines in both public and private markets based on the average amount that six countries pay plus 20% and no more. If biopharmaceutical companies do not meet this new price, the government can force companies to pay a massive excise tax of as much as 95% of the gross sales for the medicine. This drastic plan would jeopardize the almost $100 billion biopharmaceutical companies invest annually in R&D, eroding incentives that are critical to the search for treatments for diseases like Alzheimer’s and eliminating hope for patients waiting for new cures and treatments. The plan is also projected to cause the permanent loss of nearly 1 million U.S. jobs.
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Speaker Pelosi’s plan threatens our country’s global leadership in developing innovative, lifesaving treatments and cures. It would also force patients to face the uncertainty of a health care system where the government sets prices for medicines and imports foreign determinations of the value of medicines. This plan is the wrong approach for patients, the U.S. health care system, American innovation and the U.S. economy.
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Require middlemen to share the savings at the pharmacy counter

Some in Washington have put forth proposals that are unprecedented in both size and scope, but we do not need to blow up the current system to make medicines more affordable. Instead, policymakers should pursue practical policy solutions. For example, while the average negotiated rebate in Part D is 35%, many seniors do not see those savings in the cost they pay at the pharmacy counter. Passing through some of those rebates could save seniors billions of dollars over the next 10 years. In fact, a recent study of diabetes medicines in Part D found that giving seniors 80% of negotiated discounts on diabetes medicines at the pharmacy counter could save a senior with diabetes $350 per year on their health care costs. The change could also save Medicare nearly $1000 annually for every senior taking diabetes medication.
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Mandatory sharing of rebates with Part D beneficiaries at the point of sale could result in savings for them that helps promote more consistent use of medicines, improve their health outcomes, ensure patients are not penalized for being sick, decrease government spending on low-income subsidy payments and promote a more competitive marketplace for medicines. On top of this solution, other practical proposals that would improve affordability in Medicare include capping seniors’ out-of-pocket costs, lowering patient cost sharing and ensuring predictable monthly out-of-pocket costs. These are commonsense, targeted policy solutions that would directly help seniors without jeopardizing access to future treatments and cures.
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Government-set prices for lifesaving medicines that could limit access for seniors

Some in Washington are pushing proposals that are centered on the misguided idea of having the government set prices through a mechanism known as international reference pricing. In countries that use international reference pricing and other government price controls, patients face significant restrictions in accessing new medicines and treatment options. Nearly 90% of new medicines launched since 2011 are available in the United States compared to just 50% in France, 48% in Switzerland and 46% in Canada – countries that use some form of international reference pricing.
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Despite these access concerns, the Department of Health and Human Services is currently considering an international reference pricing proposal that would set U.S. prices for medicines covered under Medicare Part B based on prices set by 14 foreign governments. Known as the International Pricing Index Model, this proposal’s far-reaching changes to Medicare Part B would take the program in the wrong direction, potentially hurting patient access to needed treatments, creating disruption and uncertainty for providers and discouraging continued medical innovation here in the United States. 

 

Speaker Pelosi’s drug pricing plan also includes flawed international referencing pricing, giving the government unprecedented authority to set prices for medicines in both public and private markets based on prices set by six foreign governments. International reference pricing, no matter how you structure it, would be an entirely new approach to health care in the United States, upending the only truly market-based system in the world. Today, Americans have faster access to more medicines than anywhere else in the world, but international reference pricing proposals would put that at risk
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Interfering with the successful Part D program

For more than a decade, Medicare Part D has been providing seniors and those with disabilities with access to lifesaving treatments. In fact, according to a recent nationwide survey, nearly nine of ten seniors are satisfied with their Part D prescription drug coverage.

However, some in Washington are pushing radical proposals that would fundamentally upend the successful Medicare Part D program through so-called “Medicare negotiation.” In fact, Speaker of the House Nancy Pelosi recently unveiled a “negotiation” plan that could discourage investment in curative therapies that treat rare and complex conditions. These changes would have a devastating impact on treatments for diseases such as cancer, hepatitis C, HIV, antipsychotics, and multiple sclerosis. None of these changes to Part D would guarantee that a medicine is covered, and insurers would still get to use utilization management and other tools to restrict access.
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“Medicare negotiation” might make for a good soundbite, but it ignores the fact there is already negotiation in Part D between plans and manufacturers that help keep costs low. In fact, the CBO has repeatedly said that the Secretary of Health and Human Services would not be able to secure lower prices than are already achieved through current negotiation without restricting access to medicines for the beneficiaries who rely on them. Congress should focus on improving Medicare Part D, not disrupting what is working.
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Forcing patients to fail first

Over the years, one of the cornerstones of Medicare has been to ensure the sickest and most vulnerable patients have access to the clinically critical medicines they rely on. Physicians work with their patients to find the best treatments, taking into account individual seniors’ needs and lifestyles. But some support placing restrictions on access to medicines through utilization management tools like prior authorization or step therapy. Prior authorization, for example, requires that a patient’s insurer approves the use of a medicine before a physician can prescribe it. Step therapy, also known as fail first, requires that a patient try their insurer’s preferred medicine and have it fail before they can get the medicine their doctor prescribed. Letting plans restrict access for some of the sickest and most vulnerable beneficiaries would reduce adherence to those medicines, jeopardizing their health, increasing their need for inpatient care and resulting in poorer outcomes for seniors and potentially higher costs for taxpayers.

Tell Washington Changes to Medicare Should Benefit Seniors

There are right and wrong prescriptions for changing Medicare. Seniors need Washington to focus on the right ones.