August 12, 2022
Happy summer everyone!
In the News:
The US House is expected to approve the Inflation Reduction Act this afternoon.
The US Senate passed the bill on Sunday.
Here are a few health related highlights:
The Hill reported:
Medicare can negotiate lower prices.
The bill would allow Medicare to negotiate prices for some drugs for the first time, a policy Democrats have been trying to enact for years over the fierce objections of the pharmaceutical industry. The provisions save more than $200 billion over 10 years.
- It would allow Medicare to negotiate lower prices for 10 high-cost drugs beginning in 2026, ramping up to 20 drugs by 2029. There is a steep penalty if a drug company doesn’t come to the table: a tax of up to 95 percent of the sales of the drug. There is also a ceiling that the negotiated price cannot rise above.
- In a deal with moderates including Sen. Kyrsten Sinema (D-Ariz.), only older drugs are subject to negotiation after a period of nine years for most drugs and 13 years for more complex “biologic” drugs. That means the negotiations are more limited than many Democrats wanted.
Drug costs can be capped but largely only for Medicare.
The bill includes other measures to cap drug costs. The provisions still largely apply only to seniors on Medicare, not the millions of people who get health insurance through their jobs, in part because complex Senate rules limited how expansive the provisions would be.
- If drug companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to the government for the difference. Democrats tried to apply this provision to the private market, but the parliamentarian ruled it violated the Senate rules used to bypass a GOP filibuster.
- In one of the most tangible provisions for patients, the bill caps out-of-pocket drug costs at $2,000 a year for seniors on Medicare, starting in 2025.
- The bill also caps patients’ insulin costs at $35 a month, but only for seniors on Medicare. Republicans voted against overruling the Senate parliamentarian to extend that protection to patients with private insurance.
People enrolled in ACA plans get an extension on premium assistance.
The measure also builds on the Affordable Care Act (ACA) by extending enhanced financial assistance to help people enrolled in ACA plans afford premiums for three years. The extra help otherwise would have expired at the end of this year, setting up a cliff. The provision expands eligibility to allow more middle-class people to receive premium help and increases the amount of help overall.
