Congress is shaping up to be one of the scarier places to be this Halloween.
The reconciliation bill remains an unsolved riddle and Congressional Democrats and President Biden are pushing for some particularly ill-advised policies. Chief among them are changes to the way we calculate drug prices. Fortunately, wise members like San Diego’s Rep. Scott Peters are pushing back.
While we desperately need comprehensive drug pricing reform, current policies under consideration by Congress and the White House are misleading to the American public and would ultimately cause more harm than good.
Consider “direct negotiation,” a policy many Democrats are pushing to include in the forthcoming reconciliation bill. According to a recent poll (commissioned by the Alliance for Aging Research), about six in 10 American seniors believe their understanding of government “direct negotiation” of Medicare prescription drug prices means “either the drug company or government proposes an initial price for a drug, then there is back-and-forth negotiation, and price ends somewhere in the middle.”
Sounds reasonable, right? Unfortunately, it couldn’t be further from the truth. Still, politicians seem happy to keep the American public in the dark.
In reality, direct negotiation translates into the government setting prices for prescription drugs and refusing to cover them if the company does not agree. No agreement means delays and less access for patients to life-saving treatments. It also means there will be less incentive to invest research dollars in rare diseases, neurological conditions, and other areas where cures are desperately needed.
When the true meaning of direct negotiation was revealed, seniors had serious concerns with allowing the government to arbitrarily set drug prices. Seventy-six percent said they were concerned that there was no guarantee that patients could save money. Another 74% were worried that decisions about which medications are covered could be decided based on the “value” of a patients’ life by looking at their medical conditions and age. In short, they fear that older or more chronically ill patients could experience reduced access to critical medicines.
Sadly, this isn’t out of the realm of possibility. The methodology behind “direct negotiation” would discriminate against many of the people in greatest need. Peters should remind President Biden that, back when he was campaigning, he pledged that people with disabilities would never be denied coverage based on policies that used discriminatory methods.
More recently, policymakers have considered reforms to Medicare’s prescription drug benefit that would adopt the Veterans Administration’s list of covered drugs. But the VA formula is already more limited than Medicare’s, and seniors want no part of it. According to the survey, only 20% of seniors would trade their current coverage in favor of a system that resembles the VA.
The vast majority of seniors have the right idea when it comes to what drug pricing reform should accomplish. Ninety percent said they would favor an annual cap on out-of-pocket costs for prescription drugs in Medicare. Another 86% favored basing the cost patients pay for drugs on the negotiated rate that insurers and employers pay, rather than the drug’s higher list price (i.e., sticker price).
Many older adults are even willing to compromise on the issue. About 6 in 10 respondents said they would be willing to pay a slightly higher monthly premium ($10 or less per month) to have lower deductibles and copayments. And most respondents preferred to maintain access to a wide range of innovative prescription drugs, even if some had high prices, rather than keeping prescription drug costs as low as possible if it meant fewer innovative and new drugs would be available.
Instead of being misled, older adults expect and deserve for their President and members of Congress to be up front about proposals to address growing out-of-pocket costs for prescription drugs. Peters understands that the current deal on the table is not one worth making. If Congress and the Administration are serious about addressing senior’s healthcare costs, the ball is in their court.
Sue Peschin is president and CEO of the Alliance for Aging Research in Washington, DC.