Drug Pricing – The Big Picture and a Call to Action!
Drug prices have been a favorite discussion item of politicians for years, but never more than this year. There has been a myriad of solutions offered, from small tweaks to a complete replacement of Part D, Medicare’s prescription drug program. You’ve probably wondered if I was ever going to quit talking about these varied proposals but in order to speak out, we must understand the impact these proposals will have on each of us and when the votes on these proposals will take place. We need to take action before the votes are counted and there is a good chance that in the next few weeks, either the infrastructure bill or the big reconciliation bill will be discussed in committees or on the floor of the House and the Senate with votes to follow. Either one of these bills could, and probably will, have healthcare components and specifically drug pricing proposals. The time for action is now!
Let’s take a quick look at the most important changes to Part D that have been proposed, first the ones that historically have had some bipartisan support.
- Price transparency – Unmask some of the prices and costs in the drug business process to encourage competition.
- Balance copay costs – This change would let Medicare enrollees spread out their copays in monthly installments so they wouldn’t be faced with the entire yearly cost in the first few months.
- A cap on prescription drug out-of-pocket costs – This change would put a beneficiary cap on the yearly out-of-pocket cost for the Medicare prescription benefit, Part D.
- Telehealth – Expand payments and eligibility for telehealth services.
As you might imagine I think some of these proposed changes are needed, they increase competition, make it easier to pay copays, finally put a cap on yearly out-of-pocket costs, and add a cost-effective healthcare option. These are the type of changes where the government can help make a program efficient without ruining the competition inherent in the public/private partnership that is the basis of Medicare Part D.
- Drug importation – Allow states to import drugs from foreign countries, primarily Canada.
- Drug negotiations – This would allow the government to essentially set drug prices.
- Limit drug prices – Base drug prices on those of a select group of foreign countries.
- Limit existing drug price increases – Using the Consumer Price Index (the CPI, an inflation indicator), the government will limit the amount certain drug prices could be increased.
- Expand Medicare eligibility – Possibly lower the eligibility age to 60.
- Expand Medicare benefits – Add dental, hearing and vision coverage.
- Change the prescription drug rebate process – Push rebate savings to the patient at the pharmacy counter.
- Change Part D to operate like the VA drug programs functions – This is a very recent approach that just came up. It would mimic the government-run VA drug program which has about half of Part D’s formulary and sets price discounts.
The bulk of these proposed changes reflect an approach where the government dictates prices and inserts itself into the very core of the whole process. This is where I want to step back and talk about the big picture.
Part D is successful because it lets the free market work within a framework of government oversight . . . the public/private partnership. You have declared yourself how well this partnership works in the recent Part D satisfaction survey we took. When government inserts itself into these complicated programs, politics is the focus and efficiency suffers. A case in point.
When America, and the whole world, needed a vaccine to combat COVID-19 they needed it fast, not in the historical years it takes to bring a drug to market, but in less than a year. The government opened the purse strings and offered to fund this impossible task. Pfizer turned down this offer; they turned it down because they knew that accepting government money would slow down the process. It’s no secret that they stood to make a sizable profit if they were successful, but there was no guarantee of success when they took on the challenge. Pfizer was able to move quickly and was the first to give the world a vaccine that has proven to be very effective. My point here is government in inherently inefficient.
We need to step back and look at each of the proposed changes to Part D and ask ourselves, do we want more government involvement? Is government price fixing the path we want to head down? Do we want our government to control access and the options available in our healthcare? These are the questions we need to ask.
Now is the time to act. Click here to find out how to contact your Senators and Representative. Take the opportunity to make your voice heard. Tell them that Part D works for you, and you don’t want more government intrusion into this successful program. Tell them there are ways to increase the efficiencies of the program without destroying the competition and private part of the partnership. Your voice matters and we need to act now. Take the time to speak out.
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