United States: In the United States, the Biden administration is on the verge of unveiling a law set to benefit the country’s citizens, commencing next year. According to the latest announcement, this federal law will enable people to save on numerous medications by imposing penalties on pharmaceutical companies should they increase prices beyond the inflation rate.
As per the information shared by Medicare officials, the federal health program for individuals aged 65 and older, potential savings on ‘Part B‘ medications could range from $1 to $2,786 per dosage. The implementation of this plan is slated for January 1 and will be contingent upon individual coverage.
Notably, ‘Part B’ medications encompass blood thinners, antibiotics, and cancer treatments administered in clinics or hospitals, as reported by USA Today.
Substantial Savings for Medicare Enrollees!
Consequently, Medicare enrollees are anticipated to pay a 20 percent co-insurance for doctor-administered medications. Nonetheless, the Biden-led administration has pledged to reduce out-of-pocket expenses by more than half for five drugs through inflation penalties.
When delineating the drugs subject to penalties, the official mentioned the blood thinner argatroban, chemotherapy drug bortezomib, and antibiotics cefepime, meropenem, and vancomycin.
President Joe Biden’s Perspective
President Joe Biden unveiled this information during an address at the National Institutes of Health in Bethesda, Maryland, on Thursday. Reports suggest that the inflation penalties fall under the Inflation Reduction Act, also known as the climate and health law initiated by President Biden, which places caps on drug prices set by pharmaceutical companies in various ways.
Biden was quoted, “It’s about giving folks just a little more breathing room,” while surrounded by medical professionals and scientists. He further added, “For too long, Americans have paid more for prescription drugs than any advanced nation on Earth.”
This federal law marks the first instance where the Centers for Medicare and Medicaid Services (CMS) are empowered to negotiate lower Medicare drug prices. The latest update highlighted that presently, around ten medications for diabetes, heart disease, and cancer drugs have been listed for negotiation under Medicare, ensuring their prices remain unchanged until 2026.
Additionally, it was announced that in the next two years, up to 30 more drugs will be included for negotiated prices, slated to come into effect in 2027 and 2028.
Contributions of the Federal Law towards Savings
According to President Biden, through price negotiations and other measures, the federal law is projected to save the federal health program $160 billion over the coming decade, as per the US Today report.
He stressed that Medicare enrollees will experience reduced drug prices, specifically highlighting insulin, capped at $35 per month. Biden stated, “This law is going to lower costs and will save lives,” emphasizing the prevention of people having to “forgo drugs because they can’t afford them,” according to US Today.
Relief for Part D Enrollees amid Soaring Medication Costs!
Under the federal law, pharmaceutical companies will face penalties for escalating prices faster than the inflation rate, primarily concerning prescribed ‘Part D’ drugs typically obtained from pharmacies or delivered by mail. This provision will begin in 2025, targeting companies whose Part D prices exceeded the inflation rate in 2022, 2023, and 2024.
CMS recently issued guidance offering certain benefits to drug companies experiencing shortages in producing specific drugs. For companies the sole source of a generic Part D drug or particular Part B and Part D medications, Medicare will decrease penalties for inflation.
Reports indicate shortages of over a dozen cancer drugs this year, such as cisplatin and carboplatin, used to treat various cancers. The Food and Drug Administration attempted to aid in these shortages by permitting limited-time imports of certain chemotherapy drugs from foreign manufacturers.
Meena Seshamani, the deputy administrator at CMS, outlined that the revised guidance aims to deter substantial price hikes, providing relief to drug companies contending with supply chain disruptions or shortages.
As stated in the US Today report, Seshamani expressed, “Our goal at CMS is to make sure drugs are more affordable and accessible, which includes helping to safeguard and ensure that the pharmaceutical supply chain can deliver critical medicines to providers and patients.”