WASHINGTON DC: Vice President Kamala Harris speaks at a White House event in August 2023 celebrating … [+]
Standing next to President Biden at a campaign event last month, Democratic presidential candidate Kamala Harris celebrated the newly announced price cuts for the top ten Medicare prescription drugs negotiated under a provision included in the Inflation Reduction Act. . Harris said she is “proud to have cast the vote to break the tie that gave Medicare the power to negotiate” drug prices. And now she has reaffirmed her commitment to extend the applicability of parts of the law to the commercial insurance sector and to build on Medicare’s negotiated policy to include more drugs if she becomes President. However, she would not be able to accomplish these goals on her own. It would need the support of Congress.
The Department of Health and Human Services announced last month the lower prices — so-called maximum fair prices — Medicare had negotiated with drugmakers for the first ten drugs it chose in 2023 under the IRA’s drug price negotiation program. . These outpatient medications are popular, best-selling medications, also among the elderly and people with disabilities. They are used to treat diseases such as heart disease, diabetes and cancer. The new prices will take effect on January 1, 2026. Once these prices are implemented, Medicare beneficiaries are expected to save a total of $1.5 billion in out-of-pocket pharmaceutical costs.
The next batch of 15 outpatient prescription drugs will be selected by the Centers for Medicare and Medicaid Services in February 2025; Their MFPs will apply in 2027. And the next round will include a total of 15 outpatient and physician-administered drugs, to be selected in February 2026 with MFPs applied in 2028. Starting in 2027, the number of selected drugs—a mix of outpatient and physician-administered medications—can reach 20 per year if a sufficient number meet the selection criteria.
Another major IRA provision designed to reduce the out-of-pocket cost burden for Medicare beneficiaries is a wholesale restructuring of the outpatient pharmacy benefit called Part D, which has already capped the recipient’s annual out-of-pocket costs at 3,300 dollars in 2024 and will decrease further. cap at $2,000 in 2025. At the same time, the Part D redesign will shift the cost burden for high-cost beneficiaries away from the federal government and toward plans that manage the pharmacy benefit and specialty pharmaceutical product manufacturers.
Other key measures implemented under the IRA include a $35 per month cap on out-of-pocket costs for insulin products for all Medicare beneficiaries. This went into effect in 2023. And the law provides for free vaccines for the elderly and disabled starting in 2024.
Looking ahead, Harris has pledged on the campaign trail to extend to commercial insurance the $2,000 cost limit for outpatient drugs and out-of-pocket insulin costs of up to $35 a month.
Harris also wants to expand the scope of Medicare drug price negotiations, in line with what the White House outlined earlier this year when it sought to significantly increase the number of drugs subject to Medicare price negotiations to 50 in year, up from 20, starting in 2028. The budget plan released by the White House would build on the IRA, which currently allows Medicare to negotiate prices for up to 140 cumulatively through 2033. The proposal would potentially double total ones, up to 300 by 2033.
Increasing the number of drugs eligible for price negotiation would be accomplished by allowing Medicare selection of drugs to occur more quickly, that is, as soon as five years after the drugs are approved by the Food and Drug Administration. Small-molecule drugs are currently exempt from selection for negotiation for seven years after approval, while biologics or large-molecule pharmaceuticals have an 11-year exclusivity period.
Both extending certain out-of-pocket cap provisions to the commercial sector and expanding Medicare drug price negotiations would require Congressional support. They cannot be made under existing authority given by the IRA. Harris would need Congress to either pass a change in the law or create a separate piece of legislation.
The possibility of Congressional action depends, of course, on the results of the House and Senate elections. And even if Democrats were to win a (slight) majority in the House and retain their slim edge in the Senate, it’s far from clear that there would be enough political support for the kinds of changes Harris has called for. in the IRA. .
As a reminder of how difficult it was to pass the IRA as currently constituted, a small group of moderate House Democrats expressed concerns in 2021 about allowing Medicare to negotiate drug prices. In an earlier iteration of the IRA called Build Back Better, they voted against such negotiations that would have included a total of up to 250 drugs by 2032. A compromise was eventually reached in which a total of no more than 140 would to be subject to negotiations.
So while Harris campaigns on some of the current administration’s achievements, particularly around reducing the out-of-pocket cost burden for Medicare beneficiaries, even if her quest to expand IRA drug pricing measures is approved, it could hit hurdles in Congress.