Medicare Beneficiaries: How Joe Biden Could Lower Your Drug Costs

Money

$500 Average Savings!

Medicare World can easily save you half a grand or more on your healthcare expenses!

$500 Average Savings!

Joe Biden is set to take office in less than a month and the President-elect has a few important things on the table waiting for him. He announced his nominations for his coronavirus task force and most of his seats on his healthcare team, but now there are larger tasks at hand. Reducing prescription drug prices has been a hot topic in politics for some time now. In fact, a large part of President Trump’s 2016 campaign was focused on lowering drug prices and now he is about to leave the oval office with a few unfulfilled promises. 

Biden now has the opportunity to make a change in the pharmaceutical industry. We know Biden’s healthcare agenda, but experts are skeptical there will be significant action to rein in drug costs over the next few years.

Prescription drug price problems

  1. The actual list prices set by drug companies, which most patients and health systems don’t actually pay, but still set the top line from which various discounts and rebates are applied. (And for the uninsured, that is their price unless they get some kind of assistance.) List prices are more difficult to control, without the more aggressive kind of price-setting that pharma and many lawmakers would balk at. 
  2. Out-of-pocket costs, or what patients must pay under their insurance plan, are way too high. That may be easier to fix; it’s just a matter of finding the money to improve, for example, the Medicare drug benefit so patients have smaller obligations when they fill a prescription.

Biden’s plan

Biden’s healthcare agenda is looking a little packed at the moment. Alongside dealing with the pandemic, the President-elect will have to decide how much to prioritize drug pricing alongside improving Obamacare and reversing some of Trump’s actions on Medicaid. Here are a few directions Biden’s team could take:

A) Biden’s team could reevaluate the referencing drug pricing model, but refine it to make it less administratively complex.

B) They could also shift the focus from automatic price controls to an independent review board that would take the foreign prices into account while setting its own recommended prices for Medicare.

C) Biden could also revisit the Obama administration’s plan to change how Medicare pays physicians for certain drugs, which was introduced too late to be fully implemented before Obama and Biden left office.

The current state of things

The Trump health department has been said to be working on drug prices. They have authorized drug importation from other countries and released several proposals to bring American drug prices more in line with other countries. One can only notice the lack of follow-through and also that these reforms have come at the tail end of President Trump’s time in office as if they were never taken very seriously.

“Despite the Trump Administration’s failure to implement its most ambitious drug pricing policy goals, the administration’s rhetoric has been successful in normalizing and making the case for these bold reforms,” Rachel Sachs, a law professor at Washington University in St. Louis, wrote in Health Affairs.

The trouble with their lack of follow-through means the Biden administration will largely be left to decide whether to pick up Trump’s policies and run with them or start from scratch on their own. Experts are skeptical that Biden will continue with any of Trump’s prescription drug reforms.

Get Quote
Get Quote

Potential new bill could fix things

A bipartisan bill introduced last year by Sens. Chuck Grassley (R-IA) and Ron Wyden (D-OR) and passed out of the Senate Finance Committee could be the initial template for drug pricing legislation under the Biden administration. If Senate Republicans and Senate Democrats can agree on the bill, that could potentially add more pressure on the House to come to an agreement.

The bill would essentially penalize drug companies for any price hikes that are higher than inflation. This would require them to pay rebates to the Medicare program to make up the difference. 

For Medicare beneficiaries, the Finance Committee’s legislation would also redesign Medicare Part D benefits and cap patients’ out-of-pocket obligations at no more than $3,100 a year (and many would pay far less than that). The Congressional Budget Office projected that the bill could save beneficiaries a combined $20 billion over 10 years.

Will we ever stop spending so much on prescription drugs?

Healthcare activists remain to push for reforms in the pharmaceutical industry. The US public still wants drug affordability addressed, especially Medicare beneficiaries. But the priority of drug costs has been shifted with the urgency of developing the coronavirus vaccine. 

Experts have lowered their expectations about significant reforms happening any time soon, even though many Americans are still struggling to afford the medications they need during this economic crisis.

“If there is anything that this pandemic should have taught us, it’s that something should be done. We shouldn’t allow ourselves to think it’s not possible,” said Dana Brown with Democracy Collaborative. “Can we literally afford the status quo? For me, the answer is no.”

Democracy Collaborative’s mission is “to help catalyze a moral and political transformation of the US political economy into a next system that is inclusive, just, and ecologically sustainable—in contrast to today’s amoral economy of financial extraction.”

Cigna

Find a Medicare Plan Near You!

Speak to a licensed broker who can help you look for plans.

Cigna

Find a Medicare Plan Near You!

Speak to a licensed broker who can help you look for plans.

Up Next...

blog image

Medicare World Blog

SEE ALL POSTS