Loading...
Blog2019-11-06T16:57:30-04:00
1208, 2022

House Passes Historic Prescription Drug Pricing Legislation

By |August 12th, 2022|Congress, Democrats, Medicare, Medicare Drug Coverage and Costs, Medicare Part D and My Current Drug Coverage, Prescription Drug Prices, President Biden|

The U.S. House today passed historic legislation to bring down prescription drug prices for tens of millions of American seniors. The Inflation Reduction Act, which the Senate passed last weekend after intense negotiations between Senate Majority Leader Chuck Schumer and West Virginia Senator Joe Manchin, now goes to President Biden’s desk for signature.  It is the most sweeping health care legislation since the enactment of the Affordable Care Act in 2010.  Seniors’ advocates cheered the House vote after decades of battling to bring soaring prescription drug prices under control, especially for seniors in the Medicare Part D program:

“Today’s House passage of The Inflation Reduction Act will deliver meaningful price relief to Medicare beneficiaries who have been struggling to afford their essential medications while Big Pharma’s profits soared. Seniors and their advocates have been battling skyrocketing prescription drug prices for decades — while the drug industry lobby has spent billions of dollars to defeat any attempt at reducing consumer costs.  Commonsense legislation to contain runaway drug prices may be a bitter pill for Big Pharma, but it’s one Congress says the industry will have to swallow.” – Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare, 8/12/22     

Under this bill, Medicare will finally be empowered to negotiate prices for certain high-cost medications with drug-makers, similar to what the VA health care system has been doing for years. The bill reverses an insidious provision in the 2003 Medicare Modernization Act forbidding the Medicare program from negotiating prices with manufacturers. When prices are negotiated, the exorbitant costs of life-saving medications for conditions like heart disease and cancer should finally come down, providing much-needed relief to seniors’ pocketbooks — and saving Medicare $288 billion over ten years.   

The bill also makes drugs more affordable by capping Medicare Part D patients’ out of pocket costs at $2,000 per year. This will be of enormous help to beneficiaries on fixed incomes who have been rationing or skipping medications altogether because of cost, sometime with fatal consequences.  Likewise, for millions of Medicare beneficiaries living with diabetes, the bill caps the cost of insulin at $35 per month at a time when retail prices can range from $300-$1,000.

Thanks to the Inflation Reduction Act, drug-makers no longer will able to hike prescription prices at will with impunity. Among other provisions, the legislation requires drug companies to rebate to the government the amount by which drugs used under Medicare Part B and D rise faster than inflation.

“On behalf of our millions of members and supporters across the country, we commend the House majority who voted to pass this bill in the face of formidable pressure from Big Pharma — and we congratulate President Biden for his leadership to deliver on his pledge to lower drug prices. This is a historic win for all Americans.” – Max Richtman


908, 2022

Prescription Drug Price Reform of Historic Proportions

By |August 9th, 2022|Congress, Democrats, Don't Cut Pills Cut Profits, Max Richtman, Medicare, Prescription Drug Prices, President Biden, Senate, Trump|

Those who refer to the Inflation Reduction Act passed by the Senate this past weekend as “historic” are not exaggerating. The Act represents the most muscular legislation to date to try to tame rising prescription drug prices, which can be devastating for seniors.  The legislation still must be passed by the House and signed into law by President Biden, but it is unlikely to materially change.  Among other measures, the Inflation Reduction Act: 

*Empowers Medicare to negotiate prices with drug-makers

*Caps Medicare Part D patients’ annual out-of-pocket payments at $2,000

*Caps the cost of insulin for Part D patients at $35/month

*Penalizes drug-makers for raising prices above the rate of inflation

Though the bill does not contain everything that advocates (and many Progressives) had hoped, these provisions represent meaningful reform that can change lives for the better by taming drug prices. Its most historic aspect is the drug price negotiation provision – more modest than originally envisioned, but still extremely significant. At first, only ten drugs will be eligible for negotiations, and new brand-name drugs are excluded. Negotiated prices will not take effect until 2026. But Big Pharma opposed even these modest measures, unleashing its multi-billion dollar campaign contribution and lobbying machine against the Democrats’ plans.

Prescription drug price negotiation by the Medicare program was explicitly forbidden by the Medicare Modernization Act of 2003 – the law that created Part D drug coverage. It took advocates almost two decades to reverse that provision, even though the VA system has been successfully negotiating prices with Big Pharma for years.

“This is like lifting a curse,” Senator Ron Wyden, Democrat of Oregon and the architect of the measure, said of the Medicare negotiation provision. “Big Pharma has been protecting the ban on negotiation like it was the Holy Grail.” – New York Times, 8/05/22

NCPSSM President and CEO Max Richtman (who was Executive Vice President of the organization back in 2003) remembers when the ban against price negotiation was dropped into the Medicare Modernization Act.

“The provision literally was inserted in the middle of the night, after Big Pharma reached a deal with congressional Republicans. The industry essentially said, ‘We can live with the new Part D drug benefit, but not with prescription drug price negotiation.’ We in the advocacy community have been trying to undo that ever since.” – Max Richtman, NCPSSM President and CEO

Richtman says that the chair of the House Energy and Commerce Committee, Rep. Billy Tauzin (R-LA), was the prime mover of the negotiation ban in Congress. “He carried the water for Big Pharma,” Richtman remembers. Tauzin retired from Congress in January, 2005. The day after his term ended, he took over as head of PhRMA, the drug industry’s powerful lobbying group.

Up until now, Big Pharma’s outsize influence on Capitol Hill was able to keep efforts toward prescription drug pricing reform at bay. According to the New York Times, the industry has spent more than $5.2 billion on lobbying since 1998. “The insurance industry, the next biggest spender, spent $3.3 billion,” reports the Times, which says that Big Pharma splits its lavish campaign contributions roughly equally between Republicans and Democrats.

So what changed?  How is Congress finally able to move prescription drug pricing reform across the finish line? For one thing, the average price of brand name prescription drugs in Medicare Part D more than doubled between 2009 and 2018, outraging the public and advocates alike. During the subsequent two years, price hikes outstripped inflation for half of all drugs covered by Medicare.  Because seniors’ incomes have not increased anywhere near that much since 2009, older Americans have been especially squeezed by the cost of their essential medications – causing many to ration prescription drugs or skip them altogether.

Secondly, advocacy organizations like NCPSSM intensified their efforts to call attention to soaring drug prices and demand congressional action. In 2019, the National Committee launched a campaign, Don’t Cut Pills, Cut Profits, emphasizing public education and outreach (including town halls with members of Congress) to move the needle on this issue. Seniors’ groups continued to press for drug price reform in the ensuing three years.

Reform efforts gained steam after the 2018 midterm elections, when Democrats re-took control of the U.S. House. In 2019, the House passed the Elijah Cummings Lower Drug Costs Now Act (H.R. 3), which included prescription drug price negotiation and other provisions to knock down prices. With Republicans still in control of the Senate and Donald Trump in the White House, that legislation stalled.  (President Trump had promised to lower drug prices but favored weak executive actions over meaningful legislation.)

The election of President Joe Biden – and the Democrats’ seizing control of the Senate in 2020 – proved to be pivotal in the campaign for prescription drug price reform. President Biden came to office pledging to lower drug prices… and meant it.  His Build Back Better (BBB) plan, enacted by the House in 2021, contained many of the same provisions that Senate approved last weekend. Sen. Joe Manchin (D-WV), who effectively blocked the Build Back Better plan in the Senate, finally reached a deal with Democratic Leader Chuck Schumer (D-NY) this summer, acceding to drug price negotiation and other reforms as part of the new Inflation Reduction Act.

In other words, after decades of advocacy, the stars finally aligned for prescription drug price reform. HHS Secretary Xavier Becerra, who fought for reform when he was a member of Congress, summed up the driving principle behind the new legislation. “No one should have to go without health care or a prescription they need because they can’t afford it,” he said upon Senate passage of the bill.

“This is like lifting a curse,” says Sen. Ron Wyden of the Medicare price negotiation provision

Of course, that hasn’t stopped Republicans from decrying the legislation, claiming that it will stifle innovation in the pharmaceutical sector. None other than Senator Rick Scott (R-FL), who as chair of the National Republican Senatorial Campaign Committee proposed to ‘sunset’ federal laws like Social Security and Medicare after five years, was on CBS Face the Nation last Sunday trashing the bill.  Scott called the legislation “a war on Medicare” and claimed that the projected $288 billion in savings from drug price negotiation amounted to a cut that would harm seniors. (The savings actually will be used to extend Affordable Care Act premium subsidies for working and middle-class Americans.)\

NCPSSM director of government relations and policy Dan Adcock calls Scott’s remarks “disingenuous.” “Medicare beneficiaries will not see a dime cut from their benefits,” says Adcock. As for the claims that price negotiation will affect innovation, Adcock points out that Big Pharma receives generous government subsidies for research and development, along with huge tax breaks. “Drug industry profit margins are 15-19%. Most Fortune 500 companies are lucky to get 9%,” says Adcock. “Big Pharma spends much more on marketing and advertising than they do on R&D.”

Indeed, the industry continues to run dishonest television ads opposing the Inflation Reduction Act, painting Democrats as endangering Medicare (by lowering their drug prices!).  This time, it probably won’t work. Democrats are sticking to their guns. Not a single Republican will vote for it, but the bill will likely pass the House at the end of this week and move to the President’s desk for his signature. History will be made, despite the industry’s fierce efforts to thwart reform. As Max Richtman puts it, “This is a huge win that will put money back in the pockets of American seniors.”


508, 2022

Ron Johnson’s Plan is Part of GOP Assault on Seniors’ Earned Benefits

By |August 5th, 2022|Congress, Democrats, Medicare, Republicans, Senator Mitt Romney, Social Insurance, Social Security|

Wikimedia Commons

Social Security and Medicare defenders often say that the public doesn’t understand the threat that Republicans pose to these programs.  Indeed, many Republicans proclaim support for both while pushing proposals to undermine them.  But lately it seems as if Republicans are going out of their way to lay bare their intentions – or, as some put it, “to say the quiet part out loud.” 

Earlier this week, Senator Ron Johnson (R-WI) said during an interview that Social Security and Medicare should no longer be mandatory spending programs. Instead, he said, they should be considered “discretionary spending” and subject to routine budget negotiations every year.  This, of course, violates the basic principles of social insurance, where workers pay into the system now in order to collect guaranteed benefits later.  Leaving those benefits to the “discretion” of Congress every fiscal year would break the fundamental promise of Social Security and Medicare. 

It’s little wonder, then, that Sen. Johnson’s proposal attracted a lot of media attention – and probably not the kind that he wanted.  Here are just a few of the headlines:  

Ron Johnson aims to put Social Security on the chopping block, White House says. (Truthout) 

Lt. Governor Slams ‘Self-Serving, Multimillionaire’ Ron Johnson for Attack on Social Security, Medicare (Salon) 

Chris Wallace calls Ron Johnson’s Social Security, Medicare idea ‘suicidal politics’ (The Hill) 

Sen. Johnson suggests ending Medicare, Social Security as mandatory spending programs (Washington Post) 

As these two landmark social insurance programs mark their anniversaries this summer (Medicare on July 30th and Social Security on August 14th), Republicans are piling up proposals that could weaken or outright end them. Sen. Johnson’s is merely the latest in a series of really bad ideas. (See Sen. Rick Scott’s proposal to sunset Social Security and Medicare after five years — or Sen. Mitt Romney’s TRUST Act, for starters.) This is not a surprise, as most Republicans opposed Social Security and Medicare when they were enacted in 1935 and 1965, respectively – and have been hoping to undo or privatize both programs for decades. 

Sen. Johnson surely is no friend to Social Security and Medicare, having called the former “a Ponzi scheme” just last year.  His Democratic opponent in the fall mid-terms, Wisconsin Lt. Governor Mandela Barnes, wasted no time calling Johnson out for his latest proposal: 

“Barnes slammed Sen. Ron Johnson as a ‘self-serving, multimillionaire’ after the sitting Republican from Wisconsin called for making both Social Security and Medicare discretionary programs—a reform that would pave the way for the GOP to realize its half-century-long dream of dismantling two of the nation’s most essential and popular social programs.” 

The White House, too, was quick to respond to Sen. Johnson, tweeting: 

“Congressional Republicans like Senator Ron Johnson want to put Social Security and Medicare on the chopping block…That would devastate families.” – White House tweet, 8/2/22 

None other than former FOX News anchor Chris Wallace excoriated Johnson during an interview on CNN: 

Social Security is not money that is just handed out to Americans. ‘Hey, here’s some free money.’ We pay into Social Security. We pay into Medicare. It’s, in effect, an insurance policy. Nobody would say, ‘You’re not entitled to the benefit for a life insurance when the person who has the policy dies.’ We have been paying into the system for years.”

Wallace called Johnson’s plan “suicidal politics.”  That seems like a fair characterization given that Social Security and Medicare are incredibly popular. In poll after poll, overwhelming majorities say they want to see both programs protected and expanded, not cut and privatized.  

“Both programs were first introduced in order to provide a crucial social safety net for seniors, disabled people and other vulnerable populations; Social Security… has allowed millions of people to retire and avoid poverty. Medicare has saved countless lives, and experts say that cutting it would be disastrous.” – Truthout, 8/3/22 

By continuing to push proposals that undermine the very nature of Social Security and Medicare, Republicans are gambling that the public will be fooled or simply not care.  Heading into this fall’s mid-term elections, all workers and retirees should make sure they know not just what their candidates say about these programs, but what they actually propose to do.  Republicans – who hope to retake both houses of Congress in November – are making their destructive agenda increasingly apparent to anyone who is listening.  


2907, 2022

Much for Seniors to Cheer, Big Pharma to Jeer, in Senate Rx Deal

By |July 29th, 2022|Congress, Democrats, Medicare, Medicare Drug Coverage and Costs, Prescription Drug Prices, Senator Joe Manchin|

News of a deal between Senators Joe Manchin and Chuck Schumer for a broader reconciliation package including climate, inflation, and prescription drug reform measures is good for seniors. All three issues touch older Americans’ lives, though the health care provisions in the new deal are not radically different than the ‘skinnier’ version that the two Senators agreed upon earlier this month.

The measures that most directly help seniors in the current deal are:

*Empowering Medicare to negotiate the price of certain medications with Big  Pharma 

*A $2,000 cap on out-of-pocket costs for Medicare Part D beneficiaries 

*Rebates to be paid by drug companies if they raise prices higher than the rate of inflation 

While the latest reconciliation bill is far less ambitious than the original Build Back Better plan that took shape in 2021 (until Senator Manchin withdrew his support), these improvements for seniors are no small matter. In fact, advocates have been fighting for prescription drug price reform for years.

Most importantly, the bill would undo one of the most objectionable provisions of the legislation that created the Medicare Part D drug benefit back in 2003:  the law actually forbade the government from negotiating prices with drug makers. Ever since then, the National Committee has been urging Congress to allow drug price negotiation.  This legislation represents the first potential piercing of the barrier erected by the 2003 law.

While the number and type of drugs whose prices would be negotiated is limited in the new bill, the measure is “the camel’s nose under the tent” that seniors’ advocates have been looking for. And that is why Big Pharma has vigorously opposed any price negotiation with Medicare, no matter how limited.

“The industry is frightened by this (potential) cracking of the ceiling allowing at least some price negotiation when the law has forbidden it since 2003.  That’s a long way to come in 20 years.” – Maria Freese, senior policy analyst at the National Committee to Preserve Social Security and Medicare, 7/29/22  

The out-of-pocket cost cap for Medicare Part D beneficiaries would also be a significant step. Some seniors with serious health conditions (both chronic and acute) currently face exorbitant out-of-pocket prescription drug costs. Nearly 1 in 4 Americans say they have problems affording their medications.

“Today, there is no cap on spending for prescription drugs seniors buy from pharmacies. This proposal ensures that devastating diagnoses, like cancer, will never again mean paying tens of thousands out of pocket for just one drug.” – Senate Democrats, 7/28/22  

Capping those out-of-pockets to $2,000 per year, as the proposed reconciliation bill does, would be another big win for older Americans – along with penalizing Big Pharma for hiking prices higher than the rate of inflation.

The Senate is expected to vote on the reconciliation bill during the week of July 31st,, providing that it passes muster with the Senate parliamentarian and that there are no objections from any Democratic Senators.  The House may return to take up the bill in mid-August. Of course, success has seemed to be at hand in the past, only to have a deal collapse at the last minute. Time for action is running short.

“Democrats know that this bill is probably the only one they’ll be able to pass over Republicans’ objections, potentially for the rest of Biden’s presidency, if Republicans take back one or both chambers of Congress this fall.” – Washington Post, 7/29/22 

There is some incidental symbolism to the timing of the new bill, as well.  The Medicare program turns 57 years old on July 30th. As our president and CEO, Max Richtman writes in Common Dreams, with zero Republican support for the reconciliation bill, it falls to Democrats to improve Medicare, one of the party’s most significant legacies. “As we mark this 57th anniversary, let’s re-commit to protecting (and expanding) this tremendous pillar of the Great Society.”


1507, 2022

Manchin Pulls the Football Away from Schumer – and Medicare

By |July 15th, 2022|Congress, Democrats, Medicare, Prescription Drug Prices, Senate, Senator Joe Manchin|

Wikimedia Commons

***The following is an update of our blog post from Wednesday, July 13, 2022***

Senator Joe Manchin has once again pulled the proverbial football away from Chuck Schumer just before the kick. After negotiating with the Senate Majority Leader over a pared-back version of the Build Back Better bill, Sen. Manchin has withdrawn his support – not for the entire plan, but for key components that would have strengthened Medicare. He declared on Thursday that he would not support any new tax provisions.  One of these provisions would have closed a loophole, compelling the wealthy to pay a 3.8% investment tax.  The revenue from this new iteration of the legislation would have been directed to the Medicare Part A trust fund, which is currently projected to run dry in 2028.  This extra tax revenue would have kept the trust fund solvent for at least another decade from now. The main part of what’s left of Build Back Better (the part that Senator Manchin has not withdrawn his support for, at least not yet) is empowering Medicare to negotiate prescription drug prices with Big Pharma. 

The negotiations between Senate Majority Leader Chuck Schumer and Senator Joe Manchin (D-WV) over a new budget reconciliation deal have been great fodder for political journalists, but they are also incredibly important to American seniors.  Senators Schumer and Manchin are haggling over a pared-down version of the Build Back Better legislation, which the West Virginia Senator effectively killed earlier this year, designed to pass with only Democratic votes via the reconciliation process. The new package reportedly retains a crucial item for older Americans:  prescription drug pricing reform.

According to press reports, the Schumer-Manchin deal finally would allow Medicare to negotiate prescription drug prices with Big Pharma – a marquee provision of the old Build Back Better plan. Drug price negotiation could save the Medicare program some $288 billion over ten years and exert downward pressure on prescription prices in general. This would be welcome news for seniors on fixed incomes who are skipping medications because of prohibitive costs.

“Under the Drug Price Negotiation Program (DPNP) that would be established in the Senate proposal, beginning in 2023, the secretary of health and human services would be required to negotiate lower prices for 10 of the most expensive drugs that lack market competition, with these prices going into effect in 2026. The number of drugs would increase to 20 by 2029.” – Center for American Progress, 7/12/22 

The reconciliation bill reportedly also would cap Medicare Part D beneficiaries’ out-of-pocket drug costs at $2,000 per year.  Currently, there is no limit on how much Medicare patients – whose median annual income is $26,000 – must pay out of pocket for prescriptions.  The Schumer-Manchin deal would go further, requiring drugmakers to pay rebates for any price hikes exceeding the rate of inflation. “Just this year, some drug companies increased prices upward of 16 percent (more than double the rate of inflation), making already expensive drugs even more unaffordable,” observes the Center for American Progress.

None of this is certain.  Senator Manchin signaled agreement with the Build Back Better plan throughout the past year, only to withdraw his support at the last minute.  The current negotiations – which Senator Schumer is conducting virtually during his COVID isolation in Brooklyn – could fall apart at any time. Manchin told Politico, “(Senator Schumer) knows exactly where I’m at. Now whether (the Democrats) can get there or whatever, we’ll see.”

The deal reportedly taking shape is not nearly as ambitious or sweeping as Build Back Better, which would have expanded Medicare to cover basic hearing care. But seniors’ advocates, including NCPSSM, will gladly accept a partial victory that includes the long-sought goal of prescription drug price negotiation.  As the Center for American Progress so aptly put it, “After decades of inaction, Congress cannot let this effort for reform simply come and go.”

 


House Passes Historic Prescription Drug Pricing Legislation

By |August 12th, 2022|Congress, Democrats, Medicare, Medicare Drug Coverage and Costs, Medicare Part D and My Current Drug Coverage, Prescription Drug Prices, President Biden|

The U.S. House today passed historic legislation to bring down prescription drug prices for tens of millions of American seniors. The Inflation Reduction Act, which the Senate passed last weekend after intense negotiations between Senate Majority Leader Chuck Schumer and West Virginia Senator Joe Manchin, now goes to President Biden’s desk for signature.  It is the most sweeping health care legislation since the enactment of the Affordable Care Act in 2010.  Seniors’ advocates cheered the House vote after decades of battling to bring soaring prescription drug prices under control, especially for seniors in the Medicare Part D program:

“Today’s House passage of The Inflation Reduction Act will deliver meaningful price relief to Medicare beneficiaries who have been struggling to afford their essential medications while Big Pharma’s profits soared. Seniors and their advocates have been battling skyrocketing prescription drug prices for decades — while the drug industry lobby has spent billions of dollars to defeat any attempt at reducing consumer costs.  Commonsense legislation to contain runaway drug prices may be a bitter pill for Big Pharma, but it’s one Congress says the industry will have to swallow.” – Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare, 8/12/22     

Under this bill, Medicare will finally be empowered to negotiate prices for certain high-cost medications with drug-makers, similar to what the VA health care system has been doing for years. The bill reverses an insidious provision in the 2003 Medicare Modernization Act forbidding the Medicare program from negotiating prices with manufacturers. When prices are negotiated, the exorbitant costs of life-saving medications for conditions like heart disease and cancer should finally come down, providing much-needed relief to seniors’ pocketbooks — and saving Medicare $288 billion over ten years.   

The bill also makes drugs more affordable by capping Medicare Part D patients’ out of pocket costs at $2,000 per year. This will be of enormous help to beneficiaries on fixed incomes who have been rationing or skipping medications altogether because of cost, sometime with fatal consequences.  Likewise, for millions of Medicare beneficiaries living with diabetes, the bill caps the cost of insulin at $35 per month at a time when retail prices can range from $300-$1,000.

Thanks to the Inflation Reduction Act, drug-makers no longer will able to hike prescription prices at will with impunity. Among other provisions, the legislation requires drug companies to rebate to the government the amount by which drugs used under Medicare Part B and D rise faster than inflation.

“On behalf of our millions of members and supporters across the country, we commend the House majority who voted to pass this bill in the face of formidable pressure from Big Pharma — and we congratulate President Biden for his leadership to deliver on his pledge to lower drug prices. This is a historic win for all Americans.” – Max Richtman


Prescription Drug Price Reform of Historic Proportions

By |August 9th, 2022|Congress, Democrats, Don't Cut Pills Cut Profits, Max Richtman, Medicare, Prescription Drug Prices, President Biden, Senate, Trump|

Those who refer to the Inflation Reduction Act passed by the Senate this past weekend as “historic” are not exaggerating. The Act represents the most muscular legislation to date to try to tame rising prescription drug prices, which can be devastating for seniors.  The legislation still must be passed by the House and signed into law by President Biden, but it is unlikely to materially change.  Among other measures, the Inflation Reduction Act: 

*Empowers Medicare to negotiate prices with drug-makers

*Caps Medicare Part D patients’ annual out-of-pocket payments at $2,000

*Caps the cost of insulin for Part D patients at $35/month

*Penalizes drug-makers for raising prices above the rate of inflation

Though the bill does not contain everything that advocates (and many Progressives) had hoped, these provisions represent meaningful reform that can change lives for the better by taming drug prices. Its most historic aspect is the drug price negotiation provision – more modest than originally envisioned, but still extremely significant. At first, only ten drugs will be eligible for negotiations, and new brand-name drugs are excluded. Negotiated prices will not take effect until 2026. But Big Pharma opposed even these modest measures, unleashing its multi-billion dollar campaign contribution and lobbying machine against the Democrats’ plans.

Prescription drug price negotiation by the Medicare program was explicitly forbidden by the Medicare Modernization Act of 2003 – the law that created Part D drug coverage. It took advocates almost two decades to reverse that provision, even though the VA system has been successfully negotiating prices with Big Pharma for years.

“This is like lifting a curse,” Senator Ron Wyden, Democrat of Oregon and the architect of the measure, said of the Medicare negotiation provision. “Big Pharma has been protecting the ban on negotiation like it was the Holy Grail.” – New York Times, 8/05/22

NCPSSM President and CEO Max Richtman (who was Executive Vice President of the organization back in 2003) remembers when the ban against price negotiation was dropped into the Medicare Modernization Act.

“The provision literally was inserted in the middle of the night, after Big Pharma reached a deal with congressional Republicans. The industry essentially said, ‘We can live with the new Part D drug benefit, but not with prescription drug price negotiation.’ We in the advocacy community have been trying to undo that ever since.” – Max Richtman, NCPSSM President and CEO

Richtman says that the chair of the House Energy and Commerce Committee, Rep. Billy Tauzin (R-LA), was the prime mover of the negotiation ban in Congress. “He carried the water for Big Pharma,” Richtman remembers. Tauzin retired from Congress in January, 2005. The day after his term ended, he took over as head of PhRMA, the drug industry’s powerful lobbying group.

Up until now, Big Pharma’s outsize influence on Capitol Hill was able to keep efforts toward prescription drug pricing reform at bay. According to the New York Times, the industry has spent more than $5.2 billion on lobbying since 1998. “The insurance industry, the next biggest spender, spent $3.3 billion,” reports the Times, which says that Big Pharma splits its lavish campaign contributions roughly equally between Republicans and Democrats.

So what changed?  How is Congress finally able to move prescription drug pricing reform across the finish line? For one thing, the average price of brand name prescription drugs in Medicare Part D more than doubled between 2009 and 2018, outraging the public and advocates alike. During the subsequent two years, price hikes outstripped inflation for half of all drugs covered by Medicare.  Because seniors’ incomes have not increased anywhere near that much since 2009, older Americans have been especially squeezed by the cost of their essential medications – causing many to ration prescription drugs or skip them altogether.

Secondly, advocacy organizations like NCPSSM intensified their efforts to call attention to soaring drug prices and demand congressional action. In 2019, the National Committee launched a campaign, Don’t Cut Pills, Cut Profits, emphasizing public education and outreach (including town halls with members of Congress) to move the needle on this issue. Seniors’ groups continued to press for drug price reform in the ensuing three years.

Reform efforts gained steam after the 2018 midterm elections, when Democrats re-took control of the U.S. House. In 2019, the House passed the Elijah Cummings Lower Drug Costs Now Act (H.R. 3), which included prescription drug price negotiation and other provisions to knock down prices. With Republicans still in control of the Senate and Donald Trump in the White House, that legislation stalled.  (President Trump had promised to lower drug prices but favored weak executive actions over meaningful legislation.)

The election of President Joe Biden – and the Democrats’ seizing control of the Senate in 2020 – proved to be pivotal in the campaign for prescription drug price reform. President Biden came to office pledging to lower drug prices… and meant it.  His Build Back Better (BBB) plan, enacted by the House in 2021, contained many of the same provisions that Senate approved last weekend. Sen. Joe Manchin (D-WV), who effectively blocked the Build Back Better plan in the Senate, finally reached a deal with Democratic Leader Chuck Schumer (D-NY) this summer, acceding to drug price negotiation and other reforms as part of the new Inflation Reduction Act.

In other words, after decades of advocacy, the stars finally aligned for prescription drug price reform. HHS Secretary Xavier Becerra, who fought for reform when he was a member of Congress, summed up the driving principle behind the new legislation. “No one should have to go without health care or a prescription they need because they can’t afford it,” he said upon Senate passage of the bill.

“This is like lifting a curse,” says Sen. Ron Wyden of the Medicare price negotiation provision

Of course, that hasn’t stopped Republicans from decrying the legislation, claiming that it will stifle innovation in the pharmaceutical sector. None other than Senator Rick Scott (R-FL), who as chair of the National Republican Senatorial Campaign Committee proposed to ‘sunset’ federal laws like Social Security and Medicare after five years, was on CBS Face the Nation last Sunday trashing the bill.  Scott called the legislation “a war on Medicare” and claimed that the projected $288 billion in savings from drug price negotiation amounted to a cut that would harm seniors. (The savings actually will be used to extend Affordable Care Act premium subsidies for working and middle-class Americans.)\

NCPSSM director of government relations and policy Dan Adcock calls Scott’s remarks “disingenuous.” “Medicare beneficiaries will not see a dime cut from their benefits,” says Adcock. As for the claims that price negotiation will affect innovation, Adcock points out that Big Pharma receives generous government subsidies for research and development, along with huge tax breaks. “Drug industry profit margins are 15-19%. Most Fortune 500 companies are lucky to get 9%,” says Adcock. “Big Pharma spends much more on marketing and advertising than they do on R&D.”

Indeed, the industry continues to run dishonest television ads opposing the Inflation Reduction Act, painting Democrats as endangering Medicare (by lowering their drug prices!).  This time, it probably won’t work. Democrats are sticking to their guns. Not a single Republican will vote for it, but the bill will likely pass the House at the end of this week and move to the President’s desk for his signature. History will be made, despite the industry’s fierce efforts to thwart reform. As Max Richtman puts it, “This is a huge win that will put money back in the pockets of American seniors.”


Ron Johnson’s Plan is Part of GOP Assault on Seniors’ Earned Benefits

By |August 5th, 2022|Congress, Democrats, Medicare, Republicans, Senator Mitt Romney, Social Insurance, Social Security|

Wikimedia Commons

Social Security and Medicare defenders often say that the public doesn’t understand the threat that Republicans pose to these programs.  Indeed, many Republicans proclaim support for both while pushing proposals to undermine them.  But lately it seems as if Republicans are going out of their way to lay bare their intentions – or, as some put it, “to say the quiet part out loud.” 

Earlier this week, Senator Ron Johnson (R-WI) said during an interview that Social Security and Medicare should no longer be mandatory spending programs. Instead, he said, they should be considered “discretionary spending” and subject to routine budget negotiations every year.  This, of course, violates the basic principles of social insurance, where workers pay into the system now in order to collect guaranteed benefits later.  Leaving those benefits to the “discretion” of Congress every fiscal year would break the fundamental promise of Social Security and Medicare. 

It’s little wonder, then, that Sen. Johnson’s proposal attracted a lot of media attention – and probably not the kind that he wanted.  Here are just a few of the headlines:  

Ron Johnson aims to put Social Security on the chopping block, White House says. (Truthout) 

Lt. Governor Slams ‘Self-Serving, Multimillionaire’ Ron Johnson for Attack on Social Security, Medicare (Salon) 

Chris Wallace calls Ron Johnson’s Social Security, Medicare idea ‘suicidal politics’ (The Hill) 

Sen. Johnson suggests ending Medicare, Social Security as mandatory spending programs (Washington Post) 

As these two landmark social insurance programs mark their anniversaries this summer (Medicare on July 30th and Social Security on August 14th), Republicans are piling up proposals that could weaken or outright end them. Sen. Johnson’s is merely the latest in a series of really bad ideas. (See Sen. Rick Scott’s proposal to sunset Social Security and Medicare after five years — or Sen. Mitt Romney’s TRUST Act, for starters.) This is not a surprise, as most Republicans opposed Social Security and Medicare when they were enacted in 1935 and 1965, respectively – and have been hoping to undo or privatize both programs for decades. 

Sen. Johnson surely is no friend to Social Security and Medicare, having called the former “a Ponzi scheme” just last year.  His Democratic opponent in the fall mid-terms, Wisconsin Lt. Governor Mandela Barnes, wasted no time calling Johnson out for his latest proposal: 

“Barnes slammed Sen. Ron Johnson as a ‘self-serving, multimillionaire’ after the sitting Republican from Wisconsin called for making both Social Security and Medicare discretionary programs—a reform that would pave the way for the GOP to realize its half-century-long dream of dismantling two of the nation’s most essential and popular social programs.” 

The White House, too, was quick to respond to Sen. Johnson, tweeting: 

“Congressional Republicans like Senator Ron Johnson want to put Social Security and Medicare on the chopping block…That would devastate families.” – White House tweet, 8/2/22 

None other than former FOX News anchor Chris Wallace excoriated Johnson during an interview on CNN: 

Social Security is not money that is just handed out to Americans. ‘Hey, here’s some free money.’ We pay into Social Security. We pay into Medicare. It’s, in effect, an insurance policy. Nobody would say, ‘You’re not entitled to the benefit for a life insurance when the person who has the policy dies.’ We have been paying into the system for years.”

Wallace called Johnson’s plan “suicidal politics.”  That seems like a fair characterization given that Social Security and Medicare are incredibly popular. In poll after poll, overwhelming majorities say they want to see both programs protected and expanded, not cut and privatized.  

“Both programs were first introduced in order to provide a crucial social safety net for seniors, disabled people and other vulnerable populations; Social Security… has allowed millions of people to retire and avoid poverty. Medicare has saved countless lives, and experts say that cutting it would be disastrous.” – Truthout, 8/3/22 

By continuing to push proposals that undermine the very nature of Social Security and Medicare, Republicans are gambling that the public will be fooled or simply not care.  Heading into this fall’s mid-term elections, all workers and retirees should make sure they know not just what their candidates say about these programs, but what they actually propose to do.  Republicans – who hope to retake both houses of Congress in November – are making their destructive agenda increasingly apparent to anyone who is listening.  


Much for Seniors to Cheer, Big Pharma to Jeer, in Senate Rx Deal

By |July 29th, 2022|Congress, Democrats, Medicare, Medicare Drug Coverage and Costs, Prescription Drug Prices, Senator Joe Manchin|

News of a deal between Senators Joe Manchin and Chuck Schumer for a broader reconciliation package including climate, inflation, and prescription drug reform measures is good for seniors. All three issues touch older Americans’ lives, though the health care provisions in the new deal are not radically different than the ‘skinnier’ version that the two Senators agreed upon earlier this month.

The measures that most directly help seniors in the current deal are:

*Empowering Medicare to negotiate the price of certain medications with Big  Pharma 

*A $2,000 cap on out-of-pocket costs for Medicare Part D beneficiaries 

*Rebates to be paid by drug companies if they raise prices higher than the rate of inflation 

While the latest reconciliation bill is far less ambitious than the original Build Back Better plan that took shape in 2021 (until Senator Manchin withdrew his support), these improvements for seniors are no small matter. In fact, advocates have been fighting for prescription drug price reform for years.

Most importantly, the bill would undo one of the most objectionable provisions of the legislation that created the Medicare Part D drug benefit back in 2003:  the law actually forbade the government from negotiating prices with drug makers. Ever since then, the National Committee has been urging Congress to allow drug price negotiation.  This legislation represents the first potential piercing of the barrier erected by the 2003 law.

While the number and type of drugs whose prices would be negotiated is limited in the new bill, the measure is “the camel’s nose under the tent” that seniors’ advocates have been looking for. And that is why Big Pharma has vigorously opposed any price negotiation with Medicare, no matter how limited.

“The industry is frightened by this (potential) cracking of the ceiling allowing at least some price negotiation when the law has forbidden it since 2003.  That’s a long way to come in 20 years.” – Maria Freese, senior policy analyst at the National Committee to Preserve Social Security and Medicare, 7/29/22  

The out-of-pocket cost cap for Medicare Part D beneficiaries would also be a significant step. Some seniors with serious health conditions (both chronic and acute) currently face exorbitant out-of-pocket prescription drug costs. Nearly 1 in 4 Americans say they have problems affording their medications.

“Today, there is no cap on spending for prescription drugs seniors buy from pharmacies. This proposal ensures that devastating diagnoses, like cancer, will never again mean paying tens of thousands out of pocket for just one drug.” – Senate Democrats, 7/28/22  

Capping those out-of-pockets to $2,000 per year, as the proposed reconciliation bill does, would be another big win for older Americans – along with penalizing Big Pharma for hiking prices higher than the rate of inflation.

The Senate is expected to vote on the reconciliation bill during the week of July 31st,, providing that it passes muster with the Senate parliamentarian and that there are no objections from any Democratic Senators.  The House may return to take up the bill in mid-August. Of course, success has seemed to be at hand in the past, only to have a deal collapse at the last minute. Time for action is running short.

“Democrats know that this bill is probably the only one they’ll be able to pass over Republicans’ objections, potentially for the rest of Biden’s presidency, if Republicans take back one or both chambers of Congress this fall.” – Washington Post, 7/29/22 

There is some incidental symbolism to the timing of the new bill, as well.  The Medicare program turns 57 years old on July 30th. As our president and CEO, Max Richtman writes in Common Dreams, with zero Republican support for the reconciliation bill, it falls to Democrats to improve Medicare, one of the party’s most significant legacies. “As we mark this 57th anniversary, let’s re-commit to protecting (and expanding) this tremendous pillar of the Great Society.”


Manchin Pulls the Football Away from Schumer – and Medicare

By |July 15th, 2022|Congress, Democrats, Medicare, Prescription Drug Prices, Senate, Senator Joe Manchin|

Wikimedia Commons

***The following is an update of our blog post from Wednesday, July 13, 2022***

Senator Joe Manchin has once again pulled the proverbial football away from Chuck Schumer just before the kick. After negotiating with the Senate Majority Leader over a pared-back version of the Build Back Better bill, Sen. Manchin has withdrawn his support – not for the entire plan, but for key components that would have strengthened Medicare. He declared on Thursday that he would not support any new tax provisions.  One of these provisions would have closed a loophole, compelling the wealthy to pay a 3.8% investment tax.  The revenue from this new iteration of the legislation would have been directed to the Medicare Part A trust fund, which is currently projected to run dry in 2028.  This extra tax revenue would have kept the trust fund solvent for at least another decade from now. The main part of what’s left of Build Back Better (the part that Senator Manchin has not withdrawn his support for, at least not yet) is empowering Medicare to negotiate prescription drug prices with Big Pharma. 

The negotiations between Senate Majority Leader Chuck Schumer and Senator Joe Manchin (D-WV) over a new budget reconciliation deal have been great fodder for political journalists, but they are also incredibly important to American seniors.  Senators Schumer and Manchin are haggling over a pared-down version of the Build Back Better legislation, which the West Virginia Senator effectively killed earlier this year, designed to pass with only Democratic votes via the reconciliation process. The new package reportedly retains a crucial item for older Americans:  prescription drug pricing reform.

According to press reports, the Schumer-Manchin deal finally would allow Medicare to negotiate prescription drug prices with Big Pharma – a marquee provision of the old Build Back Better plan. Drug price negotiation could save the Medicare program some $288 billion over ten years and exert downward pressure on prescription prices in general. This would be welcome news for seniors on fixed incomes who are skipping medications because of prohibitive costs.

“Under the Drug Price Negotiation Program (DPNP) that would be established in the Senate proposal, beginning in 2023, the secretary of health and human services would be required to negotiate lower prices for 10 of the most expensive drugs that lack market competition, with these prices going into effect in 2026. The number of drugs would increase to 20 by 2029.” – Center for American Progress, 7/12/22 

The reconciliation bill reportedly also would cap Medicare Part D beneficiaries’ out-of-pocket drug costs at $2,000 per year.  Currently, there is no limit on how much Medicare patients – whose median annual income is $26,000 – must pay out of pocket for prescriptions.  The Schumer-Manchin deal would go further, requiring drugmakers to pay rebates for any price hikes exceeding the rate of inflation. “Just this year, some drug companies increased prices upward of 16 percent (more than double the rate of inflation), making already expensive drugs even more unaffordable,” observes the Center for American Progress.

None of this is certain.  Senator Manchin signaled agreement with the Build Back Better plan throughout the past year, only to withdraw his support at the last minute.  The current negotiations – which Senator Schumer is conducting virtually during his COVID isolation in Brooklyn – could fall apart at any time. Manchin told Politico, “(Senator Schumer) knows exactly where I’m at. Now whether (the Democrats) can get there or whatever, we’ll see.”

The deal reportedly taking shape is not nearly as ambitious or sweeping as Build Back Better, which would have expanded Medicare to cover basic hearing care. But seniors’ advocates, including NCPSSM, will gladly accept a partial victory that includes the long-sought goal of prescription drug price negotiation.  As the Center for American Progress so aptly put it, “After decades of inaction, Congress cannot let this effort for reform simply come and go.”

 



Go to Top