We pay more for prescription drugs than any other major economy in the world.
And unlike other parts of the healthcare system, big Pharma got a special carve out
that stopped Medicare from negotiating prices of drugs through Medicare.
But this is finally, finally we had enough votes by matter one to beat Big Pharma.
Well, we did it.
>> [APPLAUSE] >> Speaker 2: Did you?
Not really, so a provision in the Inflation Reduction Act
gives Medicare the ability to negotiate the price of 10
pharmaceutical drugs, 10 that's the restriction.
There's another part of that restriction, by the way,
they can start the negotiations beginning in 2026.
Now, due to the conditions of that bill, due to the terms of that legislation,
it might not have as much teeth as we previously thought.
And to be sure, I previously thought that the watered down
Medicare drug negotiation provision was pretty damn weak.
Now, the selected drug list for the first round of
negotiations goes as follows there's Eliquis,
there's Jardiance, Xarelto, Januvia, Farxiga,
just great names, Entresto and Enbrel, Imbruvica,
Stelara and multiple Novo Nordisk insulins.
Okay, so those are the first round of drugs that will be negotiated, and
it turns out that hypothetically, this would help out a lot of Americans.
That's what Democrats have been kind of campaigning on,
that's what Biden was bragging about in that video that you just saw.
But that's not necessarily the case, so
let's go to the next video and then I'll explain.
>> Speaker 3: Catherine Bristol's diabetes medication costs up to $200 a month,
she says sometimes that means she can't afford to buy groceries.
>> Speaker 2: I shouldn't have to choose between my medicine to keep me
not going blind, not eating or dipping into my rent.
>> Speaker 3: Bristol takes Januvia, one of ten drugs that could
be cheaper after negotiations between the government and drug manufacturers.
They are used to treat a range of illnesses, including heart failure,
blood clots and arthritis.
A new report shows about 9 million seniors in Medicare's prescription drug
program used one or more of the drugs last year, paying $3.4 billion out of pocket.
>> Speaker 2: So as you can see from that video, this is a serious problem.
So a lot of Americans could stand to benefit from these particular
drugs basically being negotiated for
lower prices specifically for Medicare patients, right.
That's what the provision entails, but nonetheless, still some positive benefits,
even though it is a limited number of drugs and
it only has to do with the Medicare system, okay, fine.
But even though some drug companies have challenged this in the courts, big
Pharma isn't actually really worried about these drugs being negotiated, why is that?
Well, as David Dayen over at the American Prospect reports, the day that the Biden
administration revealed the first ten drugs under its Medicare price negotiation
process, the companies that own and market those drugs saw their stock prices go up.
Today is a nonevent, said one industry analyst, and
part of the reason is because the actual negotiated prices
won't take effect until 2026, so what does that mean?
It means that there will be some generic options available by that time.
So negotiating for lower drug prices is kind of moot at that point,
I didn't think about that when the provision first passed.
When the provision first passed, the only thing I could think about is how pathetic
it is that we live in a system that won't allow for
Medicare to simply negotiate all drug prices with pharmaceutical companies.
But it's even worse than that, since it won't take effect until 2026,
a lot of these drugs were already going to have a generic option available.
Okay, so the provision effectively does little, okay, so
as David Dayen reports, according to the Inflation Reduction Act,
drugs eligible for price negotiation must be single source.
In other words,
they must be essentially a monopoly product without generic competition.
If a drug gets that competition between the time of being selected for
negotiation and the time the new prices take effect,
that drug drops out of the negotiation program.
Because why would you need to negotiate, there's cheaper options available,
Medicare is going to go for the generic cheaper options, right?
Now, the drugs must also be among the 50 highest
expenditures under Medicare Part D.
And under the rules of the law, the administration cannot,
cannot select another drug to get the number back up to ten.
All that means that the ten drugs being negotiated
could be whittled down to eight or six or even fewer.
Which makes me wonder how intentional was it when they decided
that the drug lower drug prices would go into effect in 2026?
Seems like that was intentional.
And when they chose these ten drugs, did they not look at the patents for
these drugs to figure out when the patents run out and
when other companies can put out generic versions of the drugs?
Were they really that ignorant that they didn't look into that and
maybe consider the ramifications of choosing drugs that by 2026
would have generic versions available, isn't that amazing?
I mean, the games that members of Congress play, including the Democrats,
and I really, really want to drive that point home, right?
This was policy championed by the Democratic Party, the party that wants you
to believe that they're looking out for the little guy, the party that would have
you believe that they are concerned about health care costs.
They are concerned about ordinary Americans who are unable
to afford the pharmaceutical drugs they need to live good lives,
healthy lives, to live it all, in some cases.
Behind the scenes as they're doing their wheeling and dealing, not only do they
water down policy that they initially pretended like they wanted to fight for,
the policy they ended up passing was more than just watered down.
It's beyond ineffective, and I can't help but feel that it was on purpose,
look, that's my speculation, but come on, come on.
The government with all their resources,
how is it that they chose these specific drugs without looking into their patents?
Now, to be clear, whether those drugs get cheaper through the Medicare negotiations,
or through generic options being available,
it won't matter much to the actual consumer, right, to the actual patient.
Because the point is the drugs will be cheaper and that's overall a good thing.
But my point is the drugs would have been cheaper without the policy because
the generic versions would be available.
So they should have chosen other drugs to make up their ten drug,
the ten drugs that the Medicare system can begin negotiating.
And since the administration is by law not allowed to select additional drugs for
the 2026 negotiations, the impact of the legislation again is even weaker
than it originally seemed, and originally it seemed pretty damn weak.
The Centers for Medicare and Medicaid Services cannot select a drug for
negotiation until get a load of this, seven years after its launch for
small molecule drugs and up to 11 years after launch for so called biologics.
In the future, this will incentivize higher launch prices, so drug companies
can make back their investment early before the government can react.
I'm just going to pause to let the pain fade a little bit before I continue.
So in other words, the policy might actually end up being a net negative
because pharmaceutical companies might price gouge, and look,
pharmaceutical companies are allowed to price gouge, right?
I mean, what option do you have as a patient if you need a particular drug
to survive to live?
You might go bankrupt, but
you're going to do what it takes to get your hands on that medication.
And pharmaceutical drugs or pharmaceutical companies that make these drugs are going
to take full advantage of that,
they've already been taking full advantage of that.
And now peering into the future, they know that there's a possibility that
the Medicare system would want to negotiate for lower drug prices and
they'll just price gouge in the front end and deal with the situation that way.
I mean, it is just a complete nutter disaster, if ever there was an argument
in favor of reining in our privatized healthcare model,
this is a perfect story to show you exactly why it needs to happen.
And since drugs with competitive generics cannot be considered for negotiation,
I mean, why would they be considered, they have generic options?
One tactic the drug companies could use is to invite faux competition.
So a generic alternative that isn't heavily marketed or
priced aggressively in order to ward off negotiation.
So Steve Knievel, an advocate with Public Citizens Access
to Medicines Program says this, let's take a look.
He says quote, CMS is being very clear in articulating that they
will be critical about ensuring that bona fide marketing is actually taking place.
CMS won't consider it sufficient just for a product to have a generic or
biosimilar that has received approval from the FDA, but
it's not actually exactly clear what CMS considers bona fide marketing.
So let's look at the drugs currently on the negotiation list that may be
irrelevant by the time we hit 2026.
So there's Stelara, which, by the way,
currently costs about $119,951 a year if you do not have insurance.
It's a medication for plaque Psoriasis I actually have that condition,
it's an awful condition, this is a very expensive drug,
in fact, healthcare companies refuse to provide coverage for it.
You have to go through a ton of ridiculous treatments,
including going to tanning salons, going on a gluten free diet,
which I'm sure people in Hollywood love, but I'm not into that.
You have to go through all of this stuff, and
all of those faux ridiculous treatments need to fail before your health insurance
company is willing to provide coverage for this drug.
So I just want to give you that background information on it okay.
There is a high likelihood of market entry from a biosimilar competitor in January
of 2025, before the 2026 rollout of newly negotiated prices.
There is also expected to be competition for Xarelto, a blood clot drug, in 2025,
and by 2026, 25 different competitors could be making generics for
Jenuvia, a diabetes drug on the negotiation list.
Entresto, taken to prevent heart failure,
should also have a generic competition by then.
So it's theoretically possible that by the time we get to 2026,
only three drugs Enbrel, Imbruvica, and Eliquis,
the latter two are patent protected until 2031, will escape generic competition,
and will therefore be eligible for price negotiation.
In reality, that number will likely be higher, but
it's very likely that it won't be ten.
So there you have it, games, all sorts of games being played with our lives through
this BS legislation that Democrats are certainly going to want to campaign on.
They're going to be bragging about it, we lowered your drug prices, but
did they really?
I'd venture to say they didn't, and when you take a look at how it was written,
how it was watered down, and now how generics come into play.
And basically void the negotiations for many of these drugs on the list,
you kind of get a sense of how they try to pull a fast one on us.
But luckily, we have real journalists like David Dayen and
looking into the matter and
telling us the truth about what's likely going to happen by the time we reach 2026.
There's a good reason why the stock values of these pharmaceutical companies went
up after the list was announced.
They ain't worried about a damn thing,
because in a neoliberal system, the government does work.
It works on behalf of the corporations, not on behalf of the American citizens.
And we need to change that.