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Women, in particular, stand to benefit from a Biden administration initiative allowing Medicare to negotiate the prices for medications for the first time, experts say.
The program created under the Inflation Reduction Act aims to reduce the cost of some of the most expensive medications under Medicare, with the first 10 announced this week. Over half of Medicare recipients are women, and an even higher proportion rely on Medicare for their medication coverage. Women are also more likely to skip or delay taking medication due to cost.
“Women typically have lower pay and less wealth, which makes it harder for them to afford care,” said Leigh Purvis, prescription drug principal for the AARP Foundation. The AARP Foundation advocates on behalf of older Americans. “They are more likely to skip those medications. There’s just a lot of factors that make women potentially more susceptible to those high prescription drug prices. And that’s what makes this change so important for them.”
Women aged 65 and older also tend to have less flexibility in their budgets if their medication prices increase, said Stacie Dusetzina, a professor of health policy at Vanderbilt Medical Center.
The selected drugs account for $50.5 billion in Medicare Part D drug costs, according to the Department of Health and Human Services, or about 20 percent of total prescription costs for the program. The drugs were selected based on highest Medicare spending, how long they have been on the market and whether they currently face competition from rivals. The move is currently being fought by the drug industry in court.
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“From our perspective, we think this was a huge success. Prior to now, Medicare was not able to negotiate drug prices on behalf of its tens of millions of beneficiaries,” Purvis told The 19th. “We think that Medicare is going to bring a lot of bargaining clout to the table, and that is going to result in lower drug prices, which, of course, is something that our members have been asking for for a very long time.”
Drug price negotiation is largely popular. According to polling from nonpartisan health policy research group KFF from last year, 89 percent of Democrats and 77 percent of Republicans support the federal government negotiating some drug prices for people with Medicare.
Some of the drugs on the list are commonly prescribed, like Elquis, a blood thinner used to treat heart failure. Elquis costs $4,000 per year on average for Medicare enrollees who take it. Other drugs, like Imbruvica, a cancer drug, are less commonly prescribed but even more costly. Average total spending for a Medicare enrollee taking Imbruvica is over $120,000.
Two on the list, Stelara and Enbrel, will also particularly benefit women when it becomes lower cost. Both medications treat autoimmune conditions like Crohn’s disease and rheumatoid arthritis, and nearly 80 percent of patients diagnosed with autoimmune disease are women.
Now that the list of drugs is public, pharmaceutical companies have until October 1 to declare whether they will participate in price negotiation or not. If they opt out, they will either need to pay a large excise tax or pull all of their products from Medicare and Medicaid. Both moves would take a large bite out of their profits.
Consumers will not feel the result of this move for some time. The Centers for Medicare and Medicaid Services (CMS) will publish the negotiated prices on September 1, 2024, but those prices will not go into effect until January 1, 2026. In a news release, CMS announced it will select up to 15 more drugs for 2027, up to 15 more drugs for 2028 and up to 20 more drugs each year after that, in accordance with the Inflation Reduction Act.
It is unclear whether this move will impact drug prices for people who are not on Medicare — something experts including Purvis will be watching closely.
“There are some states who are already working on this legislation that would tie the prices that they pay to the prices that are negotiated by Medicare Part D. So there’s a very real chance that people will use the Medicare negotiated prices as the new threshold for when they start negotiating prices for themselves,” she said.