Medicare’s recent announcement of the ten prescription medications that will be subject to government price controls, under the provisions of the Inflation Reduction Act, provides an opportune juncture for policymakers in Congress and the executive branch. Before moving forward with the price controls on these drugs that would go into effect in 2026, there is one very important question they should be asking.
What do America’s seniors, the people ostensibly being helped by this radical change in the drug pricing infrastructure, really want?
The Medicare Today coalition asked that question in the form of a Morning Consult survey of 1,000 65-and-older Medicare beneficiaries, and it was abundantly clear that there is an enormous chasm between the policies the government thinks seniors should have and what older Americans actually prefer.
The Inflation Reduction Act’s drug pricing provisions set out to fix a Medicare Part D prescription drug program that seniors, in huge numbers, believe is not the least bit broken. Our survey showed that 91 percent of the senior population is satisfied with their Medicare prescription drug coverage. They also aren’t experiencing any affordability challenges, with 86 percent saying their monthly premiums are affordable and that their Part D plan offers good value. Eight out of every 10 seniors say their out-of-pocket costs are reasonable. And 81 percent reported that their plan covers all of the medicines they need.
One has to question the sense of urgency that led to the first-time-ever imposition of government price controls in the Medicare Part D program. (Yes, these are called “negotiations,” but when companies have the threat of a 95 percent excise tax hanging over their heads if they don’t cooperate, it’s clear the government will be dictating the terms.) Seniors say they aren’t feeling a financial pinch when they pick up their medicines at the pharmacy, and Part D monthly premiums aren’t exactly spiraling upward in cost. In fact, the Centers for Medicare and Medicaid Services announced in July that average premiums are expected to decrease by almost two percent in 2024.
Naturally, seniors have been following this issue as it has unfolded, and they have made it clear in the Morning Consult survey that their wishes are not in alignment with what Congress and the administration want to do to their drug benefit. Two of every three seniors say they would prefer to maintain the status quo in which private Part D plans negotiate prices with biopharmaceutical manufacturers, and only 16 percent say they want the government to set prices and determine which drugs are covered.
Over 80 percent, in fact, said they are concerned that, under this new paradigm, the government could choose to restrict access to medicines that seniors and Medicare beneficiaries with disabilities currently use, and 79 percent said they fear these price controls will limit access to newer prescription drugs.
As the Inflation Reduction Act was written, there was an implicit tradeoff. Yes, price controls would have an adverse effect on biopharmaceutical innovation, as we’ve already seen with companies pulling drugs out of the clinical trial process because price controls will make it difficult to gain a return on the massive investment required to bring them to market, in exchange for improved drug affordability for seniors.
Seniors are saying overwhelmingly, though, that this is a quid pro quo they don’t want. There is still time for lawmakers to correct this course and pursue alternative policies that boost competition and lower prices without utilizing heavy-handed price controls and the negative consequences that come with them. The first step must involve listening to the millions of Americans who will be directly affected.
Mary R. Grealy is president of the Healthcare Leadership Council and chair of the Medicare Today coalition.
