There is no question that prescription drugs are a basic need that allows numerous people in the US and abroad to lead healthy lives, simply by preventing their illnesses from aggravating. According to the Missouri Foundation for Health, 52% of Americans now use these drugs to manage their chronic health conditions, improve their life expectancy and their well-being. Moreover, the use of prescription drugs is expected to become even more critical in the next coming years, as the population ages. In light of the projected surge of chronic illnesses by 2030, it is evident that the imperative to reduce prescription drug costs has gained paramount importance.
The exorbitant costs of prescription drugs in the US are often an impediment that prevents some patients from receiving the proper treatment and enjoying healthy lives. According to a recent KFF study, lowering prescription drug costs should become a critical health policy. The research demonstrates that six in ten adults need at least one prescription drug, while 25% of all American adults are now taking four or more prescription medications. Even more concerning is the fact that 83% of adults describe the cost of these drugs as being “unreasonable.” This has prompted policy-makers to devote their time and efforts to finding the right solution to this problem.
A Priority for the Biden Administration
Reducing prescription drug costs has become a priority for the Biden-Harris Administration, and the President is actively achieving tangible results in this regard. Recently, the US Department of Health and Human Services, operating through the Centers for Medicare & Medicaid Services (CMS), is putting forth measures to increase the reduction of prescription drug costs through Medicaid. These initiatives aim to build upon President Biden’s executive order, whose purpose is to lower prescription drug expenses for the American population. The administration had previously introduced penalties targeting pharmaceutical companies that are known to have increased the prices of specific drugs beyond the inflation rate.
During a speech in Las Vegas earlier this year, President Joe Biden announced his intention to impose fines on manufacturers found guilty of inflating the prices of certain drugs for people covered by Medicare at rates exceeding the inflation rate. This decision is expected to lead to reduced coinsurance payments for these patients. The President has also mentioned that this action is meant to bring about a transformation in the pricing of pharmaceuticals. “It’s not just your health. It’s about your dignity, it’s about your security. That’s why my administration is focused intensely on getting more people affordable health care,” he said.
Increasing Medicaid Drug Transparency
While imposing fines on pharmaceutical companies is an extensive undertaking, a more recent proposition is aimed at enhancing the transparency of prescription drug costs under the Medicaid program. This can be done by implementing a drug price verification survey tool for the CMS and states. The tool in question would enable the verification of drug prices and facilitate negotiations for costly drugs covered by Medicaid. The proposal also emphasizes the need for more transparency regarding the payments made by healthcare plans to pharmacy benefit managers and regarding the reimbursements received by pharmacies for drugs. Moreover, the CMS is also putting forward provisions to help states prevent the mislabeling of drugs as either brand name or generic.
By announcing these measures, the Biden administration hopes to increase consistency and accuracy in the reporting of drug information, while also strengthening data collection efforts. It also seeks to expand the measures covered by the Inflation Reduction Act by promoting transparency. According to the Secretary of the Department of Health and Human Services, Xavier Becerra, the proposal will advance the efforts already made to increase drug pricing transparency, and it will also help policymakers guard the future of the Medicaid program and protect its financial integrity. “This proposed rule will save both the states’ and the federal government’s money,” he summarized.
A Final Note
In August 2022, President Biden signed the Inflation Reduction Act into law, enabling the federal government to engage in negotiations concerning the prices of specific medications covered by Medicare. Since then, numerous other efforts have been made to promote transparency and reduce prescription drug costs. However, working to reform drug pricing practices at the state and national levels is by no means an easy task, and more needs to be done to promote a more equitable healthcare system.
