Who are Democrats looking to cut drug costs for?

Americans frustrated with high drug outlays might be tempted to back what was until recently a proposal pushed only by the most left-leaning Democrats — to have politicians and bureaucrats dictate the price and availability of drugs. drugs for Medicare beneficiaries. But note who would benefit from the Democrats’ plans. They are not patients.

Much has been written in these pages about why using Medicare to dictate drug prices is a terrible idea. It’s essentially a form of price controls that would cut off private sector investment in research and development of new drugs and ultimately force bureaucrats to determine whether seniors have coverage or even access to the drugs that their doctors think are best for them.

Despite these dangers for the elderly and other patients, Democrats are stepping up, likely because they think it’s good policy. Polls show broad support for the idea that the government “negotiates” drug prices. But this appeal is based on a lie.

Americans are right to be angry at what they pay for drugs. Reimbursable fees can vary widely from pharmacy to pharmacy and suddenly change based on behind-the-scenes negotiations between pharmacy benefits managers and drug manufacturers. Additionally, seniors face the complexity of the “donut hole” of Medicare drug coverage, in which their out-of-pocket expenses may still increase.

Given public frustration, it’s no surprise that Democrats are marketing their plan as a way to cut drug costs. But for whom?

Democrats’ plans for the government to negotiate drug prices do not direct all of the cut Medicare spending to reducing out-of-pocket expenses for seniors. Democrats want to redirect that money to pay for unrelated spending priorities. In fact, drug price negotiation was included in the Build Back Better bill to give the impression that the giant spending package would not increase the deficit.

In total, the Congressional Budget Office estimated that the Democrats’ bill would have diverted $266 billion in Medicare spending to pay for other programs if passed. Removing a quarter of a trillion dollars from an already stressed Medicare program would spell disaster for seniors. Fortunately, this reconciliation bill never passed the Senate.

But in March, Sen. Joe Manchin relaunched the Medicare price negotiation plan, insisting the money supposedly saved should be used on priorities other than Medicare. Again, note what the so-called savings aren’t all about: reducing what seniors pay for their medications.

Ultimately, under the Democrats’ plan, billions of so-called savings intended for seniors would be redirected to fund unrelated spending priorities and create potential new access restrictions in the process. The CBO predicts fewer new medical breakthroughs as R&D investment dries up due to government pricing systems.

If congressional liberals really wanted to cut drug spending, they would have backed the drug reimbursement reforms championed by the Trump administration and many Republicans in Congress. This would have required savings negotiated between PBMs and drugmakers to be passed directly to seniors taking into account the rebate when determining the amount of cost sharing. Currently, patients often end up paying costs based on the list price of drugs rather than the price that has been negotiated between manufacturers and PBMs.

Requiring savings to go to the elderly prevents Democrats from spending them elsewhere, which again shows that Democrats care more about expanding government than the American people.

So the next time Democrats say they want to lower drug prices, ask yourself: for whose benefit?

Mr. Gingrich, a Republican, served as Speaker of the House from 1995 to 1999 and is chairman of Gingrich 360, a consulting and production company that advises companies and organizations in the health sector.

Assessment and outlook: Following the leak of a Supreme Court majority draft opinion that would overturn Roe v. Wade, the Democratic Party sees an opportunity to divert public attention from the rising cost of living. Images: Bloomberg Composition: Mark Kelly

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