The War on Drug Prices Is Just Beginning – Mother Jones

Prescription drugs at a pharmacy in Manhattan in July.Spencer Platt/Getty

On Thursday, The Biden administration announced that it had reduced the cost of the 10 most expensive drugs covered by Medicare in a groundbreaking deal. Once the reduced prices take effect, patients are expected to pay billions less out of pocket in 2026 – as will the U.S. government.

Meanwhile, Kamala Harris is campaigning in North Carolina and elsewhere to push a new economic policy agenda that includes aggressive action on price gouging, medical expenses and the rising cost of living. What are the natural next steps for Democrats to build on the momentum of the White House's Medicare deal?

You have plenty of options. Even with generics, prescription drugs cost about three times as much in the U.S. as in other countries. Americans of all political parties also agree that the federal government's negotiations on drug costs are a good thing, according to KFF and other polls.

There are at least four ways the government can further reduce prescription drug costs that are likely to receive similar public support – so people don't have to go without necessary prescriptions.

Negotiate rare disease drugs under Medicare

Rare disease drugs — also known as orphan disease drugs — can cost a pretty penny. In 2019, nearly 7 million Americans with Medicare suffered from a rare disease, alongside about 20 million or more rare disease patients without Medicare insurance. But even with Medicare, these drugs and treatments can cost individuals thousands of dollars out of pocket each year.

Thomas Waldrop, health policy expert at the Century Foundation, says lowering the cost of rare disease drugs could have a significant impact on out-of-pocket costs.

“These more niche drugs for these rare diseases,” Waldrop said, “could have a disproportionate impact on people with disabilities or chronic illnesses, who may incur disproportionately high health care costs.”

Unfortunately for rare disease patients who are under pressure from high medical bills, rare disease drugs are currently exempt from negotiations under the Inflation Reduction Act, in part based on the argument that the exemption encourages pharmaceutical companies to invest in relevant research.

Pass the savings on to private insurers

According to KFF, nearly two-thirds of Americans under 65 have employer-sponsored health insurance. Since the average annual premium for such plans is about $8,000, people without Medicare insurance can face high prescription drug bills, especially at the beginning of the year. But that doesn't have to be the case.

“If these prices also applied to employer-sponsored insurers, we could achieve even greater savings,” Waldrop said.

One current obstacle, as a report from the Center for American Progress points out, is that “individual employers have limited ability to negotiate lower prices for their insurance plans.” This is where a government response may be more fruitful.

Combating overpriced treatments for chronic diseases

We know it's possible to make expensive drugs used to treat chronic diseases cheaper. For example, more Americans can now buy a month's supply of insulin for $35, a significant discount on a life-saving treatment that has long been priced at extortionate prices. But it can still be difficult for people with no or no insurance to get affordable insulin, especially if they are insulin dependent but don't have type 1 diabetes.

The federal government could work – including through sustained public pressure – to get pharmaceutical companies to adjust the high prices of cheaply manufactured drugs to reflect the actual costs of production. These costs can be particularly burdensome for young people with chronic illnesses, says Sneha Dave, CEO of Generation Patient, because they may have unstable health insurance for the first time in their lives.

Dave would look at “the impact that the Inflation Reduction Act may have on states' drug prices, for example with respect to prescription drug affordability panels that affect patients of all ages.”

Fight for patent reform

In July, the Senate unanimously passed the Affordable Prescriptions for Patients Act. The law is designed to stop the practice of pharmaceutical companies applying for (and receiving) multiple patents for seemingly different uses or formulations of the same drug, thereby keeping cheaper generic drugs off the market.

“Comprehensive reforms are needed to reduce drug prices,” says Dave. This includes regulating medical patents “to ensure that medicines remain affordable for the current and next generation of patients.”

The passage of the APPA, a draft of which is currently being considered in the House of Representatives, would be another step in the right direction.