Reimbursable drug costs for Medicare beneficiaries must be brought under control

TThis year, 56 million seniors in the United States will pay more for Medicare prescription drug coverage, in part because of a single drug most won’t take – Aduhelm, an Alzheimer’s disease drug. recently approved, expensive and controversial.

At the end of 2021, the Centers for Medicare and Medicaid Services announced one of the largest increases on record – nearly 15% – in monthly premiums for Medicare Part B, which covers drugs injected or infused administered by clinicians, among others. outpatient services. The raison d’ĂȘtre of CMS? The premium price hike was necessary in anticipation of potential future Aduhelm coverage, initially priced at $ 56,000 per year.

Lawmakers immediately urged the Biden administration to reconsider this premium increase in order to “reduce short-term spending by fixed-income seniors.”


This premium increase does not even take into account the premium costs for Medicare Part C and Part D plans (nearly $ 230 and $ 400 per year, respectively), which provide prescription drug coverage to the elderly and disabled either. through Medicare Advantage plans (which also cover hospitals and outpatient services) or stand-alone drug plans.

Prescription drug coverage was a landmark achievement of the George W. Bush administration with the passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. At the time, more than 14 million seniors in America did not have access to drug coverage and more than a third said they did not take their drugs as prescribed because of the cost.


The creation of these federally funded drug plans has certainly helped seniors: annual reimbursable drug costs have fallen by an average of 49% for those who previously did not have drug coverage.

In a study published in JAMA Internal Medicine on Jan. 4, we and several colleagues looked at the impact of these drug plans on the amount that seniors with several common chronic conditions spend out of their own pockets on drugs. prescription drugs. Two-thirds of seniors in America have been diagnosed with two or more chronic conditions and almost two-fifths have six or more.

We found that for seniors with eight common chronic conditions, a combination of conditions like diabetes, high blood pressure, and atrial fibrillation (an irregular heartbeat), the inflation-adjusted annual fee for Medicines recommended by the guidelines increased significantly, by more than 40% between 2009 and 2019.

The costs of drugs to treat some conditions have gone down, but others have gone up. The overall increase in out-of-pocket spending was largely due to the introduction of new brand name drugs that did not face competition from generics, whose high prices were set by their manufacturers. The out-of-pocket expenses that Medicare registrants face at the pharmacy counter were about 12% of their median income in 2019 – and that doesn’t even take into account other reimbursable medical expenses like the drug plan and drugs. ‘other insurance. plan premiums or for the treatment of many other acute or chronic illnesses.

As clinicians, we see first-hand the difficulties our older patients face in obtaining the medications we prescribe. Most seniors enrolled in Medicare live on fixed incomes, and a quarter live below 150% of the federal poverty line. These limited funds are used to pay for daily necessities, including housing, food, utilities, and health care. Rising prescription drug costs leave seniors with unacceptable tradeoffs.

Excessive out-of-pocket fees have been found to prevent some people from taking the drugs as prescribed, resulting in poorer health outcomes. A 2019 survey showed that one in four Medicare beneficiaries reported having difficulty paying for their drugs. If this continues, an estimated 112,000 seniors will die each year from being unable to take their medications as prescribed due to the high costs. What good are effective drugs for treating illnesses if people cannot afford them?

The opportunity for Congress to intervene to protect the elderly from the unfair burden of high drug prices, now and in the future, is blurring. Just as Congress met nearly two decades earlier to enact the Medicare Modernization and Help Improve Lives of Seniors Act, now is the time for Congress to enact structural reforms. drug prices.

The cap on annual direct payments for the elderly has been proposed under the Build Back Better program. This would provide significant financial relief to those who have to take multiple expensive drugs, such as the type of patients we studied. These direct payments, however, are tied to prices set by manufacturers. Insurance plans, including Medicare, may be forced to offset these direct payment caps in other ways if drugmakers continue to charge high list prices, especially when prices parallel rise among competing manufacturers. This may include reducing coverage for other types of health services or increasing monthly premiums.

While the Build Back Better package includes provisions to mitigate these potential premium increases, they do not guarantee that such increases can be completely avoided, especially as expensive prescription drugs have continued to be approved and taken. into account for coverage.

To cope with high prescription drug prices and subsequent price increases, Congress must allow payers like Medicare to negotiate lower list prices and demand rebates from the federal government for any price increases beyond. inflation for prescription drugs. Ideally, negotiations should be based on evidence of the proven clinical benefits and safety of drugs, evaluated by independent experts. Allowing negotiation will not only reduce the cost for individuals taking expensive drugs, but also for entire populations paying premiums for health insurance.

The introductory and list prices of prescription drugs have skyrocketed over the past decade, contributing to rising out-of-pocket costs and insurance premiums for patients. The impact of an expensive drug, Aduhelm, may also portend further price increases if this trend continues with the introduction of new treatments such as gene therapies with six- or seven-digit price tags. Rather, allowing Medicare to negotiate lower drug prices would result in significant cost savings over the next decade, which could avoid the need to increase premiums.

Tackling only the sudden and steep rise in Medicare Part B premiums this year would be tackling a symptom, not the sickness of a prescription drug pricing system that has festered for far too long. long at the expense of patients. As Congress meets again on Capitol Hill this month and continues to deliberate on the Build Back Better Act – legislation designed to strengthen the safety net for Americans, especially older Americans – lawmakers must ensure the adoption of structural drug price reforms. Otherwise, seniors will continue to bear the unfair burden of high drug prices, even for drugs that are not prescribed to them.

Reshma Ramachandran is a family physician and member of the National Clinician Scholars Program at the Yale School of Medicine. Tianna Zhou is a medical student at the Yale School of Medicine. Joseph Ross is a general practitioner in internal medicine and professor of medicine and public health at the Yale School of Medicine.

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