On Aug. 16, 2022, President Biden took a significant step in addressing the rising costs of healthcare in the United States by signing the Inflation Reduction Act into law. This landmark legislation grants the Center for Medicare and Medicaid Services the authority to negotiate the prices of high-cost, single-source drugs that lack generic or biosimilar alternatives. While this move promises substantial financial relief for millions of Americans, its implications go far beyond mere monetary considerations.
This groundbreaking act holds the potential to transform the lives of millions of Americans who rely on high-cost medications. Currently, there are ten drugs eligible for price negotiation under this legislation. However, it is essential not to be misled by the small number; the negotiations for just three of these drugs stand to impact a staggering 6,616,000 Americans.
A survey by GoodRx found that, over the past year, prescription drug costs have risen for about 41% of Americans and 36% experienced difficulty paying for their prescription. Shockingly, about a third of Medicare and Medicaid recipients reported difficulties.
The past year saw an estimated 40% of Americans report a change in their adherence to medication due to cost.
Even though Americans spend significantly more on hospital and physician visits, pharmaceuticals boast the highest profit margins (they pocket the most money). In 2018, 63% of the healthcare industry’s staggering $50 billion in profits went to pharmaceutical companies, accounting only for 23% of the industry’s total revenue.
In layman’s terms, “big pharma” was able to amass substantial profits without substantially increasing their sales of medical goods or medications. It is not the case that they are charging these exorbitant prices because drug costs are high, if so they would not be spending more on advertising than research and development. Pharma can take the hit from price negotiations.
While the financial relief provided by the Inflation Reduction Act is undoubtedly crucial, it’s essential to recognize that the impact goes beyond dollars and cents. By addressing the exorbitant prices of these medications, President Biden’s actions offer hope to millions of Americans who rely on these drugs for their health and well-being. The act underscores the government’s commitment to making essential healthcare accessible to all citizens and taking a stand against the influence of “big pharma.”
When asked about this issue, John Carroll University’s Dr. Brent Brossman, Chair of the Tim Russert Department of Communication, chose to look back to the history of life-saving drugs, specifically, insulin. Dr. Brossmann stated, “One thing that is so wrong with our drugs and medications is the effort for corporations to profit when they should,” Brossmann stated. “I’m not saying companies should profit after they’ve spent millions of dollars on research and development.”
Brossmann then brought up the inventors of insulin, the life-saving drug for diabetics, explaining n that “the inventors, Sir Frederick G Banting, Charles H Best and JJR Macleod refused to put their names on the patent and sold it to the University of Toronto for one dollar. Their goal was to make the medicine available for cheap.”
Nowadays, corporations make slight adjustments to insulin and claim it is a new drug to skirt regulations and drive costs up. Brossmann shed light on the nature of medications to help people and to do so without bankrupting those in need.
The people who need these drugs are your neighbors, coworkers, friends or even family. When left unchecked, the soaring prices of prescription drugs can force people to make unimaginably hard choices. In 2020, John Miller, a Chicago resident living with Crohn’s disease, shared that the cost of the drug he uses to treat his condition forces him to “regularly file for bankruptcy.” A story like Miller’s is sadly unsurprising with the unchecked prices Americans are subject to. Not everyone can take on debt like John, some are forced to skip or change prescriptions.
Then there are the lives of Michael and Jacki Neilsen–who shared their story with Patients for Affordable Drugs–who struggle to afford life-saving medication. Michael, a combat veteran, would not have been able to pay for the $3,000 copay for the prescription that would keep his wife alive without financial help from a patient assistance foundation.
Some Americans, like Ginny Boyton–are fortunate enough to have good insurance coverage but that does not ease their angst. Ginny suffers from the neuromuscular condition Lambert Eaton Myasthenic Syndrome (LEMS). Her dosage costs soared to $500,000 a year. Boyton switched to another drug for medical reasons but that still cost $250,000.
Boyton recognizes that she can only afford these treatments because her husband has a good insurance plan, but she is worried that high costs like hers can put a heavy burden on the Medicare system. These negotiations can save recipients and taxpayers money, and allow Medicare to expand into other services.
President Biden’s signing of the Inflation Reduction Act on Aug. 16, 2022, marked a significant move in the ongoing battle against rising healthcare costs. The act’s provision granting Medicare the authority to negotiate drug prices is poised to bring about substantial change in the lives of millions of Americans who depend on these drugs. Beyond the economic implications, this act represents a commitment to prioritizing the health and well-being of the nation’s citizens over corporate interests.
