The cost of prescription drugs have been a political issue for years. If Congress passes the Reduce Inflation Act, a provision would allow Medicare, for the first time, to negotiate drug prices.
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High prescription drug prices have been a hot political talking point for years. Democrats now may be making some progress on that, thanks to a Senate compromise negotiated by Majority Leader Chuck Schumer and West Virginia Democrat Joe Manchin. Arizona Democrat Kyrsten Sinema has yet to say whether she’ll vote for the Reduce Inflation Act. But if it wins her approval, the legislation would pass the Senate and then the House. NPR pharmaceuticals correspondent Sydney Lupkin has been looking into the provisions of the bill and why it’s getting so much attention.
SYDNEY LUPKIN, BYLINE: The big thing everyone is talking about is Medicare drug price negotiation. Officially, Medicare had been barred from directly negotiating drug prices. But starting in 2026, assuming this bill becomes law, Medicare can negotiate 10 drug prices. And then in 2027, it can negotiate 15, and by 2029, it can negotiate 20. Though we don’t know specifically which drugs just yet.
FADEL: OK. So it’s not that Medicare would be able to negotiate all drug prices, right?
LUPKIN: That’s right. So these are only high-cost drugs that are covered under Medicare Parts D or B, meaning they’re retail prescription drugs or administered by a physician. And they have to have been on the market for a while to be eligible for negotiation. For some drugs, it’s nine years, and for others, it’s 13. And again, we still don’t know which drugs they’ll choose, but the bill is still progress on drug prices that we really haven’t seen in years. Here’s Stacie Dusetzina of Vanderbilt University.
STACIE DUSETZINA: You know, it really does break a lot of new ground and fix a lot of problems that we either identified or created by accident over the years. And so I think from a how big of a deal is this, it’s a huge deal.
FADEL: OK. So what else does the bill do?
LUPKIN: Well, it makes drug manufacturers pay a rebate if they increase prices above inflation. It would also make vaccines free for Medicare beneficiaries. That would start next year. And it would do a few more things, like capping out-of-pocket prescription drug spending at $2,000. So that’s not going to affect everybody, but it’s going to wind up being a big help for seniors who need high price, specialty drugs for things like rheumatoid arthritis or cancer. So on top of helping seniors, all told, the reforms would save the government around $288 billion over the next 10 years. That’s according to the Congressional Budget Office, which looked at an earlier version of the bill.
FADEL: OK. So this all sounds pretty good. What do the drugmakers say about it?
LUPKIN: They do not like it. The head of the trade group for branded drugs, PhRMA, called it a historic mistake last week. The general argument here is that the bill would stifle innovation and mean fewer new drugs will get developed and make it to consumers. Tricia Neuman of the Kaiser Family Foundation says those fears are overblown.
TRICIA NEUMAN: PhRMA has been making the case that the legislation will decimate research and development and it will mean cures for cancer will not come to market. You know, that’s certainly scary. We all want cures for cancer. We all want cures for Alzheimer’s disease. But the truth is, CBO is predicting it will have a very modest impact.
LUPKIN: So in this case, the Congressional Budget Office says about 15 drugs won’t make it to market over the next 30 years as a result of the bill. But that’s out of 1,300 drugs. So most drugs will still make it to market.
FADEL: That was Sydney Lupkin, NPR’s pharmaceuticals correspondent. Thanks, Sydney.
LUPKIN: You bet.
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