The Biden administration pleasantly stunned health care reform advocates Tuesday by including short-acting insulin in its list of 10 drugs for which Medicare will negotiate lower prices, power vested in the White House by the Inflation Reduction Act.
The IRA was passed in the face of one of the heftiest barrages of lobbying in congressional history, with the pharmaceutical industry spending more than $700 million over 2021 and 2022 — several times more than the second- and third-ranking industries — much of it aimed at stopping the legislation, watering it down, or undermining its implementation.
The industry succeeded in narrowing the scope of the new law, with only 10 drugs eligible for negotiation in 2023. But the effort to stop the administration from using that authority to target blockbuster drugs failed spectacularly, as the White House list includes medications that seniors spend billions on in out-of-pocket costs alone, never mind the fees paid by Medicare itself. But it was the inclusion of the broad swath of ingredients and medical devices needed to make insulin that sets the White House move apart and which will likely have the most far-reaching impact.
“This was an unexpected victory in a long fight against an illegal cartel of three corporations who have raised their insulin prices in lockstep,” said Alex Lawson, executive director of Social Security Works, referring to Eli Lilly, Novo Nordisk, and Sanofi. “The inclusion of insulin in the list of negotiated drugs shows that the Biden White House isn’t fucking around.” Lawson’s organization has advocated for drug price negotiations for years, often drawing the ire of the White House and congressional leaders in the process.
Joe Biden’s insulin category covers a wide variety of products, including Fiasp, Fiasp FlexTouch, and Fiasp PenFill — rapid-acting insulin products — as well as commonly prescribed insulin products NovoLog, NovoLog FlexPen, and NovoLog PenFill. Major insulin makers, under severe public pressure, have in recent months announced price cuts to their products, though they could unilaterally raise prices absent this government intervention. “We did not expect to see short-acting insulin on this list. We were caught a little off guard,” said Shaina Kasper, policy and advocacy director for T1International, an organization dedicated to defending the interests of diabetes patients. Broadly speaking, she said it was “the result of years of dogged organizing and advocacy by patients with diabetes and caregivers.”
The IRA laid out specific criteria for which drugs could be included, and the White House went after the 10 that added up to the highest spending among drugs that met that criteria. Kasper said her organization will continue to push for executive action to drive down drug prices — the Biden administration has other authorities it could draw on — as well as legislation at the state and federal level.
Among the 10 drugs are three other treatments for diabetes, including Jardiance, Januvia, and Farxiga. Eliquis and Xarelto, which deal with blood clots, made the list, as did Stelara and Enbrel, which treat psoriasis and psoriatic arthritis. Entresto, prescribed for heart failure, will also come under the Medicare knife. Imbruvica, a blood cancer medication, will similarly be targeted by the government scalpel, news coinciding with House Majority Leader Steve Scalise’s somber announcement that he was diagnosed with a treatable form of blood cancer.
Price negotiations will begin this year and conclude in 2024 but will not go into effect until January 1, 2026. More drugs will be slowly rolled into the program. Next year, the White House will choose 15 more drugs to negotiate, per the IRA, and 15 the year after that. In each subsequent year, 20 new drugs will be added to the list. It is at once the definition of incremental progress, while representing a breakthrough victory against arguably the most powerful special interest in Washington.
Democrats have been campaigning on allowing Medicare to negotiate drug prices since making it a priority in the 2006 midterms — one of then-Democratic Congressional Campaign Committee Chair Rahm Emanuel’s “Six for ‘06” – but traded it away in 2009 to win Big Pharma’s support for the Affordable Care Act. Former President Donald Trump claimed to be a supporter of the policy and negotiated with Democrats on a proposal after the party reclaimed the House in 2018, though no agreement was reached and Trump never implemented any serious executive action on the issue. Biden made it a priority as part of the Build Back Better Act, which became the IRA. The measure’s ability to cut the deficit helped win the support of Joe Manchin, who represents one of the states with the oldest residents in the country, West Virginia.
For those who take a medication that didn’t make the cut, it’s not all bad news, argued Stacie Dusetzina, a health services researcher at Vanderbilt University’s Department of Health Policy. The savings accrued by Medicare from the negotiations will go toward making the Part D drug benefit more generous as early as next year, cutting out-of-pocket costs for many seniors by thousands a year.
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