Reply to Inflation Reduction Act of 2022

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[quote=Anonymous][quote=Anonymous]The focus of the bill is reducing RX costs, investing in the green economy and beefing up the IRS.

It is a win all around, no matter how much the GOP wants to balk.

A vote against it write their own ads: Sen XX voted against cheap insulin.[/quote]

Hmmm.... the pharmaceutical provisions in this bill will not occur anytime in the immediate future.

https://www.forbes.com/sites/joshuacohen/2022/08/02/critics-decry-drug-pricing-provisions-in-inflation-reduction-act-say-they-will-stifle-innovation/?sh=42ac3805222d

[quote]As for the specific drug pricing provisions, a small number of single-source branded pharmaceuticals - 10 Part D drugs in 2026; 15 Part D drugs in 2027; 15 Part B and Part D drugs in 2028; and 20 Part B and Part D drugs in 2029 and later years - would be selected from among the 50 drugs with the highest aggregate Medicare Part D spending, and the 50 drugs with the highest total Medicare Part B expenditures.

The legislation exempts from negotiation drugs which are less than 9 years (for small-molecule drugs) or 13 years (for large-molecule biologics) from their FDA-approval date. What’s important to add is that the selected drugs would have to lack generic or biosimilar competitors. And, orphan drugs would not be subject to Medicare negotiations.

Medicare would establish so-called maximum “fair prices” for the selected drugs. Here, the amount of a minimum discount off of the average manufacturer’s price is based on how long the drug has been on the market. For drugs marketed more than 9 years, a minimum 25% discount is required; greater than 12 years, 35%; and greater than 16 years, 60%. The discounts negotiated could be higher. This would depend on a number of factors, including clinical effectiveness indicators which drug manufacturers may explicitly call attention to in the negotiation process to mitigate the discounts.

As readers reflect on the possible long-term implications of the bill, it’s vital that they are cognizant of the limited scope of the Medicare price negotiations (often called “price controls”), especially those placed on non-insulin products. First, the price setting of new drugs would not be affected by the legislation, except indirectly through the shifting of cost management in the Part D benefit. Where in the current situation branded drug manufacturers are responsible for 70% of costs in the coverage gap phase, that would change to 10% in the initial coverage phase and 20% in the catastrophic phase.

Second, besides insulin, there aren’t many drugs that would even qualify to be selected for negotiation. Frankly, it’s probably going to be difficult to find 20 eligible drugs in, say, 2028. Last year, the Kaiser Family Foundation (KFF) carried out a simulation of how drug price negotiations would work in practice. In the hypothetical scenario - as stipulated in the House bill which passed in 2021 - the study found that at most 20 non-insulin drugs and biologics (18 Part D and two Part B products) would qualify to be possibly selected for Medicare negotiations in 2022.[/quote][/quote]

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