President Joe Biden is pushing to lower prescription drug costs with the Build Back Better Act.
Recently, he focused on the necessity for insulin to be affordable for the millions of Americans with diabetes.
“If you're a customer paying and you have a private health insurance plan, you may not be paying very much out of pocket for insulin," said Stacie Dusetzina, associate professor of health policy at Vanderbilt University School of Medicine. "If you are paying cash and uninsured, you could be paying thousands of dollars a month for your insulin. So one of the things that is very complicated is how much you pay depends on how you're insured.”
Dusetzina says the Build Back Better Act would lower prescription drug costs in three key ways. First, people wouldn’t be charged more than $35 per month at a pharmacy for insulin. The bill would also make it so people 65 or older on Medicare wouldn’t pay more than $2,000 a year for prescriptions.
“It's estimated that about one-and-a-half million people had spending above that kind of catastrophic level in 2019," Dusetzina said. "So that's a pretty sizable number of people.”
Moreover, the bill would allow Medicare to negotiate drug prices.
Paul Ginsburg, a professor of health policy at the University of Southern California, says it would be the first time Medicare would be able to negotiate in the U.S.
“We pay at least double what other high-income countries do," Ginsburg said. "And I think the reason is that we have never brought government into the process to negotiate the price. You know, in Europe and Japan, governments negotiate drug prices with manufacturers. We don't.”
Ginsburg says the drug negotiation would only apply to a certain number of drugs that are already on the market, so there’s still an incentive to invest in new drugs.
“New drugs being developed will have many years of freedom to price it whatever they want before this negotiation process hits them,” Ginsburg said.
President Biden also says the bill will stop drug companies from increasing prices without accountability. That's because there's a tax penalty if pharmaceutical companies raise the price for a drug higher than the rate of inflation.
“The costs of production are very tiny parts of the price," Ginsburg said. "So if you limit price increases to inflation, you're not really imposing a burden on the manufacturers.”
The Build Back Better Act has passed in the House. The Senate has not yet voted on the bill.