What’s Biden’s plan?
In addition to expanding Medicare to cover vision, dental and hearing care, the bill Democrats plan to draft this fall takes a three-pronged approach to slashing drug prices. It would:
Allow Medicare to negotiate prices for some of the most expensive drugs that don’t face competition in the market. Currently, Biden says, Medicare can negotiate prices for just about everything else, from doctor’s visits to wheelchairs; prescription drugs is the only exception.
Penalize manufacturers that raise prices above the rate of inflation, “after it’s determined how much they’ve invested and what a healthy profit constitutes.” Biden points to a common drug for arthritis that cost $1,350 per month when it was introduced back in 2003. Today, it costs $7,700.
Cap the amount Medicare beneficiaries have to spend on drugs at “about $3,000” each year. The president cited an expensive cancer drug that can cost $20,000 a month — even with Medicare, people who need that drug pay an average of $1,300 a month.
“Studies have shown that if we do this, we can save seniors thousands of dollars a year,” Biden says. “And by the way, it isn’t just seniors who will benefit. This would lower prescription drug prices for all Americans.”
How? The White House says Medicare could make its superior prices available to private insurance companies, too — saving them money and encouraging them to slash the premiums they charge.
Americans pay way more than others
Biden started his speech by acknowledging the life-saving research done by pharmaceutical companies — but he says there’s “a distinction between developing these breakthroughs and jacking up prices on a range of medications for a range of everyday diseases.”
U.S. prescription drug prices are 256% higher than in 32 other wealthy countries, according to a study released earlier this year by the nonprofit RAND Corporation and funded by the federal government.
The price gap widens even further when it comes to brand-name drugs, which the study notes are 344% more expensive in the U.S. than in the other countries, including Canada, France, Germany and the U.K.
Researchers estimated that, across all 32 countries, total drug spending amounted to $795 billion. The U.S. by itself accounts for 58% of that spending.
The news wasn’t entirely grim. One positive revelation was that prices for generic drugs, which account for 84% of the drugs sold in the U.S. by volume, were slightly lower in the U.S. than in most other countries.
Biden’s plan, which is more narrow than the one he pitched on the campaign trail, would specifically target drugs without a generic equivalent.
What can you do?
Even though, as a consumer, you can’t change drug prices at the manufacturer level, there are some clever money-saving methods you can try:
- Asking your doctor to prescribe generic brand drugs.
- Shopping at the big-box pharmacies.
- Comparing prices at a few different locations before making a purchase.
- Getting a bigger dose that you can cut in half (if your drug allows it — be sure to check with the pharmacist).
- Buying the bigger bottle that will last longer to reduce the number of times you have to pay your copay.
In his speech, Biden also offered “one other big thing that will help millions of Americans afford their prescription drugs: getting them affordable health insurance.”
Now is a particularly good time to start shopping for a health plan, as a special enrollment period for ACA policies is set to end Aug. 15.
“For those who get their insurance through the Affordable Care Act, we’re covering more people, with better benefits, and with premiums 40 percent lower,” Biden says. “The average premium has been cut from $104 a month to $62 a month.”
If Biden succeeds at getting his bill through a divided Washington, more help could be on the way — but until then, Americans are doing whatever they can to afford some of the highest prescription-drug prices in the developed world.