This week’s questions from Dan
With the passage of the new legislation allowing Medicare to negotiate prices directly with drug companies, would it behoove me to ask my doctor If I can change from Jardiance (which I currently buy from Canada) to one of the newer injectable medications such as Ozempic, Trulicity, or Victoza? I’m not clear on the new regulations. Or is it too soon to think about this?
Answer
Trying to Avoid the Donut Hole
Unfortunately, Dan, as far as if you can avoid the Donut Hole and save money by switching vs buying Jardiance from a Canadian Pharmacy like you’re doing now, the answer is no. What you’re referring to was included in the recently passed Inflation Reduction Act, which for purposes of this column I’m going to refer to as the IRA. Part of the legislation that’s being touted is lower costs for prescription medications by limiting what those on Medicare Part D can pay out of pocket for their drugs to $2,000 per year. Unfortunately, and I have no idea why, this part of the bill doesn’t go into effect until 2025. There’s another part of the bill that will help people who take extremely expensive medications and wind up in what is known as the Catastrophic Drug Stage which occurs when those who have paid enough out of pocket, approximately $2,500, get out of the Donut Hole. Once in the Catastrophic phase, drugs cost 5% of the retail instead of the 25% people pay while in the Donut Hole. That 5% will be eliminated in 2024 which is a very big deal for those who take medications with retail prices for a 30-day supply in the thousands of dollars. 5% of $10,000 which equates to $500 per month or $6,000 per year in savings when that’s eliminated. There are more people than you might think who take these outrageously expensive drugs.
The Medication Portion of the IRA
Let’s talk about why I’m so disappointed in the medication portion of the IRA. As Dan mentioned, Medicare will be able to negotiate costs of some drugs as part of the IRA. However, that won’t begin until 2026 and can only be done with 10 medications. That number will increase to 15 in 2027 and max out at 20 in 2029. Again, I have no idea why the delay. It would be pretty easy to pinpoint the most prescribed brand name medications among those on Medicare Part D and start negotiating them, specifically those non-insulin injectable medications that treat Type 2 Diabetes Dan listed. They’re widely used and the most costly group of Tier 3 Preferred Brand drugs on the market, with an average retail cost of $1,000 for a 30-day supply. In Canada, the same three drugs, manufactured in the same exact facilities, have an average retail of $350 for a 30-day supply. And it’s not just in Canada where drugs cost less, but virtually every country in the world where they’re sold. I have a feeling when those limited number of drugs will be negotiated, they will still cost more in the US than any other country and consist of medications that aren’t as frequently prescribed or soon to be generic. Here’s my opinion; Any legislation that claims to lower drug costs and doesn’t consist of regulations forcing drug manufactures to sell prescription medications to US pharmacies or wholesalers at the same cost they do in other countries is an insult to our intelligence. It’s politicians attempting to appear they are doing something to lower ridiculously inflated costs while still protecting big donors and lobbyists.
I’m a member of the “something is better than nothing” fan club. Anything that can save seniors even a few dollars is good news. For example, someone taking Ozempic will pay $2,400 out of pocket for that drug alone in 2023. In 2025, that will be capped at $2,000 for a $400 savings. However, many, if not the majority, of people who hit the Donut Hole and are forced to pay 25% of the retail price for their brand name prescriptions come close, but don’t reach the $2,000 threshold, meaning they won’t benefit at all. Those who take Eliquis, which may be the most commonly prescribed non diabetes medication amongst those on Medicare Part D, pay around $1,100 to $1,500 out of pocket per year for that medication alone. So, unless they are taking another brand name drug in addition, they’ll get no help.
Call Us!
My biggest gripe about the IRA is that it does nothing to lower the actual retail costs of brand name medications. I’m taking the “I’ll believe it when I see it” approach on Medicare negotiating the prices of just 10 to 20 medications and getting them lowered enough to help more than a sliver of the millions of seniors who are struggling to pay for their prescriptions. At the end of the day, all the IRA does is transfer the burden of paying all costs over $2,000 per year from those on Medicare Part D to taxpayers. Big Pharma gives up not one cent of the massive profits they’re making. The top 10 grossing pharmaceutical companies alone made $130 billion dollars in profits in 2021 according to Forbes Magazine. I’ll bet anyone willing to wager, by 2029, when the drug portion of the IRA is fully implemented, those profits will be greater than $130 billion.
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Thank you!
If you have any questions or concerns regarding this column topic, or would like to make an appointment for a no-cost consultation, please feel free to give us a call – we would be happy to help. I’d like to remind everyone that I do a live call-in talk show called Medicare A to Z every 1st and 3rd Monday of the month on WMBS Uniontown, 590AM and 101.1FM, from 1 to 3 PM. You can listen in on their website, wmbs590.com.
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