Medicare’s new power to negotiate drug prices won’t fix America’s health care problems | Opinion

Medicare’s new ability to negotiate drug prices comes with a lot of big promises: increased affordability for patients, reduction of the federal deficit and secured sustainability for Medicare.

Can Medicare deliver on any of these? On the first goal, yes. The second, possibly. But as for Medicare’s financial viability, not a chance.

One has to look no further than the Centers for Medicare and Medicaid Services’ list of the first 10 Medicare Part D drugs they want to negotiate prices for (thanks to the Inflation Reduction Act last year).

Five of the 10 medicines selected for price negotiations are to prevent heart failure and strokes — Eliquis, Entresto, Farxiga, Jardiance and Xarelto — and four of the 10 are to treat diabetes — Farxiga, Fiasp/Novolog, Jardiance and Januvia, with Farxiga and Jardiance having indications for both heart failure and diabetes.

This list of drugs is unsurprising given that heart failure, strokes and diabetes are among the leading causes of mortality in the United States and also major drivers of health care costs. According to the Centers for Disease Control and Prevention, treatment for heart disease and strokes cost $79 billion annually, while diabetes costs $327 billion a year.

Would negotiating the prices of the selected medicines reduce how much we spend on treating these diseases? Unlikely. These conditions are extremely complex, with nuanced treatment plans and frequent complications that often require visits to the emergency room, hospitalizations and extended nursing home stays. For example, diabetes is the most expensive chronic disease to treat in the United States. The most costly complication of diabetes is kidney failure, which requires dialysis and, eventually, a kidney transplant, which can cost at least $80,000, or much more.

We also can’t expect medications alone to improve health outcomes. Xarelto was approved in 2011 to treat and prevent blood clots and also to reduce the risk of stroke. Eliquis was approved in 2012 because it could also reduce the risk of stroke. In 2013, the age-adjusted mortality rate for strokes was 36.2 per 100,000. In 2021, the rate was 41.1 per 100,000.

Given that more than 5 million Medicare beneficiaries received Eliquis or Xarelto between June 2022 and May 2023, there is no evidence to support that lack of access to these medicines is the culprit for these stagnant outcomes.

While I don’t believe drug price negotiations will be a game-changer in terms of cutting costs for American taxpayers, I do believe it will have a significant impact on patient affordability. By negotiating a lower price on these medicines, Medicare beneficiaries will have lower copays and out-of-pocket costs at the pharmacy counter. I hope this will increase the number of people taking their medicine as prescribed to improve outcomes, rather than trying to ration their medicines. However, any improvement would be at an individual level, not necessarily for the general population.

Medicare negotiating drug prices is proving to be a red herring in America’s fight to reduce health care costs. When it comes to saving money on care, the most significant opportunities are on the prevention side, not in treatment. Until we improve how heart disease, strokes and diabetes are prevented, diagnosed, treated and managed across our medical system, we will continue to see a high demand for the medicines that are developed to treat these diseases, which will continue to cost billions of dollars every year — even at a negotiated price. Any claim that negotiating the prices of these medicines will reduce health care costs, lower the federal deficit or secure the sustainability of Medicare for future generations is an overstatement.

This story was originally published October 19, 2023 at 7:33 AM with the headline "Medicare’s new power to negotiate drug prices won’t fix America’s health care problems | Opinion."