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Washington, DC — Yesterday, Republicans on the House Ways and Means Committee once again considered legislation to promote the use of health savings accounts (HSA), which overwhelmingly benefit high-income people while worsening racial and ethnic inequities in health care. This legislation incentivizes the expansion of HSAs through tax breaks, which would cost taxpayers more than $70 billion to reward the highest-paid workers. This comes as Republicans are working to repeal the Inflation Reduction Act, raise prescription drug prices, and throw millions off of Medicaid. In response, Leslie Dach issued the following statement: 

“Republicans are putting their priorities on full display: doling out more tax breaks to the wealthy while threatening to shut down the government. Republicans could join the Democrats to focus on making prescription drugs more affordable, expanding affordable health care, or fighting the maternal mortality crisis, but instead they are working to line the pockets of the wealthiest Americans while exacerbating harmful racial inequities in our health care system. Time and again, Republicans prove they are all in on their war on health care with no signs of letting up.” 

Background

HSAs Make Health Care Less Accessible And Affordable. Republican efforts to promote the use of HSAs directly undermines the ACA’s goals to make quality health care more accessible and affordable for all Americans. The promotion of employer-sponsored high-deductible health plans that use HSAs increases the cost of health care for employees and continues the difficult decisions low-income working families have to make between putting food on the table or paying for medical care. 

HSAs Benefit The Wealthy. HSAs largely benefit high-income individuals. Contributions to HSAs are not taxed, which helps wealthy people decrease their taxable income and avoid paying their fair share. These contributions can also be invested in stocks and bonds to accrue tax-free earnings that carry over year to year — further exacerbating the wealth gap.

HSAs Do Not Make Care More Affordable for Low-Income Individuals. HSAs do not benefit low-income individuals as they often do not have the ability to contribute to HSAs and need to use their available income to pay for medical bills and care upfront. Nearly 70 percent of adults under 200 percent of the poverty line would not have been able to pay a $1,000 medical bill within 30 days in 2022, let alone contribute to a HSA. Low-income individuals also do not benefit as much from tax-free earnings as high-income individuals due to the lower amount of tax deductions from being in a lower income tax bracket. Employers who offer high deductible health plans, where HSAs are necessary, typically contribute little to nothing to their employees’ HSAs. 

HSAs Exacerbate Racial And Ethnic Inequities In Health Care. Black and Latino people with private insurance are half as likely to have HSAs as white and Asian people. Per the Center on Budget and Policy Priorities: “Against a backdrop of long-standing racial disparities in wealth — a typical white family in 2019 had eight times the wealth of a typical Black family and five times the wealth of a typical Latino family — HSAs provide preferential tax treatment that is disproportionately out of reach for people of color.”

HSAs Cost The Government Billions. HSAs will cost the government $182 billion between 2023 and 2032. Meanwhile, the cost of President Biden’s plan for permanently closing the Medicaid coverage gap or permanently extending marketplace coverage premium tax credits over the next 10 years would cost roughly the same amount at $200 billion and $183 billion respectively. Unlike the bills to expand HSAs, Medicaid expansion and marketplace premium tax credits would allow millions of uninsured individuals to gain quality coverage.

Washington, DC — Today, the Biden administration announced that nearly 500,000 children and adults who were improperly disenrolled from Medicaid and CHIP will regain their coverage thanks to steps taken by the Biden administration. Last month, CMS sent letters to states directing them to assess their automatic renewal systems in order to ensure that eligible people did not lose coverage, to reinstate coverage for those who had been wrongly terminated, and to permanently fix renewal systems. New data released today shows 30 states attested to running automatic renewal systems that don’t comply with federal requirements, and approximately 500,000 children and adults wrongfully had their Medicaid or CHIP coverage terminated. Thanks to the Biden administration’s actions, those people will once again receive Medicaid coverage and any medical bills they incurred while they were disenrolled from the program will be covered. This action further protects eligible people from losing coverage through the auto-renewal system.

The data released today show states including Nevada, Virgina, and Georgia have kicked eligible children and adults off the Medicaid rolls through their automatic renewal systems. Nevada has reinstated coverage for over 100,000 children and adults, Virginia has reinstated coverage for up to 49,999 children, and Georgia is still determining how many people it wrongfully terminated from coverage. This is in addition to eligible children and adults who have been kicked off Medicaid for procedural – or paperwork – reasons. Georgia and Florida have ended coverage for hundreds of thousands of children; Texas has ended Medicaid coverage for between 500,000 and 750,000 children. Many of the states that are needlessly throwing people off the rolls have also failed to expand Medicaid, showing how some governors are using the redetermination process as another way to limit Medicaid enrollment. In response, Protect Our Care Chair Leslie Dach issued the following statement:

“This announcement shows that protecting quality, affordable health care remains front and center for the Biden administration. It is unacceptable for children and families to lose Medicaid coverage because their state’s renewal system is not properly run. The Biden administration’s actions to direct states to fix their systems permanently have immediately protected coverage for half a million people, and thousands more in the future. It’s no surprise that many of the states that are failing to keep people covered, like Georgia, Texas, and Florida are the same ones that have rejected Medicaid expansion, leaving families with no place to turn for basic health care. These governors need to ensure people who qualify for Medicaid are not being kicked off, period.” 

Protect Our Care Along with Public Citizen, Senators and Leading Health Care Experts and Advocates File Briefs to Protect Medicare’s Power to Negotiate Lower Drug Prices

With Medicare slated to begin negotiating lower prescription drug prices with big drug companies in the coming weeks, drug companies and their mega lobbying group allies are desperately suing the federal government in an effort to protect their profits by halting the popular program. In one lawsuit, pharmaceutical company Merck has asked the court for a decision on their case without going to trial. In response, leading health care groups have filed briefs to deny the motion and protect the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. Read more about the cases here. 

These meritless lawsuits are about one thing: protecting drug companies’ outrageous profits. Merck sells Januvia, a Type 2 diabetes drug that has been selected for negotiation. Januvia has been on the market without competition for 17 years and has grossed Merck $49.9 billion in sales since its launch. In 2021 alone, Medicare spent over $4 billion on the drug with an average of $4,343 per beneficiary while Merck CEO Robert Davis raked in $13.72 million. Since 2010, Medicare has spent nearly $28 billion on the drug. 

Medicare drug price negotiation is projected to lower costs for seniors and save taxpayers tens of billions of dollars, but big drug companies are eager to protect their outrageous prices and outsized profits. Drug companies that manufacture drugs that are likely to be eligible or were chosen for negotiation have a history of exploiting the patent system to protect their monopolies and keep competitor drugs off the market, spend millions on lobbying, and increase their list prices at rates that far exceed inflation.

Here are excerpts from the DOJ and health care expert and advocate briefs:

Department of Justice

Federal Government’s Opposition to Plaintiff’s Motion for Summary Judgment, and Cross-Motion: “For More Than 30 Years, Congress Has Imposed Limits on How Much Federal Agencies Pay for Prescription Drugs.” “Manufacturers who wish to sell their drugs to the Department of Defense and the Department of Veterans Affairs do so at statutorily defined ceiling prices, and both agencies have authority to negotiate prices further below those ceilings. […] Like other market systems, the Negotiation Program thus gives a manufacturer a choice: it can sell its products at prices a buyer is willing to pay, or it can take its business elsewhere. […] The IRA’s Negotiation Program is nothing more, and nothing less, than an example of Congress exercising its constitutional authority to control the use of federal funds. Such control fits squarely within the bounds of established precedent.” [Federal Government’s Opposition to Plaintiff’s Motion for Summary Judgment and Cross-Motion, 9/11/23]

Health Care Experts, Organizations, and Advocates

Protect Our Care, Public Citizen, et al.: “Merck’s Takings Clause claim rests on the flawed premise that ‘the whole point of the [IRA] Program is to take prescription drugs without paying their fair value.’” “Merck does not contest that it wants to sell brand-name drugs, including Januvia, to Medicare participants and beneficiaries. It does not contest that it will be paid for purchases of the drug. Instead, Merck argues that Medicare will pay less than the average amount that Merck prefers to charge in the United States – although not necessarily less than the amount that it charges other buyers in the United States or internationally. But Merck is wrong that its desire to impose a high monopolistic price on Medicare, the world’s largest drug purchaser, without negotiations, means that purchase below that price necessarily constitutes an unconstitutional taking.” [Protect Our Care, Public Citizen, et al. Amicus Brief, 9/13/23]

Sens. Amy Klobuchar, Peter Welch, Tammy Baldwin, Richard Blumenthal, Sherrod Brown, Catherine Cortez Masto, Richard J. Durbin, John Fetterman, John Hickenlooper, Jacky Rosen, Jeanne Shaheen, Debbie Stabenow, Chris Van Hollen, And Elizabeth Warren: “Congress Carefully Considered the Competing Interests at Stake in the Program and Struck an Appropriate Balance” “The Program was the culmination of ten years’ work examining the Medicare Part D system and escalating drug costs across the national economy. […] With the benefit of this long history and experience, Congress was fully prepared in 2021 to weigh and debate the negotiation provisions that would eventually win passage as part of the IRA. […] Naturally, Congress also heard from the Program’s opponents—and found their evidence and arguments wanting. […] The legislative record makes clear that Merck has simply repackaged the policy arguments it and its allies unsuccessfully advanced before Congress as constitutional arguments.” [Senators Amicus Brief, 9/19/23]

AARP and AARP Foundation: “Skyrocketing Drug Prices Have Stretched the Budgets of Older Adults to the Point Where They Are Forced to Make Impossible, Life-Altering Choices.” “The goal of the Negotiation Program is to end this public crisis and interject long-overdue fairness, transparency, and predictability into the drug pricing process. While prescription drugs are intended to treat illnesses and improve the quality of life, these benefits are meaningless if beneficiaries cannot afford them. […] Taken together, the IRA’s prescription drug provisions are designed to address high out-of-pocket costs, high taxpayer costs, and high drug prices. […] The other IRA provisions, though critical, cannot accomplish the goal of stopping escalating drug costs without the implementation of the Negotiation Program.” [AARP and AARP Foundation Amicus Brief, 9/18/23]

American Public Health Association et al.: “The Program Is A Vital First Step In Ensuring The Health Of Americans And The Medicare Program.” “Even without changing the price of new drugs, the public health benefits from lower drug prices for drugs that have been on the market for several years are likely to be orders of magnitude greater than the harm caused by this 1% reduction in new drugs: making existing drugs more affordable will enable more patients—especially low-income older people—to actually take and maintain existing necessary medication. […] Where funding for research and development comes from public programs, there is little reason to believe reduction in prices charged by manufacturers will result in substantially reduced effective and impactful innovation.” [American Public Health Association et al. Amicus Brief, 9/18/23]

Economists and Scholars of Health Policy: “The Inflation Reduction Act restores bargaining equity between manufacturers and consumers.” “These combined measures spur innovation and enable companies to recuperate their investment while protecting consumers from a market-wide overinflation of drug prices. The prescription-drug market has tipped in favor of manufacturers for decades, and the Inflation Reduction Act takes important steps to restore its balance.” [Economists and Scholars of Health Policy Amicus Brief, 9/18/23]

Nationally Recognized Healthcare and Medicare Experts: “Such rights do not apply to private parties’ relationships with the federal government.” “The [Drug Price Negotiation Program] is consistent with the federal government’s well-established ability to regulate the prices that the Medicare program pays for services by physicians, hospitals, and other providers. […] In claiming that the [Drug Price Negotiation Program] is an uncompensated taking of property in violation of the Constitution, Merck seeks to relitigate positions repeatedly rejected by courts in response to other challenges brought against federal healthcare programs.” [Nationally Recognized Healthcare and Medicare Experts Amicus Brief, 9/18/23]

Washington, D.C. — Today, House Budget Chair Jodey Arrington (R-TX) released a proposed budget for the next decade, which includes steep cuts to the Affordable Care Act, Medicaid, and Inflation Reduction Act, threatening health care for millions of seniors and families across the nation. Dismantling the Inflation Reduction Act would reverse prescription drug savings for seniors and make health care more expensive for families purchasing coverage on their own. This latest attack on health care comes at the same time House Republicans are threatening a government shutdown unless they get their way. The GOP budget resolution is slated for a committee markup tomorrow morning. 

In response, Protect Our Care Executive Director Brad Woodhouse issued the following statement:

“The GOP war on health care is alive and well. This is just the latest in a years-long effort to repeal the ACA, slash Medicaid and roll back any effort to make health care and prescription drugs more affordable for American families. The Republicans’ budget would do unspeakable harm to the progress made by the Biden-Harris administration through the Inflation Reduction Act. It’s a complete disgrace that while Democrats are working hard to lower health care costs for Americans, Republicans are trying to go backwards on progress.”

What Repealing the Inflation Reduction Act Means for American Health Care:

• GONE: Premium savings for over 13 million Americans covered under the ACA — averaging $2,400 per family.
• GONE: Medicare’s power to negotiate lower costs for the most popular and expensive prescription drugs.
• GONE: Prescription drug savings for seniors, including a $2,000 annual out-of-pocket cap and protections from Big Pharma’s price hikes.
• GONE: Free vaccines for seniors, including shingles and pneumonia.
• GONE: $35 monthly insulin caps for Medicare beneficiaries.

The CARE for Moms Act Includes Historic Investments to Strengthen Health Care Coverage During and After Pregnancy, Grow and Diversify the Doula Workforce, and Address Underlying Causes of Maternal Mortality

Watch the full event here.

Washington, DC — Today, U.S. Representative Robin Kelly (D-IL-02), National Medical Association President Dr. Yolanda Lawson, Maternity Care Coalition’s Sara Jann Heinze, and Vice Chair of the March of Dimes Board of Trustees Dr. Phyllis Dennery joined Protect Our Care to discuss her new legislation, the CARE for Moms Act, which is a comprehensive plan to combat the U.S. maternal mortality crisis. The bill includes critical steps to save lives, including by investing $35 million in state-based grants to improve perinatal care, mandating Medicaid coverage for new moms one year postpartum, extending Medicaid oral health coverage to pregnant and postpartum women, addressing implicit bias in the health care training, increasing and diversifying the doula workforce, and more. 

More than 1,000 women die annually due to complications of pregnancy or childbirth, making the U.S. maternal mortality rate three times higher than other wealthy nations. Black and Native women are at significantly greater risk of facing serious complications. Representative Kelly will introduce the CARE for Moms Act, which takes a multifaceted approach to promote the health of new mothers and their babies and the urgent need to stop the worsening maternal mortality crisis, on September 19. 

“I’m introducing the CARE For Moms Act because moms deserve better, Black moms deserve better,” said Congresswoman Robin Kelly, Chair of the CBC Health Braintrust. “When we take care of moms and prioritize prenatal and postpartum care, we can help entire families flourish. The reality is that too many moms, and particularly Black moms, are losing their lives. That’s why I’m pushing for change, supporting providers, and providing resources like mobile units and doulas. My goal is clear: to ensure that every mother has access to the care, empowerment, and resources necessary to be the best moms they can be.”

“The U.S. is lagging as a whole,” said National Medical Association President Dr. Yolanda Lawson. “Our country is faced with a shortage and a misdistribution of the maternal health care workforce which led to maternal health care deserts that are compounded by these hospital closures and closures of these obstetrical units. Then you look at black women in this country who are three to four times more likely to die and the disparity has increased and persisted for over 50 years. We talk about what we need to do to reduce these deaths and this bill is an important, useful, and substantive enhancement to these ongoing efforts to address and decrease maternal deaths.”

“We’re in a moment right now where folks are aware of the issues, and I don’t want us to miss the moment,” said Maternity Care Coalition’s Sara Jann Heinze. “This bill is investing in things that are already happening, work that we already know works that needs more resources. The health of our mothers is really one of the best measures to understand the health of our society, so investing in this work and having a broad-based coalition is important – we all need to be working together on these issues and helping people to understand the issue from multiple lenses.”

“After a premature birth, families face lifelong challenges, including economic, educational, and other things that impact their whole family,” said Vice Chair of the March of Dimes Board of Trustees’ Dr. Phyllis Dennery. “We have 900 maternal deaths each year and 80 percent of these are preventable, which is really a crisis. So I’m looking forward to this bill being passed because it is extremely important to all the mothers and babies in this country.”

“In the wealthiest nation on earth, it is unfathomable that our maternal mortality rate is three times higher than other nations,” said Communications Director for Protect Our Care Anne Shoup. “Our nation’s mothers are dying from fully preventable causes — with especially high risks for Black and Native mothers — and research shows that the problem is only getting worse. By making historic investments to strengthen health care coverage and address underlying causes of maternal mortality, the CARE for Moms Act is a critical step forward to improving the health and safety of families across the nation. We commend Representative Kelly for her leadership on this issue and urge Congress to do everything in its power to pass this legislation to save lives.” 

Dayton Area Chamber of Commerce et al. v. Becerra et al. Brings Meritless Challenge to Medicare, Threatening Billions in Savings for Seniors and Taxpayers 

Washington, DC — Today, a federal judge in Ohio held oral arguments in a lawsuit brought by the Chambers of Commerce to stop Medicare from negotiating lower drug prices for millions of seniors. The lawsuit was brought by a group of national, state, and regional Chambers of Commerce that asked for a nationwide preliminary injunction to halt the Biden administration’s implementation of the program and allow drug companies to continue to charge whatever they want for lifesaving medications. A ruling on the case is expected before October 1st.

The Chambers’ case is one of eight meritless lawsuits seeking to protect drug companies’ outrageous profits. While the drug companies rake in billions and force seniors to skip doses of their life saving medicines, they charge up to four times more in the U.S. than in other countries. Read more about the lawsuits brought by big drug companies and their allies here.

In response, Protect Our Care Chair Leslie Dach issued the following statement: 

“This case has no legal merit. Drug companies and the Chambers of Commerce that are doing their bidding are basically asking a judge to protect their massive profits at the expense of millions of seniors. This case is just one of many in which drug companies and their mega lobbying group allies are desperately suing the federal government in an effort to protect their ability to charge whatever they want for drugs that millions rely on to stay alive. Meanwhile, seniors are cutting pills and skipping doses of lifesaving medications. Millions are depending on the savings from the Medicare negotiation program, and it is vital that Judge Newman reject this meritless lawsuit.” 

***MEDIA ADVISORY FOR MONDAY SEPTEMBER 18 AT 11:00 AM ET // 10:00 AM CT***

The CARE for Moms Act Includes Historic Investments to Strengthen Health Care Coverage During and After Pregnancy, Grow and Diversify the Doula Workforce, and Address Underlying Causes of Maternal Mortality

Washington, DC — On Monday, September 18, 2023 at 11 AM ET, U.S. Representative Robin Kelly (D-IL-02) and National Medical Association President Dr. Yolanda Lawson will join Protect Our Care to discuss her new legislation, the CARE for Moms Act, which is a comprehensive plan to combat the U.S. maternal mortality crisis. The bill includes critical steps to save lives, including by investing $35 million in state-based grants to improve perinatal care, mandating Medicaid coverage for new moms one year postpartum, extending Medicaid oral health coverage to pregnant and postpartum women, addressing implicit bias in the health care training, increasing and diversifying the doula workforce, and more. 

During the call, speakers will discuss how the CARE for Moms Act takes a multifaceted approach to promoting the health and safety of new mothers and their babies and the urgent need to stop the worsening maternal mortality crisis. More than 1,000 women die annually due to complications of pregnancy or childbirth, making the U.S. maternal mortality rate three times higher than other wealthy nations. Black and Native women are at significantly greater risk of facing serious complications. Representative Kelly will introduce the CARE for Moms Act on September 19.

PRESS CALL:

WHO:
U.S. Representative Robin Kelly (D-IL-02)
Dr. Yolanda Lawson, President of the National Medical Association
Dr. Phyllis Dennery, Pediatrician-in-Chief at Rhode Island Hospital, Medical Director of Hasbro Children’s Hospital, Vice Chair of March of Dimes Board of Trustees
Sara Jann Heinze, Director of Policy & Advocacy at Maternity Care Coalition
Protect Our Care

WHAT: Virtual Press Conference 

WHERE: Register for the Event Here

WHEN: September 18, 2023 at 11 AM ET

Drug Companies Falsely Claim Innovation Will Suffer As Patients in America Cut Pills and Skip Doses to Make Ends Meet

The Biden administration recently announced the first round of high-cost drugs whose prices will come down as Medicare negotiates with the drug companies. The new program, which is overwhelmingly popular with voters from all parties, will lower costs for certain drugs used to treat conditions like cancer, diabetes, heart disease, and autoimmune disorders – which disproportionately impact women, communities of color, and people in rural areas.

However, big drug companies are suing in the courts to try to stop the Inflation Reduction Act’s core provision of giving Medicare the power to negotiate lower drug prices. They have also started a campaign of lies in an attempt to persuade people that allowing Medicare to negotiate lower prices will prevent drug companies from introducing innovative drugs. But innovation isn’t really what the drug companies are worried about – they just want to protect their profits, continue to line their CEOs’ pockets, and take advantage of patients. In reality, giving Medicare the power to negotiate will save seniors and taxpayers billions while rewarding innovative drugs. 

Legal and health care experts are fighting back against the misinformation campaign. Here’s what they have to say:

Cynthia Ho, Director of the Intellectual Property Program at Loyola University of Chicago School of Law, and Liza Vertinsky, Law Professor at the University of Maryland Francis King Carey School of Law, said: “Once a More Nuanced Approach to Innovation Is Considered, the IRA Might Even Increase Innovation in Higher Public Value Drugs.” “We posit that the current lawsuits and other backlash against the IRA are simply the latest examples of what we refer to as “innovation bullying” by the pharmaceutical industry. And we suggest that this innovation bullying has real costs that can and do deter welfare-improving drug regulation and even valuable innovation.” [Health Affairs, 9/11/23]

Ed Silverman, Pharmalot Columnist and Senior Writer at STAT, said: “If the Pharmaceutical Industry Expects the Public to Heed Its Warnings, It Will Have to Do a Better Job of Explaining Why Swaths of Patients May One Day Lose Out on Treatments.” “Beyond complaining about price controls and unconstitutional mandates, the key message aimed at the American public has been that innovation will suffer. This is a familiar but tiring refrain. When policymakers have attempted to address prescription drug costs in the past, the industry has often rattled this sabre, warning any attempt to rein in pricing would boomerang and some therapies will never be developed.” [STAT, 9/7/23]

The Brookings Schaeffer Initiative on Health Policy’s Richard G. Frank and Caitlin Rowley said: “Despite the Pharma Companies’ Fears, Negotiating Medicare Prices Will Not Lead to a ‘Nuclear Winter.’” “However, such forecasts are unfounded. […] Not only are revenues enough to justify the investment in these particular drugs, they are enough to fund several more generations of pharmaceutical development. Lower negotiated prices are unlikely to deter further investment in similar medications.” [Bloomberg Opinion, 9/5/2023]

The Brookings Schaeffer Initiative on Health Policy’s Richard G. Frank and Ro W. Huang said: “To Date, We Have Found Little Evidence Suggesting a Disruption in Activities and Investments That Will Yield New Pharmaceutical Products in the Years to Come.” “When coupled with optimism expressed in recent large drug company earnings reports, the evidence indicates that the investment environment for drug development remains largely unchanged by the IRA’s drug price negotiation program and is currently not threatened by it.” [Brookings Institution, 08/23/23]

Rachel Sachs, Professor of Law at Washington University, and The Brookings Schaeffer Initiative on Health Policy’s Loren Adler and Richard G. Frank said: “IRA Opponents’ Innovation Concerns Are Overstated and Oversimplified, Overlooking Important Dimensions of Innovation for Patients.” “The oversimplified vision of “innovation” and the IRA’s relationship to it presented by many of the law’s detractors simply do not match the nuanced vision of innovation encompassed either in the IRA or in adjacent policies that the Biden Administration has simultaneously pursued. […] Taken together, it is even possible that these combined changes could increase the development of higher-value drugs, and at the same time reducing costs and increasing patient access.” [Health Affairs Scholar, 6/20/23]

Former U.S. Representative Henry A. Waxman, Chairman of Waxman Strategies, said: “Above All, An Innovative Drug Doesn’t Help Anyone If It Is Unaffordable.” “The reality is there is currently no correlation between a drug’s list price and its R&D costs. The price of insulin has skyrocketed by 64 percent since 2014 not because of innovation, but because the drug companies could get away with it. […] The manufacturer AbbVie doubled Humira’s price from about $19,000 per year to $38,000 per year for Americans. But in Europe, the company cut the drug’s price by 80 percent and is still not losing money.” [Health Affairs, 12/10/19]

Michael A. Carrier, Professor of Law at Rutgers University School of Law, and Genevieve Tung, Associate Director for Educational Programs at the Biddle Law Library, said “Drug Companies Play Games.” “Big Pharma has cried Innovation Wolf every time Congress seeks to address its shenanigans. And the legislators keep coming to defend it. That has to stop. It is past time for the industry to be called to account on using its get-out-of-jail-free innovation card to avoid reasonable legislation.” [STAT, 9/26/19]

Larry Levitt, Executive Vice President for Health Policy at KFF, said: “The Issues Raised by Critics Can Be Complex and Nuanced, Involving Trade-Offs Not Always Easily Condensed Into Sound Bites.” “One of the big reasons any effects on innovation may be muted is that drugs are shielded from government negotiation for quite a while: until nine years after Food and Drug Administration approval for small-molecule drugs like pills and 13 years for injectable biological products. Drugmakers can continue to set their own prices and reap substantial profits before having to submit to negotiation.” [New York Times, 9/6/23]

Today, the federal government will be filing a judgment motion in Merck v. Becerra et al. Merck is one of several drug companies suing the federal government to stop Medicare from negotiating lower prescription drug prices on behalf of millions of seniors. Merck’s Januvia was recently announced as one of the 10 drugs selected for negotiation. This comes just after Merck announced it raked in $15 billion last quarter – a $450 million increase over last year. While they make billions, Americans pay exorbitantly high prices for prescription drugs. 

By The Numbers

• Merck has reported nearly $51 billion in global sales for Januvia since it launched in 2006. 
• Januvia is responsible for over $28 billion in gross Medicare spending as of 2021. 
• Merck has issued over $200 billion in stock buybacks since launching Januvia.
• Merck has spent over $115 million on lobbying since launching Januvia.
• Merck has been on the market without competition for over 17 years. 
• In 2022, 885,000 Medicare enrollees took Januvia. 
• Januvia costs the average Medicare enrollee without a subsidy over $500 per year out-of-pocket.
• Merck reported $15 billion in earnings for Q2 2023, a 3% increase from Q2 2022. 
• Merck initiated over $300 million in stock buybacks in Q2 2023. 
• Merck’s stock price has increased 24% over the past year. 

Merck Has Made Billions From Januvia At The Expense of Seniors. Merck has reported nearly $51 billion ($50,897,600,000) in global sales for Januvia since it launched in 2006. Januvia is responsible for $28 billion in gross Medicare spending. Merck has issued over $200 billion in stock buybacks since launching Januvia and spent over $115 million on lobbying. In 2022, 885,000 Medicare enrollees took Januvia. Januvia costs the average Medicare enrollee without a subsidy over $500 per year out-of-pocket.

Merck Has Gamed The Patent System To Protect Billions In Revenue. Merck has been on the market without competition for over 17 years, and Merck has gamed the patent system to thwart competition for an additional 3.3 years, protecting $3.5 billion in revenue.

Instead Of Spending On Research & Development, Merck Has Spent Lavishly On Stock Buybacks To Boost The Company’s Value and Reward Shareholders. Rather than pricing Januvia at an affordable and accessible price, Merck has spent hundreds of billions on stock buybacks to boost its investors and reward its executives. While the company rakes in billions, U.S. drug prices for Januvia are up to nine times higher than prices in other high-income countries like Australia.

Merck’s stock price has increased 24% over the past year after the company initiated $300 million in stock buybacks in Q2 2023. On Aug 1, CFO Caroline Litchfield touted the company’s “very strong growth of 14%” and said they expect that to continue: “As we look out to 2024 and beyond, we continue to expect strong growth including the impact of additional approvals.” Merck also acquired Prometheus Biosciences for $10.8 billion in June.

Read more about why Medicare needs the power to negotiate lower drug costs and the five drugs that tell the story, including Januvia, here.

The Biden administration announced the first round of high-cost drugs whose prices will be lowered as Medicare begins to negotiate with drug companies. The new program created by the Inflation Reduction Act will lower costs for some of the highest-priced prescription drugs on the market used to treat conditions like cancer, diabetes, and autoimmune disorders – conditions that disproportionately impact women, communities of color, and people in rural areas.

President Biden and Democrats in Congress stood up to big drug companies and won a decades-long battle to lower the cost of prescription drugs for millions of Americans  . Negotiating lower prices is overwhelmingly popular across the country, yet big drug companies are suing the federal government to protect their massive profits by halting the program, and Republicans are attempting to repeal the Inflation Reduction Act entirely. Read more about the first 10 drugs here.

ALABAMA

Alabama Political Reporter: How Alabamians Will Be Affected by the Medicare Drug Price Negotiation Program. “According to Protect Our Care, a non-profit organization dedicated to affordable health care, approximately 166,000 Alabamians will see lower drug prices as a result of the negotiations…Founder and president of Protect Our Care, Leslie Dach, released a statement discussing the importance of the price negotiations. ‘Americans deserve financial security and some peace of mind when they go to sleep at night,”  But, too many are forced to choose between being able to afford their medicines or paying for food or housing. Prescription medicines cannot work if people cannot afford to take them, and high drug prices are keeping too many Americans from the health care they need. Patients should not be paying out-of-control prices for medicines they need when all it’s doing is increasing drug company profits and footing the bill for outrageous CEO salaries. President Biden and Democrats in Congress stood up to big drug companies and won a decades-long battle to lower the cost of prescription drugs by giving Medicare the power to negotiate lower prices. The Biden administration is laser-focused on making medications affordable for families and ending the era of drug companies’ unchecked power and greed.’” [Alabama Political Reporter, 9/8/23]

ARIZONA

ABC15 Arizona: Valley Seniors Hope Negotiating Prescription Drug Prices Will Help Save Money. “‘The number one reason why seniors skip or ration their medications is because they cannot afford it. So, this will save millions of Arizonans a lot of money on their prescription drug costs,’ said Dana Kennedy, State Director for AARP. Medications to treat heart disease, diabetes, and Crohn’s disease are among the most expensive prescriptions in Medicare Part D.” (ABC15, 9/4/23)

ARKANSAS 

KARK Little Rock: Biden Administration Names 10 Drugs for Price Negotiation. “The drugs on the list announced Tuesday accounted for $3.4 billion in out-of-pocket costs for Medicare patients last year. The Medicare program paid more than $50 billion for the drugs between June 1, 2022, and May 31, according to the Centers for Medicare and Medicaid Services, or CMS. The announcement Tuesday is another significant step toward taming drug pricing under the Inflation Reduction Act, which was signed by Biden last year. The law also calls for a $2,000 annual cap on how much people with Medicare have to pay out of pocket for drugs starting in 2025. In addition, the law already caps out-of-pocket costs for insulin at $35 a month for Medicare patients.” [KARK Little Rock, 8/29/23]

CALIFORNIA

Noozhawk Santa Barbara: 5 Things to Know About the New Medicare Price Negotiation Rule. “Until now the drug industry has successfully fought off price negotiations with Washington, although in most of the rest of the world governments set prices for medicines. While the first 10 drugs selected for negotiations are used by a minority of patients — 9 million — CMS plans by 2029 to have negotiated prices for 50 drugs on the market. Biden administration officials say reining in drug prices is key to slowing the skyrocketing costs of U.S. health care. The drugs selected by CMS range from specialized, hyper-expensive drugs like the cancer pill Imbruvica (used by about 26,000 patients in 2021 at an annual price of $121,000 per patient) to extremely common medications such as Eliquis (a blood thinner for which Medicare paid about $4,000 each for 3.1 million patients). Medicare price negotiations will equip private health plans to drive a harder bargain. David Mitchell, president of the advocacy group Patients for Affordable Drugs, predicted that disclosure of negotiated Medicare prices ‘will embolden and arm private sector negotiators to seek that lower price for those they cover.’” [Noozhawk Santa Barbara, 5/2/23]

COLORADO

KOAA News5 Colorado: More Than 100,000 Coloradans Could See Price Cuts in Ten Medicare Prescriptions. “More than 100,000 Coloradans could see cuts to their costly medications. Ten are up for negotiation, which includes treatment to life-threatening conditions like cancer, heart failure, and diabetes.” (KOAA, 9/5/23)

GEORGIA

11 Alive Georgia: Patients Excitedly Welcome Price Negotiation for Expensive Drugs. “The Biden Administration revealed the first 10 prescription drugs Medicare will negotiate under the Inflation Reduction Act meaning patients could soon pay less to get life-saving care. Diane Loupe, 66, of Decatur, takes Xarelto. She ended up with the prescription after thinking that she just had bad varicose veins. The luxury of life comes with a hefty price. Loupe said her prescription went from $10 a month to $85 a month. She has Medicare, but without insurance, pharmacies say blood thinners like hers can cost way more. 11Alive talked to a few local pharmacies. Most of the medications on the list can cost over $600. Several pharmacies say they don’t even keep them in stock because they’re so expensive. However, White House Press Secretary Karine Jean-Pierre said that’s about to change. ‘These 10 drugs, in last year, in 2022 cost Americans $3.4 billion, about $6,000 out-of-pocket expenses – just for one drug,’ Jean-Pierre said.” [11 Alive Georgia, 8/29/23]

HAWAII

Hawaii Tribune-Herald: Biden’s Medicare Drug Pricing Plan is Good Medicine for Americans. “The VA takes care of veterans, Medicaid (whose costs are shared with states and localities) is coverage for the poor and Medicare is health insurance for seniors and people with disabilities. The VA and Medicaid can, and do, negotiate with suppliers on drug prices, just like they negotiate payment levels for other health services. Yet Medicare, which sets the reimbursement rates for doctors and hospitals, is barred by federal law from negotiating on drugs. That’s the doing of the well-heeled pharmaceutical lobby. It took a long time, but the change finally came last year with President Joe Biden’s… Inflation Reduction Act. The law, signed a year ago this month, permitted Uncle Sam (meaning Secretary of Health and Human Services Xavier Becerra) to haggle over the prices of medications. Biden has now announced the first 10 drugs. The negotiations, by the Centers for Medicare &Medicaid Services, will take years and the lower prices for consumers will begin in 2026. There will be another 50 drugs over the next four years up for negotiations and after that, 20 a year. And Big Pharma is fighting all the way, already in court to stop it. One of the drugs on the list, Imbruvica, for blood cancer, runs $17,000 a month, or $204,000 a year. Whatever the reason [for the price], it can be addressed during the talks now permitted between Medicare and the supplier, a joint product of AbbVie and Johnson & Johnson.” [Hawaii Tribune-Herald, 9/2/23]

ILLINOIS

Chicago Tribune (Commentary): Big Pharma is Wrong, Medicare Price Negotiation Won’t Hinder Innovation. “Big Pharma is pulling out all the stops to avoid lowering drug prices for seniors. Their legal strategy is tantamount to ‘throwing the kitchen sink at the government,’ as one expert described it, with various lawsuits arguing violations to the First, Fifth, and Eighth amendments. The pharmaceutical industry has argued that negotiating Medicare prices with the federal government will force them to pull back on developing groundbreaking new treatments. The argument relies on a central falsehood: that the government does not subsidize investments in pharmaceutical innovation. But evidence shows that public sector investments in basic and applied biomedical research — primarily from the National Institutes of Health — contribute substantively to the emergence of new drugs and drug-related patents. Amazingly, given the pervasiveness of the industry’s argument, a recent study found that NIH funding contributed to nearly all (99.4%) of FDA-approved drugs from 2010 to 2019, and the magnitude of NIH investment in new drugs is comparable with that of the industry. These findings clearly suggest that the public deserves a more equitable return on its investment relative to the pharmaceutical industry’s investment.” [Chicago Tribune (Commentary), 9/3/23]

WGEM Quincy Illinois: Medicare Will Now Be Able to Negotiate Prices for 10 Drugs. “Some seniors have had to make tough choices between their medication and other necessities. Under a new policy announced last week, Medicare will negotiate the price of ten of the most costly prescription drugs on the market with manufacturers. Rob Ritchey, the Administrative Director of Pharmacy with Blessing said drug prices are based on how much money the government pays for the medication. He said last year the government spent $50 billion on prescription drugs. Mary Crawford, the West Central Illinois Area Agency on Aging Grant and Program Manager said seniors commonly use the drugs on the list, and those drugs really eat away at their budgets. She said its an important first step to have Medicare play a role in negotiating drug prices. She said for seniors who need assistance, programs to help them pay for their medication exist. Crawford said the current steps the federal government has taken; such as capping the price of insulin and will soon expand the extra help benefits which will reduce what people pay for premiums, deductibles, and co-pays. She says steps like these make her hopeful for other actions down the road.” [WGEM Quincy Illinois, 9/5/23]

IOWA

Iowa Public Radio: Understanding the Historic Plan for Medicare Drug Price Negotiations. “The Biden Administration announced that ten prescription drugs have been selected for Medicare price negotiations for the first time. The power to negotiate the prices comes from the Inflation Reduction Act, passed last year.” [Iowa Public Radio, 9/8/23]

KGAN Iowa: Biden’s Inflation Reduction Act to Lower Prices of Key Drugs for Iowans: A Relief for Millions. “President Biden announced the first 10 drugs to have lower prices under the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. The new program requires big drug companies to negotiate lower pricing for the high-cost drugs used for treating conditions like cancer, diabetes, and heart disease. Lower Pricing will help millions across the country and Iowa.” [KGAN Iowa, 9/7/23]

The Gazette: Over 36,000 Iowans Will Be Affected by Price Negotiation Rule. “Roughly 36,000 Iowans on Medicare pay an average of $650 each year to take the blood thinner Eliquis, according to federal data, but that copay could fall in future years under a new federal law being celebrated by President Joe Biden’s administration and Iowa Democrats. The measure, part of the so-called Inflation Reduction Act, allows the federal government to negotiate prices with prescription drugmakers. This week, the Biden administration highlighted potential cost savings for the first 10 drugs whose prices the administration plans to negotiate in the coming years. However, any lower prices won’t take effect for three years, and the path forward could be further complicated by litigation from drugmakers and heavy criticism from Republicans. In addition to the 36,000 Iowans on Medicare who paid an average of $650 in 2022 on Eliquis, 15,000 paid an average of roughly $640 for another blood thinner, Xarelto, according to federal data. And 12,000 paid roughly $470 for the diabetes treatment medication Jardiance. Iowa’s average out-of-pocket costs for those three most commonly used drugs are among the highest in the country, according to the federal data. In 2022, Iowa had the fifth-highest average annual out-of-pocket cost for Eliquis, Xarelto and Jardiance. In a statement, Iowa Democratic Party Chair Rita Hart called on Republican presidential candidates who have been campaigning in Iowa to make clear their position on the legislation and the measure that allows the federal government to negotiate Medicare drug prices.” [The Gazette, 8/31/23]

LOUISIANA

The Times Picayune NOLA: How Medicare Price Negotiation Will Help Louisiana Medicare Enrollees. “It was the biggest news of the week — or at least the news with the most fanfare — and its success could mean that many of the roughly 883,000 Louisiana seniors on Medicare would no longer have to choose between buying medication or food, says AARP Louisiana. The White House announced Tuesday that the Centers for Medicare & Medicaid Services would commence negotiating lower prices with the major drug manufacturers, often known as Big Pharma, for 10 drugs frequently prescribed to seniors. CMS got authority to negotiate prices for the first time under the Inflation Reduction Act, passed last August. CMS calculates at least 151,000 Louisiana seniors on Medicare take one or more of the 10 initial drugs on the list. Mean annual out-of-pocket expenses cost those seniors between $93 for Novolog and $4,500 for Imbruvica. About 55,000 Louisiana Medicare enrollees have been prescribed the heavily advertised Eliquis to treat blood clots and have to personally pay an average of $372 after Medicare pays its portion. For those who take Jardiance for diabetes, that’s another $237 out of pocket. U.S. Rep. Troy Carter of New Orleans, the only Democrat Louisiana voters have sent to the House, said: ‘This will lower prescription drug costs for seniors in Louisiana and around the country.’” [The Times Picayune NOLA, 9/1/23]

MAINE

The Press Herald Maine: Biden’s Big Deal on Drug Prices. “President Biden announced the first price negotiations over 10 super-expensive Medicare drugs last week through the Inflation Reduction Act as if it were a big deal. It is. In fact, it’s the first time since the program’s creation under Lyndon Johnson in 1965 that Democrats have struck a major blow toward reducing the program’s costs for taxpayers. The drugs on the Biden administration’s list cost, on average, three times what other nations pay: 300% more. That explodes the drug company argument that such prices are necessary to avoid stifling innovation. Why should Americans, alone, pay through the nose so Germany, France and Sweden can get steep discounts on the very same pills? [Price negotiation is] a start, and if it becomes a trend, it could finally mark a new direction is the dismal course of the American health care system, which becomes more corporatized and bureaucratized, more remote from the people it’s supposed to serve with each passing year.” [The Press Herald Maine, 9/7/23]

News Center Maine: How Mainers Will Benefit From Medicare Price Negotiations. “President Joe Biden has revealed a plan to lower the cost of 10 prescription drugs for seniors by allowing Medicare to negotiate the price with drug companies. The drugs include those that treat diabetes, heart disease, and cancer. Dr. Karen Saylor works at Coastal Maine Direct Care in Falmouth. She said her patients sometimes have to choose between paying large amounts of money for important medications or not taking them at all. But that might change. Some of those medications are among 10 drugs that could have their prices slashed in negotiations between the government and drug manufacturers, which was authorized by the Inflation Reduction Act passed by Congress last year. The effects of this change are expected to be wide-reaching in Maine. Medicare enrollees taking the medications here in the state paid out-of-pocket costs of up to nearly $5,000 in 2022. Savings for the 10 drugs won’t come until 2026, but for Saylor’s patients, she said it will be worth the wait.” [News Center Maine, 9/1/23]

MASSACHUSETTS 

Boston Globe (Opinion): Medicare Drug Price Talks Are Lauded by Americans. “[W]e the people are winners as we begin reining in excessive prescription drug prices. Skyrocketing prices lead to higher health care premiums, higher taxes to pay for Medicare and Medicaid, and higher costs at the pharmacy counter. According to the state Center for Health Information and Analysis, prescription drug spending increases outpace other health care spending in Massachusetts. Spending on prescription drugs grew 7.7 percent in 2020, more than twice the 3.1 percent state benchmark for increases in overall health care spending. President Biden’s plan to allow Medicare and Medicaid to negotiate prices for some prescription drugs unraveled an absurd prohibition the pharmaceutical industry pushed through Congress 20 years ago. Negotiation is crucial as drug companies keep US prices inflated by blocking generic competitors through patent-extending tactics. Unsurprisingly, the pharmaceutical industry opposes the plan. The rest of us are all in. We’ll need more reforms for a fairer medication marketplace, but this is a great start.” [Boston Globe (Opinion), 9/4/23]

NORTH DAKOTA

Public News Service: North Dakotans See Light at the End of the Tunnel on Prescription Costs. “Older North Dakotans and a key advocacy group are hopeful that seniors will see relief from the heavy burden of prescription drug costs – and they’re hailing a big step announced this week. The Biden administration unveiled the first 10 medications that will be subject to price negotiations under the Medicare program. The action is part of the Inflation Reduction Act approved by Congress. Bismarck resident Bob Entringer has used one of the medications on the list since 2017. When he retired and switched to Medicare, he found out the blood thinner would be almost $500 for a 90-day prescription. Policy experts note that other IRA provisions are already helping beneficiaries. Josh Askvig, AARP North Dakota state director, [said] that for too long, drug makers have prioritized profits over the people who desperately need some of these medications. ‘We know the number one reason seniors skip or ration their prescriptions is because they can’t afford them,’ he said, ‘and this must stop, and this is an important step in that direction.’” [Public News Service, 9/1/23]

PENNSYLVANIA

Lehigh Valley News: U.S. Rep. Susan Wild: Start of Medicare Drug Negotiations Is Cause for Celebration. “Niebell’s cardiologist had prescribed her two of the 10, the blood thinners Xeralto and Eliquis, as they searched for critical medication to which she wouldn’t have an allergic reaction. […] “These prices never should have been this high,” Niebell said, using a hot pink cane to keep her balance at the podium. “We, as seniors, we have enough to worry about, and the doctor shouldn’t have to listen to me whine about the cost every time he sees me.” [Lehigh Valley News, 9/5/23]

The Morning Call: ‘These Prices Never Should Have Been So High’: Susan Wild, Advocates Tout Savings From Medicare Drug Price Negotiations. “The savings primarily will benefit the 65 million people enrolled in Medicare. Enrollees in the government health insurance program paid $3.4 billion out-of-pocket last year for the 10 aforementioned prescription drugs — a number that will likely be slashed thanks to price negotiations. The United States has historically been behind countries like Canada, Mexico and many European countries that allow price negotiations and tend to have more affordable prescription drugs.” [The Morning Call, 9/5/23]

The Philadelphia Tribune (Commentary): Medicare Price Negotiations Will Give Pennsylvania Seniors Relief at the Pharmacy Counter. “On Aug. 29, the U.S. Department of Health and Human Services, through the Centers for Medicare and Medicaid Services, announced more federal action to increase access and affordability for Medicare recipients. Medicare will now be able to negotiate the price of prescription drugs, starting with 10 medications covered under Medicare Part D, thanks to the Inflation Reduction Act. I applaud President Joe Biden’s continued efforts to improve health equity for elder Americans. Citizens of all ages, not just here in Philadelphia but across the state and country, struggle to afford critical, lifesaving medications to help manage their chronic conditions. Sen. Bob Casey, a vocal supporter of lowering drug prices and providing more access to life-saving treatment, is providing additional support at the federal level. I am proud to see the Affordable Prescriptions for Patients Act introduced in Washington. That legislation would prohibit the pharmaceutical industry from using anticompetitive practices that block competition and keep drug prices high. These critical steps at the federal and state level are necessary and long overdue to help solve our drug pricing crisis while increasing access and affordability. Together, we can help everyone see relief at the pharmacy counter.” [The Philadelphia Tribune, 9/5/23]

VIRGINIA

Loudoun Times-Mirror: HHS Secretary Touts New Drug Price Negotiation Rule at Clinic in Virginia. “Becerra compared Medicare not being able to negotiate to a car buyer who has to pay the sticker price on a vehicle in a car lot. He noted the U.S. Department of Veterans Affairs negotiates on drug prices, as do many governments in other industrialized nations. Becerra added that the 10 drugs account for 20% of all annual Medicare spending for prescription drugs. Under the IRA, the results of negotiations for an additional 15 drugs take effect in 2027. Another 15 take effect in 2028. Becerra said the number rises to 20 drugs annually beginning in 2029. In a brief interview after the event, Becerra vowed to ‘vigorously defend’ the IRA in court. ‘We feel very confident that what Congress passed, they took into account all the different factors in making it possible for us to negotiate,’ he said. ‘We feel like the law is on our side and we are going to be vigorous in defending this new law because we know that tens of millions of Americans are counting on it.’” [Loudoun Times-Mirror, 9/5/23]