How a defeat in Congress could translate into a victory for patients
The negotiation of drug prices by Medicare would stifle the development of essential therapies. Reducing defensive medicine and rolling back excessive regulation would be a better way to control health care costs.
The never-ending battle over whether Medicare will be able to down-negotiate drug prices with the drug companies that create them appears to be suffering another setback.Moderate democratsbalk and it is increasingly unlikely that the party leadership will win the votes necessary to pass this part of the proposed $ 3.5 trillion reconciliation plan. The Democratic caucus would do better by targeting more successful revenue streams than targeting the top innovators in medical care.
According to Congressional financiers, allowing Medicare to negotiate drug prices would free up between $ 428 billion and $ 700 billion to be spent elsewhere. These “savings” would be applied to the creation of new entitlements within Medicare.
A noble compromise? Not here. Overall, a defeat in this case is clearly the preferable outcome for patients with a multitude of medical conditions. To demand a haircut of $ 700 billion from the pharmaceutical industry would lead to very real slowdowns in the creation of new drugs. A recentCBO studyestimates that more than 50 new drugs a year would simply not appear to patients if the bill became law.
Unmet medical needs, where pharmaceuticals can play a vital role, affect millions of Americans. By 2030, it isfelt thatmore than a million people could die each year from cardiovascular disease, a disease that today kills an estimated 660,000 – more people than Cancerannually. Therapiesare still neededfor degenerative brain diseases such as Alzheimer’s disease, whichtake life approximately 500,000 Americans each year, as well as many conditions that disproportionately impact women, such as fibroids, osteoporosis, and female sexual dysfunction.
Politicians have really put the pharmaceutical industry in a bind. On the one hand, they stoke the resentment of their constituents and castigate the companies for having “overcharged” the Americans. On the other hand, they require drug innovators and developers to go through an extremely expensive drug approval process.
You can’t have both. If you want to make a material contribution to lowering drug costs, you will have to drop the restrictions that make it so expensive for physicians and their patients to obtain new drugs. The cost of bringing a new treatment to market has beendoubleevery ten years and is currently estimated at $ 2.5 billion. Solving this problem would be an important step towards reducing drug prices if that is your goal.
Either way, drug prices are only a small part of the bigger problem. Yes, Americans spend more per capita on health care than people in other countries, and the prices we pay are higher as well. However, pharmaceuticals represent only 14 cents of every dollar spent on health care and is not the primary driver of cost inflation. The large majority (~ 80%) of the drugs Americans take are generics and do not pose a cost issue to consumers.
Indeed, most expensive prescription drugs are specialized biologics administered by injection that require careful manufacturing, shipping and storage protocols. So while there are savings to be made on the drug development side, reducing drug development savings seems, to the exclusion of everything else, counterproductive and materially compromises better health outcomes. patients.
If we are serious about saving money in health care, we need to target the real drivers. The reform of medical malpractice remains a good place to find savings. Defensive medicine practices, which lead to the ordering of unnecessary diagnostic tests, aim to protect physicians from liability. More often than not, defensive medicine offers significant benefits to patients and, on the contrary, increases costs by increasing malpractice insurance rates (which are passed on) as well as the cost of inconclusive test results.
Other promising avenues for reducing healthcare costs include reversing excessive government regulation, encouraging transparency, and reducing the dominance of third-party payers. Reforms in any of these areas could reduce costs to consumers and government, promoting greater accountability for health care outcomes, all without compromising safety or efficiency.
Michel abrams, MA, is the co-founder and managing partner of Numberof & Associates.