Durbin: Inflation Reduction Act is Delivering for Americans by Granting Medicare Negotiating Power to Lower Prices for Medications
In a speech on the Senate floor, Durbin praised the Biden Administration for announcing the first 10 drugs under Medicare that will be subject to the Inflation Reduction Act’s new fair price negotiation program
WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) today delivered a speech on the Senate floor emphasizing the Inflation Reduction Act’s benefit to patients following the Biden Administration’s recent announcement of the first 10 drugs that would be negotiated for lower prices, based upon new authority passed by Democrats in Congress and signed into law by President Biden.
These 10 medications cost Medicare a total of more than $50 billion last year alone. In 2022, seniors nationwide spent more than $3 billion on copays for these 10 drugs, with an estimated 132,000 Illinois seniors each spending an average of $500 out-of-pocket on Eliquis, a blood thinner medication.
“People have talked about the cost of prescription drugs being too high for as long as I can remember, but last week President Joe Biden and Democrats in Congress marked a milestone in fulfilling a commitment to start bringing down the outrageous price of prescription drugs. For years, Americans have paid the highest prices in the world for medications,” said Durbin. “But last year, thanks to the Inflation Reduction Act, which Senator McConnell calls ‘prescription drug socialism,’ Democrats finally delivered for America's patients, granting Medicare the power to negotiate fair prices for medications used by seniors.”
“Not a single Republican Senator voted in favor of bringing down prescription drug prices in the Inflation Reduction Act. Not one,” Durbin noted.
The Veterans Administration (VA) has long held the power to negotiate prescription drug costs. As a result, the VA pays an average of half of what Medicare pays for the same drugs.
“The Veterans Administration says to the pharmaceutical companies, ‘Our veterans need your drugs, but we’re going to negotiate with you to get a pair price.’ That fair price means that the veterans are paying one-half what other families have to pay when they go to the drug store… I think if it’s good enough for America’s veterans, I think it’s good enough for seniors too,” Durbin continued.
The U.S. is one of only two countries in the world where Big Pharma is able to advertise drugs directly to consumers. Big Pharma relies on heavy media advertising to market their drugs and entice Americans to ask their doctors for these medicines by name, even if a generic drug is available for their condition. While these advertisements and marketing campaigns are effective in building Big Pharma’s own profit margins, consumers are rarely told the costs of the drug in the advertisements or until they pick up their prescriptions. To enhance transparency on this advertising scheme, Durbin introduced a bipartisan bill with Senator Chuck Grassley (R-IA), the Drug-price Transparency for Consumers (DTC) Act, that would require price disclosures on advertisements for prescription drugs.
“By filling the airwaves with these ads, Big Pharma is inflating the demand for the drugs. Some manufacturers spend over $100 million a year to make sure you can spell ‘Xarelto’ and then go ask your doctor for it. They never tell you what the price of the drug is, do they?” said Durbin. “Don't you think it's worth knowing that Xarelto costs $500 a month when a generic or lower-priced alternative may be just as effective?”
“Republican Senator Grassley and I have a commonsense, bipartisan bill… We would require Big Pharma to end the secrecy about the price of its drugs when running ads. Disclose the price right up front,” Durbin continued. “Bristol-Myers-Squibb and Pfizer spent more than $1 billion on ads for Eliquis. And doubled the price from $250 a month to $529 a month. The result? Medicare spent $16 billion last year on this blood thinner medication.”
Durbin went on to argue that hundreds of drugs on the market were developed with the assistance of the National Institutes of Health (NIH). Despite taxpayer dollars going into creating and developing new medications, patients struggle to access these drugs because of their inflated prices set by Big Pharma.
“Virtually all of the 356 drugs approved by the Food and Drug Administration between 2010 and 2019 were developed with research from the National Institutes of Health. What's the National Institutes of Health? It's the taxpayer-funded basic research agency that does the groundbreaking research that leads to these drugs. So the taxpayers are in on the cost of the drugs from the start,” Durbin said.
Durbin also called out Big Pharma’s tactics to extend the monopoly periods for blockbuster medications, by obtaining excessive secondary patents that block generic or low-cost forms of these drugs from reaching shelves. Many of these additional patents were secured after the drug’s approval by the Food and Drug Administration. This tactic contributes to additional costs to the Medicare program.
“When you discover a chemical formula that you think has potential to have some drug value, you file a patent. And you are protected for 20 years to develop that chemical compound and sell it to the public. So it's virtual monopoly control over the price of that drug during the patent period. The idea is that at the end of the patent, the formula becomes available to the public, and generic drug manufacturers can step in and make the same thing that you originally made at a fraction of the cost. The consumer finally at the end of the patent gets a break and gets the cost reduced. However, some very well-paid lawyers for the pharmaceutical companies find ways to stretch that patent on and on for years,” Durbin explained.
“The typical patent lasts for 20 years from the discovery of the chemical compound… But these ten drugs, that the President noted, have been loaded up with secondary patents, extending that period of monopoly sales for years and years. It's a scheme by Big Pharma to block competition, which brings prices down for consumers and for Medicare and Medicaid,” Durbin said. “By retaining extensive monopoly periods, the manufacturers have been able to charge Medicare and patients as much as they want.”
Before concluding his remarks, Durbin offered his rebuttal to U.S. Senate Minority Leader Mitch McConnell’s (R-KY) faulty argument that allowing Medicare to negotiate prescription drug pricing would stymie the development of new drugs.
“One of the arguments made by Senator McConnell was to reference a study at the University of Chicago. He said that if we go ahead with this so-called ‘prescription drug socialism,’ we're going to deny the discovery and marketing of 130 new drugs…The Congressional Budget Office looked at that study, which was done long before this bill was passed, and said in fact, we potentially stand to lose 13 new drugs over the next 30 years if we bring down the profit taking by these pharmaceutical companies,” Durbin argued. That reflects only one percent of the new drugs that are expected to enter the market during that timeframe. “If a drug is not affordable, it’s not accessible. A drug that you can’t afford, even if it’s on the market, is of no help to you and your family.”
Durbin concluded his speech by recognizing the significance of the Inflation Reduction Act’s move to allow Medicare to negotiate prices, even if Republican Senators refused to support the legislation.
“Finally, we have a President and an Administration that stopped talking about it and is doing something. What the President has said is that we are going to negotiate for American consumers and for Medicare the prices of these top ten drugs… All of these are going to be negotiated by the President to bring down the prices by authority created by Congress and a bill that passed with no Republican support. If the price of prescription drugs is important to you, understand that the battle is now joined. The President has announced we're going after these overcharging pharmaceutical companies. Finally, the American consumer is going to have a champion and have a break here in the cost of prescription drugs,” Durbin concluded.
Video of Durbin’s remarks on the Senate floor is available here.
Audio of Durbin’s remarks on the Senate floor is available here.
Footage of Durbin’s remarks on the Senate floor is available here for TV Stations.
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