Fixing Medicare for America’s Seniors

As our aging population continues to grow, Medicare Parts B and D will play an increasingly important role in providing access to lifesaving medicines for tens of millions of Americans. And ensuring timely, affordable access to new medicines for seniors has never been more vital as we enter the age of curative therapies and disease-modifying treatments for debilitating conditions.

“It's really not an overstatement to say we're in the golden era of medicine,” noted Stephen J. Ubl, president and CEO of PhRMA, in a discussion with the Alliance for Health Policy’s President and CEO, Sarah Dash. But, as Dash pointed out, “did our system grow up in a way that is going to be able to afford it?”

To discuss how we can evolve Medicare to enable affordable access to tomorrow’s promising science, Ubl and Dash were joined by policymakers and other health care thought leaders in a recent event hosted by The Atlantic and sponsored by PhRMA, titled The State of Care: Future of Medicare.

A number of the panelists noted that many seniors today are being forced to shoulder a greater portion of the costs of their medicines in Part D – even when drug spending has been growing under the rate of inflation – leading to affordability challenges that can impact access to treatment.

As Ubl observed, “you would think if…drug spending was going down and rebates were going up that patient out-of-pocket spending would also be going down, but it's not. For patients that have a deductible, their out-of-pocket spending has gone up by over 50% in recent years.”

There are several proposals being debated in Washington to address this problem in Part D. One solution on the table is to encourage health plans and pharmacy benefit managers to share the billions in rebates and discounts they receive from biopharmaceutical companies with Part D beneficiaries at the pharmacy counter. Others are considering whether to place an annual cap or a maximum for what seniors on Part D pay out of pocket for medicines.

At the same time, there are some proposals being considered that are not focused on helping patients afford their medicines. One example, the so-called Part B International Pricing Index Model, would take an anti-competitive approach to changing Medicare Part B by implementing government-set prices on medicines that are administered in a doctor’s office. According to Gail Wilensky, the former head of the Centers for Medicare and Medicaid Services and a current senior fellow at Project HOPE, this could have long-term repercussions for innovation: “[it’s] the pipeline and the R&D investment that would be impacted by a price-controlled world.”

America’s biopharmaceutical companies are committed to advancing pragmatic, pro-consumer solutions that help seniors access the medicines they need without harming the next generation of Medicare beneficiaries. As Ubl concluded in his remarks, “there are a number of steps that we can take to control costs in a thoughtful way and to lower patient out-of-pocket costs, without arresting this incredible wave of medical progress that we're seeing.”