Dr Tricia Neuman on Medicare Drug Negotiation and Part D

With the recent increase of high-priced drugs, the idea of drug price negotiation in Medicare is receiving more attention as even Part D beneficiaries feel the pinch, said Tricia Neuman, ScD, director of the Kaiser Family Foundation's Program on Medicare Policy and the Project on Medicare's Future.

Transcript (modified)

Is the push to allow Medicare negotiate drug prices getting more traction now compared with when it was brought up in the past?

I do think it’s getting more traction for a couple of reasons. One, when Sovaldi came onto the market with its $1000-per-pill price tag that really got everybody’s attention. While everybody was thrilled to see a cure, there was also concern about what the cost would be to public payers like Medicaid and Medicare, but also for people who incur high expenditures.

More importantly, and more broadly, drug costs are rising and they are affecting all payers. And this is a big change from what we’ve seen in prior years where—at least in the case of Medicare—drug spending has been growing very slowly, and slower and much lower than what was projected by the Congressional Budget Office (CBO). So something is changing right now, which is giving this issue more traction, and now the presidential candidates are actually talking about this. I think this speaks to the real urgency that the public feels, and that might be the starting point for future discussions and political debate on the topic.

Is Medicare Part D keeping drug spending under control?

Well, it had been since 2006 when the drug benefit was enacted. Medicare drug spending has come in much lower than what the CBO had projected: premiums were relatively flat, people were pretty satisfied with their drug coverage, and it wasn’t getting much attention. That all has changed in the past couple of years with the introduction of Sovaldi and other high-priced drugs. Where suddenly Medicare costs are rising for prescription drugs, premiums are going up, and even people with Part D are feeling the pinch of rising healthcare costs and high prices, which are helped by the drug benefit but not entirely eradicated.