July 8, 2019
43 million seniors in the United States rely on Medicare Part D to provide them with the upmost care. A 2018 Gallup study found that 79% of Medicare beneficiaries think the quality of care they receive is excellent or good. If so many seniors are happy with their coverage, why do recent proposals want to change it?
Since its implementation, Medicare Part D has been an essential component in maintaining safe, reliable healthcare for millions of Medicare beneficiaries across the country. In addition to providing seniors with necessary treatments, Part D has spurred innovation and competition in the private sector. But recent proposals from Congress threaten this. You may have seen us talk about how price controls on drugs would jeopardize our innovative healthcare system, but not everyone got the message. A recent idea floating around the Senate is to institute a rebate penalty for Part D drugs whose prices increased above inflation. This will kill the effectiveness of Part D. Though keeping drug prices accessible and attainable for seniors is essential, creating a de-facto price cap is a misguided approach.
Introducing this fee will set a dangerous precedent that allows government interference and government set price controls to infiltrate the health care field. Medicare Part D currently operates on a system of negotiations that guarantees the lowest possible prices for the most effective drugs in the market. Providers and manufacturers negotiate the terms of drug prices, discounts and rebates to ensure that treatments are both accessible to patients and profitable for the innovators. Introducing price caps will sever the relationship between providers and manufacturers and disrupt the non-interference clause that preserves competition between manufacturers and keeps premiums low for beneficiaries. Allowing the government to dictate prices in turn allows socialized practices to enter the U.S. healthcare system, in addition to hurting competition and low drug pricing.
Innovative medicines are currently under the umbrella of Medicare Part D coverage and have allowed breakthroughs in the medical field reach patients quickly. Introducing an inflation-based cap that is tied to branded medicines would target innovative medicines while ignoring generics. This would hurt Medicare beneficiaries across the board as patients currently benefiting from innovative medicines, as well as patients who could benefit from future advances, will not have access to the most effective medicines.
Medicare Part D has allowed for millions of seniors to receive care that has vastly improved their long-term health. The current competitive structure has kept prices low, maintains accessibility to all medicines and satisfies the health care needs of our seniors. Senate Finance Committee Chairman Chuck Grassley, a seven-time senator from Iowa, agrees that foreign price controls have no place in our healthcare system, announcing his opposition to an International Price Index recently. Other conservative senators need to follow his lead and support market-based reform and reject policies that mess with prices. Changing this system will threaten the success of the program and will change the fabric of the United States health care system which relies on competition and innovation in order to thrive.
