Things Start To Change

“The world is changed. I feel it in the water. I feel it in the earth. I smell it in the air.”

-Galadriel

In 2023, United Healthcare, CVS, and Humana were finalizing their plans to rule the healthcare world. None of this would have been possible without the critical 2010 Supreme Court ruling on Citizens United, which allowed corporations to make unlimited political expenditures as long as the money did not go directly to a politician’s campaign. 

In 15 years of policy management, these private insurers built an untouchable world. For a politician to oppose policies wanted by these big donors risked the loss of millions of dollars of support or, worse, millions of dollars in marketing against them. It would take a lot of guts to stand up against them.

It took guts to place new individuals in key government positions. Accepting these positions took guts because, if the world doesn’t change, their stance against corporate desires could greatly hinder their ability to get a job after their positions ended. 

Yet, things were changing. The government had finally placed enough people and research in crucial administration areas to start turning this huge insurance and pharma political juggernaut. What are some of the policies that are beginning to squeak out the door and put a dent in this massive wall of legislation and corporate consolidation the private insurers have bought?

The Birth of Drug Price Controls in Medicare

It has been decades of effort to allow Medicare to negotiate drug prices with pharmaceutical companies. In August 2022, the Inflation Reduction Act was signed. The law focuses on many things, but the part important to Medicare is the focus on drug pricing. 

The law isn’t the first time Medicare prescription benefits have been modified. In 2003, President Bush signed the “Medicare Prescription Drug, Improvement, and Modernization Act“ expanding prescription drug benefits. Expanding prescription drug benefits without price controls has created a windfall for pharmaceutical companies. 

“In 2022, U.S. prices across all drugs (brands and generics) were nearly 2.78 times as high as prices in the comparison countries. U.S. prices for brand drugs were at least 3.22 times as high as prices in the comparison countries. “

For those of us who live along the Canada and Mexico border, crossing borders to fill prescription drugs is not a new idea. Medications can be as little as 1/10th the cost of the same medication in the United States.

In the United States, drugs have different prices depending on where or how they are purchased. I remember my mother buying a small tube of Clobetasol Propionate, which is used for itchy skin. Without insurance, the pharmacy wanted over $300 for the generic. 

Clobetasol propionate was patented in 1968 and first used in medicine in 1978. In 2013, a tube of generic clobetasol propionate cost $10. In 2014, the prices of generic drugs soared, and the same tube of generic clobetasol propionate cost over $300. 

Ozempic is a new drug that has gained the spotlight due to its $970 to $1,300 monthly costs. A recent study in Jama Open Network found the cost to manufacture a monthly supply of Ozempic could be as low as $0.89 to $4.73.

The Inflation Reduction Act initiates the discussion on cost containment while enhancing prescription coverage for the member. For the first time, Medicare has authority to negotiate drug prices with pharmaceutical companies. If pharmaceutical companies increase their cost over inflation, the pharmaceutical company needs to cover the excess increase with rebates. It caps insulin prices and caps total prescription drug payouts by the member to $2,000 a year, a little over a 30% cut on the current cap.   

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