Coalition Calls for Bold Pricing Reforms to Save $450 Billion on Drug Costs

In a letter Friday to U.S. President Joe Biden and congressional leaders, four dozen advocacy groups called for including bold drug pricing reforms in the American Families Plan and using the estimated $450 billion in savings over a decade to invest in popular expansions to Medicare.

"Allowing Medicare to negotiate prescription drug prices and then reinvesting those savings back into the program to expand services further strengthens our path towards universal coverage for all."
--Mary Small, Indivisible

Specifically, the letter (pdf) proposes adding dental, vision, and hearing benefits to Medicare, lowering the eligibility age for the federal health insurance program to 50--which would expand coverage to about 63 million people--and creating an out-of-pocket cap for medical expenses.

"The time has come to deliver for America's seniors, people with disabilities, and people approaching retirement," write the business, consumer safety, faith, labor, public health, and racial justice groups.

The letter--addressed to the president, Senate Majority Leader Chuck Schumer (D-N.Y.), and House Speaker Nancy Pelosi (D-Calif.)--comes before Biden is expected to unveil his American Families Plan ahead of a speech to Congress next Thursday.

As the letter explains:

The United States spends far more than any other country for pharmaceuticals, and the largest purchaser in the world is the Medicare Part D program. High U.S. drug spending is driven by excessive prices charged by prescription drug corporations, which lead to treatment rationing and preventable negative health outcomes, including death. Enacting a robust system of direct government drug price negotiation and price spike protections that provides relief to patients regardless of medical condition, insurance provider, or status will save lives and prevent suffering and financial hardship for families across the nation.

"Advancing the strongest reform possible is not only the right thing to do in its own right, but stronger reform also has potential to provide greater savings for reinvestment," the letter continues. "Conversely, any weakening of drug pricing reform would reduce savings. Bold drug pricing reform will support building a healthier America, as well as produce hundreds of billions of dollars in savings to reinvest in bolstering coverage."

A majority of people with Medicare are enrolled in Medicare Part D plan, an optional prescription drug benefit provided through private insurers. In February, the Congressional Budget Office put out a report commissioned by Sen. Bernie Sanders (I-Vt.) confirming that Medicare Part D pays far more for medications than any other U.S. government health program.

Sanders said at the time that "negotiating directly with pharmaceutical companies will substantially reduce the price of prescription drugs, and it is a national embarrassment that the secretary of Health and Human Services is prohibited from doing that on behalf of the more than 40 million Americans who get their prescription drug coverage from Medicare Part D."

Representatives from groups behind the new letter echoed that message on Friday.

"Allowing Medicare to negotiate drug prices down saves money for the federal government," said Alex Lawson, executive director of Social Security Works. "We must pump those savings back into Medicare to expand eligibility and add benefits that equalize Medicare with private insurance."

"Far too many Americans have lost their insurance or put off needed care due to the Covid-19 crisis."
--Eagan Kemp, Public Citizen

The letter, and other advocates, also emphasized how the ongoing coronavirus pandemic--which has killed more than 570,000 people nationwide--has boosted the need for increasing access to Medicare.

"With the consequences of the Covid-19 pandemic still being felt in our communities, now is a crucial moment to expand public healthcare coverage and deliver savings on prescription drug prices to the American people," said Mary Small, legislative director for Indivisible. "Lowering the Medicare eligibility age to 50 will be an essential step towards reducing the racial health inequities by increasing coverage to communities of color and low-income folks."

Small added that "allowing Medicare to negotiate prescription drug prices and then reinvesting those savings back into the program to expand services further strengthens our path towards universal coverage for all."

Expanding access to and improving Medicare is also popular across political party lines, according to polling results (pdf) released with the letter Friday. Data for Progress found that 86% of likely U.S. voters--including 82% of Republicans--support adding dental, hearing, and vision benefits to the program.

The survey, conducted in mid-April, also found that 59% of all voters--including three-quarters of Democrats, a majority of Independents, and nearly half of Republicans--support dropping the Medicare eligibility age to 55.

"Lowering the Medicare eligibility age to 50, capping out-of-pocket costs, and expanding benefits to include dental, hearing, and vision would improve access to care for millions of America," said Public Citizen healthcare policy advocate Eagan Kemp.

"Far too many Americans have lost their insurance or put off needed care due to the Covid-19 crisis," Kemp added. "The Biden administration and Congress have a chance to deliver important progress at a crucial time."