Big Pharma Fights Proposal to Keep It From Looting Medicare

Photo by ProgressOhio | CC BY 2.0

The Trump administration has proposed that insurance plans providing drug coverage to Medicare beneficiaries will no longer be forced to cover six hitherto “protected” drug classes. The classes––which include drugs for psychiatric conditions, cancer and immune diseases––are among the priciest of all drugs and account for as much as 33 percent of total outpatient drug spending under Part D of Medicare.

Under the proposal, Medicare plans could “exclude from their formularies protected class drugs with price increases that are greater than inflation, as well as certain new drug formulations that are not a significant innovation over the original product,” says Seema Verma, the administrator of the Centers for Medicare and Medicaid Services.

In 2014, the Obama administration sought the same “price relief” for Medicare but was defeated by drug industry lobbyists. At the time, 100 pills of the “protected” psychiatric drug Abilify cost $1,644, 100 pills of the “protected” psych drug Geodon cost $958, 100 pills of the “protected” psychiatric drug Invega cost $1,789 and 100 pills of the “protected” psych drug Seroquel cost $2,000. Since then, even pricier psychiatric drugs have emerged as well as 6-digit cancer drugs.

The Obama proposal was roundly defeated by drug industry funded groups like the National Alliance on Mental Illness (NAMI). NAMI received $23 million in just two years from drug makers and is 

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