Drug prices are just too damn high. That may be the one thing on which Donald Trump and Hillary Clinton actually agree, and indeed, most people running for president seem to generally have some idea of the problem and at least an inkling of a plan to fix it. But as the true severity of the problem becomes apparent, are those plans really enough?
Medicare’s drug problem has ballooned into a truly national concern. Medicare’s Part D benefit, which provides prescription drugs for seniors, saw an alarming 13 percent increase in spending in 2014 as new specialty drugs hit the market. Reports predict a 6.5 percent annual growth in drug spending from here on, a rate that could rise depending on the growth of precision and specialty drugs.
Some of those increases are passed off to seniors directly, and as I have noted before, make things more and more difficult for those who live the longest or have the most costly health issues. Through Part D prescription plans, seniors are given one of two options for drug cost-sharing, depending on the drug. One is copayment, in which they pay a flat out-of-pocket rate for each filled prescription. The other is coinsurance, in which seniors pay a percentage of the cost of their drugs. Obviously, for more expensive drugs, coinsurance could be much more expensive than a $20 copayment. New data shows that Part D plans require coinsurance for most covered drugs, a number that is rising. That fact, combined with the rising costs of drugs in general, could be a long-term recipe for financial disaster.
Americans have a good sense of that looming disaster, consistently ranking drug prices as the most important health-care issue in this election cycle. The solution that both Donald Trump and Hillary Clinton stick to, allowing the government to negotiate directly with drug manufacturers, is supported by 70 percent of all voters, with 64 percent viewing it as a top health-policy concern.
The legislation for Medicare Part D expressly denies government authority to negotiate with pharmaceutical companies or allow them to make direct bids. Instead, bids are made through the insurance plans that administer the benefit, a process that many view untenable now that specialty drugs have caused so much havoc in the market. Clinton, Trump, and Bernie Sanders would overturn that restriction, a move that they believe will stem the tide. Trump even boasts that his program would save $300 billion a year—quite a feat for a program that only spends around $80 billion on drugs!
But candidates have given very few specifics on exactly how government negotiation would work. Would it only be for high-cost drugs? Could it freeze certain pharmaceutical companies out if they refuse to play by the rules? And would those Big Pharma companies, which spend hundreds of millions lobbying, even allow such legislation to pass? There are also new plans underway to cut drug costs—even as candidates debate about negotiation—such as proposals to test tying some drug prices to their effectiveness. Could those be folded in as part of a unified strategy to reduce Medicare drug spending?
As Trump and Clinton hurdle toward the general election as the likely nominees, some sort of roadmap on either side could truly differentiate them on a policy issue that most Americans care deeply about. For Trump, a real plan could provide a challenge to Clinton’s status as the serious health-policy candidate. For Clinton, a real plan could undercut Trump’s considerable support among white seniors. But for both, such a plan would provide real leadership on an issue many Americans are clearly worried about. Isn’t that the point of an election?