Editor's Note: This column was co-authored by James L. Martin.
Out-of-pocket prescription drug costs are rising for patients over 65, and that is forcing too many Medicare beneficiaries to leave behind their medications at the pharmacy. Unfortunately, some lawmakers who support socialized medicine are threatening to make this problem even worse by calling for ObamaCare-style meddling that drives up healthcare costs in the first place. Instead of doubling down on this failed approach, these policymakers should look for ways to encourage free-market solutions that will ensure all seniors can afford the medicine they need.
Big government intervention in healthcare is to blame for increased costs throughout the system. National health spending grew on average 2.7 percent annually from 2010-2016, when ObamaCare was in full effect. A pillar of ObamaCare was cutting Medicare costs through so-called Accountable Care Organizations, but just the opposite happened: ACOs increased Medicare spending by $216 million in 2015. Now Democrats want patients to believe that it will somehow be different if government gets into the business of controlling drug costs. The truth is this would crush competition, slow innovation and raise prices for Medicare patients.
The real way to lower prescription drug costs for seniors is to promote free-market solutions that enable pharmaceutical companies to improve patient access and affordability. The most recent evidence of the market working is the decision by a leading drug manufacturer to cut the price of a cholesterol-lowering medication by 60 percent. Cardiovascular disease affects 7 million Medicare beneficiaries, putting them at increased risk for heart attack or stroke. Yet Medicare patients were leaving this medication behind at the pharmacy counter 70 percent of the time, likely because they could not afford the out-of-pocket cost.
The unique market dynamics at play with this specific PCSK9 inhibitor is a prime example of why government one-size-fits-all solutions could never work in making medicine more affordable for Medicare patients. Medicare patients are not allowed to benefit from discount coupons that drug manufacturers offer to increase access, and many do not have private add-on plans to help them pay for their prescriptions. For Medicare beneficiaries prescribed the above cholesterol-lowering drug, this meant that they had to pay up to $370 out-of-pocket every time they filled their prescription.
The drug’s manufacturer concluded that the only way to make the drug more accessible to Medicare beneficiaries would be to directly drop the list price. Patients will now pay hundreds less.
This targeted solution demonstrates how companies can successfully respond to the needs of patients when the government gets out of the way. But if proponents of socialized medicine have their way and price controls are imposed across the board, natural market competition among pharmaceutical companies will be disrupted. Innovation will stall and breakthrough treatments will be slow to reach patients. This was exactly the lesson of the ObamaCare failure: government meddling in healthcare has unintended consequences that ultimately punish patients for getting sick.
Free-market forces are benefitting Medicare patients when it comes to policy premiums too. For example, the price of privately administered Medicare Advantage plans is expected to drop six percent next year. This will reduce coverage costs for the 22 million seniors who have Medicare Advantage plans.
Policymakers should be thinking of more ways to let the market work for Medicare patients, not ways to impose more red tape and bad policies that are guaranteed to take us backwards. Seniors simply cannot afford government intervention on prescription drug costs.
James L. Martin and Saul Anuzis are the Chairman and President of The 60 Plus Foundation, a non-partisan educational organization formed to enhance the quality of life, dignity, and security of American senior citizens.
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