'It changes the landscape.' Democrats tout Inflation Reduction Act, prescription drug changes
LAS CRUCES – Cheaper drugs are on the way for hundreds of thousands of New Mexicans. It just might take a few years to notice.
During a news conference Wednesday, a cadre of state and federal officials touted the Inflation Reduction Act, which President Joe Biden signed into law on Aug. 16. U.S. Sens. Ben Ray Lujan (D) and Martin Heinrich (D) stood alongside New Mexico Gov. Michelle Lujan Grisham and U.S. Secretary of Health and Human Services Xavier Becerra during the conference.
"Healthcare is not affordable and, therefore, it's not accessible," Lujan Grisham said. "That's been the story in America."
The news conference comes after federal lawmakers passed the Inflation Reduction Act last week. The Act, which had no Republican support in either the U.S. House of Representatives or the Senate, contained a litany of provisions touching on tax changes, climate change and prescription drug costs.
More:How the Inflation Act impacts you
The Act allows the Department of Health and Human Services (HHS) to negotiate the cost of the 100 most expensive drugs. Before that, a law made the practice illegal. An analysis conducted by the non-partisan Congressional Budget Office estimated that the move would save Medicare about $102 Billion over the next 10 years.
The Kaiser Family Foundation, a non-partisan health research group, estimated that about 432,470 New Mexicans are recipients of Medicare.
But taxpayers and drug buyers won't feel the savings immediately. First, HHS must identify 10 of the 100 drugs to negotiate over. In an article outlining some of the changes, the America Association of Retired Persons (AARP), a supporter of the Act, speculated that at least five common medicines would be first on the negotiating table, including:
- Eliquis, used to treat atrial fibrillation,
- Januvia, used to treat diabetes,
- Xtandi, a cancer medicine,
- Myrbetriq, which treats overactive bladder,
- Orencia, used for rheumatoid arthritis.
After the drugs are chosen, the Act outlines cycles of negotiations starting in 2026. Drug makers who walk away from talks could face a tax that may take 95 percent of their sales, according to the Act.
The IRA also extends subsidies in the Affordable Care Act for an additional three years. The subsidies provide financial help to eligible healthcare buyers and expand access for more middle-income people who were previously priced out.
The IRA also puts a $2,000 cap on out-of-pocket costs of drugs for Medicare Part D and requires drug companies to pay rebates if drug prices increase faster than inflation.
"It changes the landscape," Lujan Grisham said.
According to Becerra, different pieces of the Act concerning prescription drug costs take effect at other times.
"It's gonna take some time," Becerra said.
Becerra said that the first component would be the drug companies' rebates when drug prices increase faster than inflation. The repayments are followed by the $2,000 cap on out-of-pocket costs. By 2026, Becerra said Medicare would begin the first round of drug negations.
While the four acknowledged that most would only gradually feel the bill's impact, they also emphasized its immediate impact.
"The market signal starts now," Heinrich said, suggesting that pharmaceutical companies would have to adjust to the new rules of business created by the Act.
Justin Garcia covers crime, courts and public safety. He can be reached via email at JEGarcia@lcsun-news.com.