Reducing the Cost of Prescription Drugs Beyond the Inflation Reduction Act
DENVER, Colorado — Millions of Americans are struggling to afford the cost of prescription drugs. Now, for the first time in American history, the federal government will have the power to negotiate prescription drug prices.
This change is due to the recent passage of the Inflation Reduction Act. That’s something Kim Bimestefer, executive director of Colorado’s Department of Health Care Policy and Financing, has long said.
“Until the last few weeks this country hasn’t negotiated the price of drugs with the manufacturers, so the rest of the world has some form of national health care and we’re the outlier,” Bimestefer said. “A third of Americans don’t take their medications as they’re supposed to because they can’t afford it.”
The Inflation Reduction Act will allow the government to negotiate the prices of 10 drugs.
“These drugs that they’re going to negotiate, it’s probably going to be these very expensive drugs, about less than 2% are so expensive that they eat up about 50% of the prescription drug spend,” Bimestefer said.
However, as Adam Fox, deputy director of the Colorado Consumer Health Initiative, explains, this is going to take some time.
“There’s a long way to go, and realistically consumers probably won’t see some of these benefits until 2026,” Fox said.
Colorado is a state that has recently made progress in its drug import program by signing contracts on both sides of the Canada-US border. Other states are watching what is happening. If approved by the FDA, Coloradans will be able to buy an imported drug for about 60% less than the US cost.
“And this solution is very complementary to that. A lot of these drugs weren’t allowed to be imported under federal government guidelines, so it’s a nice compliment to have what’s just been passed and this program of ‘import running side-by-side,” Bimestefer said. said.
“This only increases the importance of some state-level work and our drug importation program because it can potentially have more impact faster and earlier,” Fox said.
Lauren Reveley is the Drug Import Program Manager.
“It’s kind of the first step in an ongoing process of implementation, so these contracts need to set up the new market and the supply chain to bring imported products to Colorado,” Reveley said.
Reveley says the state plans to submit its application to the FDA this fall. Florida was the first state to file. Vermont, Maine, New Mexico and New Hampshire are others that have import programs. Yet, to date, no state program has been approved by the federal government.
“It requires federal approval and unfortunately it takes a long time,” Fox said.
“I think what we’ve built is replicable by other states, and we don’t want to be the only successful state, we want to help lead others,” Bimestefer said.
“And what we often see is that if enough states adopt similar policies, it usually moves to the federal level,” Fox said.
The work to reduce prescription drug prices has a long history.
“Sometimes we have to disrupt the status quo and this process we’re going through is going to do that,” Bimestefer said.
“The sad reality is that there’s a lot of profit and money to be made in healthcare in general and prescription drugs in particular and that’s created a really big incentive to keep costs high,” he said. Fox.
So, they say, the Cut Inflation Act, in combination with federal approval of state drug import programs, will create massive change for Americans.