Guess who gets to pay for Joe Biden's self-touted lower prescription drug costs?
While Joe Biden's out lounging somewhere on St. Croix, whoever it is who's tweeting for him has kept busy, spinning a narrative about all of Joe's supposed achievements from his grossly misnamed Inflation Reduction Act and congressional omnibus act, complete with sleek, possibly Photoshopped glamour shots of doddering old Joe.
Here are a few of the whoppers:
The Inflation Reduction Act puts an annual $2,000 cap on prescription drug costs for seniors with Medicare Part D.— President Biden (@POTUS) December 28, 2022
It will save folks on one prostate cancer drug about $6,000 a year. It'll save the thousands of women taking breast cancer treatments $7,000 a year.
In six days, a month’s supply of insulin will be capped at $35 for our seniors.— President Biden (@POTUS) December 26, 2022
Just 12 hours until many of the cost-saving provisions in the Inflation Reduction Act kick in for millions.— President Biden (@POTUS) December 31, 2022
Biden keeps touting prescription drug costs going down and access to health insurance expanding based on his efforts, but the exact opposite is the case for millions of Americans.
Get a load of this from two writers at Reuters:
Drugmakers including Pfizer Inc, GlaxoSmithKline PLC, Bristol Myers Squibb, AstraZeneca PLC and Sanofi SA plan to raise prices in the United States on more than 350 unique drugs in early January, according to data analyzed by healthcare research firm 3 Axis Advisors.
The increases are expected to come as the pharmaceutical industry prepares for the Biden Administration's Inflation Reduction Act (IRA), which allows the government's Medicare health program to negotiate prices directly for some drugs starting in 2026. The industry is also contending with inflation and supply chain constraints that have led to higher manufacturing costs.
The increases are on list prices, which do not include rebates to pharmacy benefit managers and other discounts.
In 2022, drugmakers raised prices on more than 1,400 drugs according to data published by 46brooklyn, a drug pricing non-profit that is related to 3 Axis. That is the most increases since 2015.
The median drug price increase was 4.9% last year, while the average increase was 6.4%, according to 46brooklyn. Both figures are lower than inflation rates in the United States.
So while prices for a few select special interests on a few medications are going down, everyone else gets to "pay for" them through price hikes on their own prescriptions. Sure, they may be lower than the overall rate of inflation, but price hikes are higher prices, as if everyone hit by inflation in other things has plenty of cash to spare.
And yes, those price hikes are linked to Biden's omnibus and "Inflation Reduction Act."
Here is the money quote, emphasis mine:
Antonio Ciaccia, president of 3 Axis, said that drugmakers have focused on launching their drugs at higher prices because of the attention paid to annual price increases. The IRA [Inflation Reduction Act] should further this dynamic, he said.
"Drug makers have to take a harder look at calibrating those launch prices out of the gate ... so they don't box themselves into the point where in the future, they can't price increase their way back into profitability," he said.
More drug prices are likely to be announced over the course of January - historically the biggest month for drugmakers to raise prices.
Well, lucky us. If you're old and already on Medicare, you might see lower costs on some items. The costs of other drugs, and odds are high that you may be taking a few, will be up, though, so all those savings Joe is touting would save you nothing.
Worse still, if you aren't old, you pay full fare, plus the premium tacked on to pay for the more politically favored patients. Got some extra money to pay for those life-saving drugs? Cough up, Joe's got discounts to give to others.
The crux of the problem comes from the $740 billion Inflation Reduction Act (see the second paragraph in the first Reuters passage cited above), which has a shakedown clause for Big Pharma described a few days ago by Mark Hemingway in an article for Real Clear Investigations here:
As of Oct. 1, the new law requires drugmakers to pay rebates to Medicare if the costs of certain drugs rise faster than annual inflation. If the government determines that the price of a drug increased 6% and the inflation rate that year was 4% – regardless of how or why the price rose – the manufacturer will be required to pay the government back the 2% difference in the price. The law does not provide an appeals process.
And starting in 2026, the IRA permits the government to “negotiate” a “maximum fair price” for certain prescription drugs purchased by the Medicare program. Under the new law, “negotiation” means the HHS determines the price it wants to pay for a specified medicine. Drug manufacturers can counteroffer, but if HHS doesn’t budge, the pharmaceutical company has no choice but to accept that price. Otherwise, the IRS will be empowered to slap the company with a “noncompliance” excise tax of up to 1,900% of the medicine’s daily U.S. revenue until the manufacturer sells the drug at the price HHS has set or withdraws from the market.
So the government will muscle Big Pharma into taking its dictated "fair price" and drug manufacturers will have to eat the costly losses, or pay the hefty fines, unless they pull out of the market for those drugs altogether.
Now, some will "Go Galt" and pull out of these markets, setting the stage for shortages, which is what always comes of price-fixing. All you have to do is ask the Cubans or Venezuelans, or even Canadians about that one.
But Big Pharma is not stupid. The drug manufacturers being hit by Joe's dictated price hikes have come up with a way to negotiate this no-win proposition for them, given that they do need to make a profit in order to keep bringing forth newer and more effective drugs to market, as well as attract top talent to do the research. Big Pharma figured out that its way of getting around this profit-free (but not tax-free) future is to pass the costs of the drugs onto other consumers who take other drugs, let those guys pay for the cheaper drugs for the special interests.
That's where at least some of the price hikes are coming from -- from costs passed on to other customers who take other drugs.
So the sick people who are generally out of commission as they seek to recover from their less politically attractive illnesses and who are least able to pay, are the ones who get stuck with the bill, paying through higher costs on their drugs as a few favored interests pay less.
All of this, by the way, comes on top of health insurance price hikes set to go into effect this year, averaging around 3.9%, a doubling of the cost rise, and going as high as 14%, as I noted here on my own health insurance bill.
How's that for lower health care and prescription drug costs? And, this, on top of all the other inflation that Joe Biden has brought us.
It just goes to show that Joe Biden's meddling in the health care industry merely shifts costs from one group to another, like a game of unlucky musical chairs, helping no one in the end as consumers get inundated by more rising costs.
Meanwhile, the vast spending in the omnibus act and the "Inflation Reduction Act" will add more inflation fat to the fire just by the virtue of all the money-printing those billions and trillions entail, particularly with wages falling.
It shows what a liar Biden is. His toutings are disgusting prevarications and spin, nothing but gaslighting in the sleight of hand that goes with price-fixing and cost-shifting.
If incoming congressional Republicans don't call this scam out, denounce the Biden lies, and end the inflationary clauses of these miserable bills immediately, they'll be worthless to voters by 2024.
It's time for the incoming House to seize this issue and rectify the coming disaster of unintended consequences from this charlatan now.
Image: Screen shot from live television broadcast, filtered with FotoSketcher.