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AAFP voices support for enabling Medicare to negotiate drug prices

The American Academy of Family Physicians has announced it will support legislation permitting Medicare to negotiate drug prices, pointing to the ever-rising cost of prescription medication for patients, particularly the elderly and disabled.

In a vote by the AAFP Congress of Delegates, the academy approved a resolution in favor of such legislation following discussions that focused both on out-of-pocket expenses paid by Medicare beneficiaries, and the potential savings for the health care system should Medicare Part D be allowed to negotiate prices.

“Family physicians see the impact that prescription costs have on our elderly and disabled patients,” John Meigs Jr., MD, president-elect of the AAFP, said in a press release. “We’ve seen our patients skip taking drugs or ration their medications in order to delay the cost of renewing their prescriptions. As a result, they suffer complications of their chronic conditions, a lower quality of life and greater medical expenses in the long run.”

According to the AAFP, data have shown that elderly patients spend as much as 37% of their Social Security income on medical care. In addition, Medicare Part D could save $15.2 billion to $16 billion annually if it were permitted to negotiate the same prices paid by Medicaid or the Veterans Benefits Administration (VBA) on brand-name drugs.

When it established Medicare Part D in 2003, Congress prohibited Medicare from negotiating prices with drug companies on behalf of beneficiaries, as Medicaid and the VBA do. As a result, Medicare Part D pays an average of 73% more than Medicaid and 80% more than VBA for brand-name drugs, according to the AAFP.

In 2016, Medicare Part D spent $88 billion, representing nearly 16% of net Medicare outlays, the organization added. In a press release, Meigs said projections show that Medicare Part D spending will continue to grow.

“As one of the greatest purchasers of health care, Medicare has a tremendous market presence,” Meigs said. “Their negotiating power could save a significant amount of funds for the system as a whole as well as for our patients.”

Additional reading:

http://www.aafp.org/media-center/releases-statements/all/2016/medicare-drug-price-negotiations.html