Lisa McRipley has been living with multiple sclerosis for more than a decade. And although the condition eventually forced her to leave the workforce and move from California to be with family in Michigan, she has remained active ― volunteering with MS advocacy groups, participating in church activities ― with the help of medication that slows the disease’s progression and reduces the severity of symptoms.
But the treatment is expensive, and McRipley’s drug coverage, through Medicare, leaves her on the hook for hundreds of dollars, and sometimes more than a thousand dollars, in out-of-pocket costs when she fills the prescriptions at the pharmacy. Paying is a real struggle on a fixed income, McRipley told HuffPost in an interview, but going without the medication isn’t an option, as she discovered the hard way this summer, when she stopped taking some of her pills briefly and within a week started losing mobility, dexterity and her sense of balance.
“I lost my ability to even hold a fork or a spoon to eat ― it was like night and day,” McRipley said.
McRipley has resumed taking the medication, but, as is often the case with relapsing and remitting forms of MS, she fears she will never get back to where she was. And although McRipley can’t be sure the medication pause is the reason her condition got worse, she is sure about how the cost of her drugs affects her life even when she’s able to take them.
“It’s really upsetting because I have to ask for assistance, for things like groceries,” McRipley said. “I’m asking my parents … and I should be in a position where I’m helping them at this time, not the other way around.”
McRipley’s story is by no means unusual or limited to people with MS. High cost also appears to discourage Medicare beneficiaries with cancer, hepatitis C and certain immune disorders from taking their medications, according to a major paper that appeared in the journal Health Affairs earlier this year. And it wasn’t the first study to document such effects.
Democrats have been promising to help people like McRipley, and they may be on the verge of fulfilling that promise with the Inflation Reduction Act, which party leaders hope to pass in the coming days and send to President Joe Biden for his signature. The legislation includes several provisions designed to reduce what people pay at the pharmacy counter. The best-known and most controversial of these would give the federal government power to negotiate the prices of drugs that Medicare covers, which is something that the governments of other economically advanced countries already do and a big reason why pharmaceutical prices in those nations are so much lower than they are here.
But only a limited number of drugs would be subject to negotiation under a process that wouldn’t lead to lower prices for those drugs until 2026. Even then, drug prices in the U.S. would likely remain significantly higher than they are in peer countries, which means that Medicare beneficiaries like McRipley would still need more help, ideally sooner rather than later.
And they may get it. The other prescription drug reforms of the Inflation Reduction Act have gotten a lot less attention, but several could have a big impact, including one that would put a hard limit on out-of-pocket drug expenses. It would phase in over two years, starting in 2024, so that by 2025, beneficiaries like McRipley would pay no more than $2,000 a year for drugs that now cost them many times more than that.
McRipley said the provision could be a “lifesaver,” which, if the studies are correct, is literally true. But that all depends on the bill actually passing. As of this writing, that is still no sure thing.
Medicare Beneficiaries Have Drug Coverage ― With Big Gaps
The story of why Medicare beneficiaries owe so much for prescriptions goes back to 2003, when President George W. Bush signed the law that created Medicare’s drug benefit, which is known as Part D. The program addressed a huge need. Prior to that, Medicare beneficiaries frequently couldn’t find drug coverage.
But the program’s chief architects were Republicans and conservative Democrats who refused to give the federal government leverage over drug prices and weren’t willing to spend what it would take to finance the kind of comprehensive benefit many seniors needed. As a result, Part D has big gaps in its coverage, exposing seniors to significant deductibles, copayments and coinsurance.
The Affordable Care Act, which President Barack Obama signed in 2010, addressed the problem partly by gradually eliminating one of the big gaps in coverage ― or closing the “doughnut hole,” as it had come to be known. The 2018 Bipartisan Budget Act, which President Donald Trump signed, accelerated the process.
“These [drugs] aren't optional for people. These are what you need to extend your life or to prevent you from getting sicker.”
But even with those reforms fully in place, Medicare beneficiaries remain responsible for a fraction of their drug costs with no limit on the total.
The portion is small, just 5% once drug spending reaches a certain threshold. But some drugs have such high list prices ― tens, even hundreds of thousands of dollars a year ― that the 5% becomes punishing, enough to deter patients from taking the drugs altogether.
“I think there is this perception that just because someone is on Medicare, they’re covered and most of their prescription drug costs and other kinds of costs are covered,” said Amy Niles, executive vice president of the PAN Foundation, which provides financial assistance to people who can’t afford their medical bills. “But when it comes to prescription medications, that’s not the case. So for people on Medicare … there is no limit to what you might pay out of pocket for these medications.”
Sometimes People Skip Medications They Need
The study that appeared in Health Affairs earlier this year shows just how severe the effects can be. Among Medicare beneficiaries who weren’t eligible for extra government assistance, nearly 1 in 3 were failing to fill the new prescriptions, researchers found.
“We know that these are critically important drugs, many of them the first-line treatment recommendation,” Vanderbilt associate professor and lead author Stacie Dusetzina told HuffPost. “So these aren’t optional for people. These are what you need to extend your life or to prevent you from getting sicker. The fact that it’s nearly 1 in 3, that is just mind-blowing.”
Not all drugs that Medicare beneficiaries need translate to such high individual costs. It’s mainly the drugs that individual beneficiaries purchase directly at pharmacies using their Part D coverage. Infusions and other drugs they get at doctor’s offices and clinics usually fall under Medicare Part B, which pays for outpatient services, and the cost-sharing in Part B is typically much lower because most beneficiaries have supplemental coverage or out-of-pocket limits on medical spending.
To illustrate the illogic of that distinction, Dusetzina has cited the example of breast cancer.
The treatment for one common type, known as HER2-negative cancer, is a drug that people take orally. For Medicare beneficiaries, annual out-of-pocket costs can exceed $10,000. The treatment for a different variant, HER2-positive breast cancer, is an infusion, which for most Medicare beneficiaries will cost a fraction of that amount.
“It means you might be feeling lucky that you have a cancer that’s treated with infusions instead of pills,” Dusetzina said. “It makes no sense at all.”
Charities Provide Critical Help, But It’s Not Enough
Joan Durnell Powell doesn’t need a study to tell her about the high cost of drugs and the choices it forces upon patients. Powell is a retiree in California who in 2014 got a diagnosis of myelodysplastic syndromes, a class of blood disorders. The medications she’s taken have kept her alive, she said in an interview, but with out-of-pocket costs that run into four and frequently five figures.
Like many Medicare beneficiaries, Powell has gotten help from several private charities, including the PAN Foundation, that assist people who can’t afford their drugs. “If it wasn’t for the support of these foundations, I literally wouldn’t be living.” But sometimes the grants expire or the paperwork doesn’t get through, Powell said, and even when the money is there, it covers only some of the bills.
Today, she said, she still has to come up with about $5,000 to $6,000 a year ― on a fixed annual income of less than $30,000. “Anytime I tell people about this, I say I don’t have to worry about my disease. I have to worry about my co-pay.”
The limits on what the charities can provide are why those organizations have lined up with Patients for Affordable Drugs, FamiliesUSA and other health care advocacy groups to support the proposed out-of-pocket cap. They are equally enthusiastic about some related provisions in the Democratic legislation, including a proposed expansion of support for Medicare beneficiaries with low incomes.
The Reform Package Has Real Tradeoffs
Like all policy proposals, the Democratic legislation comes with some trade-offs, which, in the case of the out-of-pocket cap and the low-income assistance, is primarily in the form of new government spending.
In other words, the reason Medicare beneficiaries like McRipley and Powell would soon pay less for their drugs under the Democratic proposal is that the federal government would be assuming more of the financial burden directly.
That helps explain why those two provisions are part of the same bill that calls for government negotiation of drug prices. The negotiation and some related provisions of the legislation would reduce Medicare spending because as the prices of individual drugs came down, Medicare wouldn’t have to lay out as much money for them.
“I don’t have to worry about my disease. I have to worry about my co-pay.”
The drug industry and its allies, including Republicans and some Democrats, have warned that forcing down drug prices would reduce drug company profits, making it harder for them to attract the investment capital they need to finance the research and development of new drugs. Potentially that could mean fewer breakthrough drugs, as in the kind that now treat McRipley’s MS and Powell’s blood disorder.
But analysts at the Congressional Budget Office have said they think the Democratic bill would likely have only a small effect on innovation. And while plenty of researchers think the effects could be larger, Dusetzina is among a large group that thinks the CBO got it right.
“I think the bill does a nice job of finding a balance ― putting in guardrails around what drugs are eligible for negotiation and also targeting only a small number of drugs to start,” Dusetzina said. “So the pharma industry’s claims related to the loss of cures, I think, are dramatically overstated.”
Of course, the proposal won’t have any effect on innovation ― or on drug prices ― if the Inflation Reduction Act doesn’t get through Congress. And though all 50 senators in the Democratic caucus have now said they support the bill, clearing the way for passage, the drug industry is making one last, desperate push to break up the coalition.
A lot is riding on the outcome. For some Medicare beneficiaries, it might even be a matter of life or death.