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How the Inflation Reduction Act may make prescription drugs more affordable, and why it’s needed

Written by Tanya Terry

One in four Americans, which is roughly 18 million people, haven’t been able to afford the medication they need, according Alana Gracey, basic needs organizer at Mothering Justice in Detroit.

Gracey added these are medications that have been being sold for half the price in other countries.

“What we know is Black and Brown communities feel this burden disproportionately, and individuals who tend to be sicker and low income are the ones who are most likely to ration their medication to stretch it out, which can result in negative health consequences,” Gracey stated.

Mothering Justice is an organization that mobilizes women of color to make changes and she was able to work in partnership with Michigan United. She was also part of the Michigan People’s Campaign “Make Meds Affordable Speak Out” held via Zoom earlier this month.

There are eight prescription drugs the campaign was working to try to get the cost reduced for, including Xtandi, a cancer medication with a net price of $130,000 and insulin, used for diabetes, which close to 7.5 million people in the United States use.

According to Robel Worku, a Healthcare for All lead organizer, the cost of insulin went from $21 to $300 for a vial for those without health insurance.

Audrey Gerard, healthcare organizer for Michigan United’s Michigan Community Healthcare Committee described the committee as a coalition of members and leaders who have united thousands of people over the years in regards to healthcare issues. Their bases are in Detroit, Flint, Kalamazoo and Grand Rapids, and they have been organizing in Upper Peninsula this past year.

According to Gerard, their goal is to unite Black, Brown, white and working class people to advance racial equity, and they have won multiple major campaigns over the past two years.

She said through the Make Meds Affordable Campaign, they targeted President Biden.

President Joe Biden signed the Inflation Reduction Act of 2022 into law on Aug. 16.

The Inflation Reduction Act includes some major changes in the US policy on drug pricing intended to reduce drug costs in Medicare. These changes include:

  • A cap on the total amount a patient may be asked to pay out-of-pocket in part D (pharmacy drugs), lower coinsurance for high-cost patients, and less co-pay for insulin and vaccines;
  • Price setting for certain big-selling drugs in Medicare (pharmacy and physician-administered drugs).
  • Requiring drug manufacturers to pay back the government when the drug price increases faster than inflation in Medicare (pharmacy and physician-administered drugs)
  • Less financial responsibility for the government for high-cost patients in part D and greater cost liability from drug companies and insurers.

The law will allow Medicare to annually negotiate prices with pharmaceutical companies on 10 expensive medications, starting in 2026.

In addition, for those buying private health insurance through the public marketplace, discounts were introduced in 2020 under the American Rescue Plan Act. Before then, the assistance was generally available only to households with income from 100% to 400% of the poverty level. The income cap will now continue to be lifted, and no American will a premium that’s more than 8.5% of their income.

 

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