OSHA Reopens Comment Period On Proposal to Revoke Ducey Administration’s Worker Health & Safety Program

Right now, enforcement of federal worker safety laws is the responsibility of the Arizona Industrial Commission via the Arizona Department of Occupational Safety and Health (ADOSH).

However, the US Department of Labor’s Occupational Safety & Health Administration (OSHA) has recognized a pattern of lax or even nonexistent enforcement of federal worker safety requirements in Arizona during the Ducey Administration & is in the process of revoking Arizona’s state plan- meaning the fed’s would take back the responsibility for worker safety compliance in Arizona.

Per the U.S. Labor Department: “In April, the Department of Labor issued the proposal in response to the Arizona State Plan’s nearly decade-long pattern of failures to adopt and enforce standards and enforcement policies at least as effective as those used by the department’s Occupational Safety and Health Administration.

See: Slipshod Enforcement of Worker Safety Regulations Compels OSHA to Begin Revocation of AZ Industrial Commission Delegation Agreement

In a last-ditch effort to keep the enforcement of labor laws in Arizona, ADOSH conceded that they have been doing a bad job and committed to several measures to address concerns (e.g., increasing maximum penalty amounts and adoption of standards and enforcement directives that were past due). The Federal Register notice will include a list of Arizona’s completed measures.

Up until this point, Governor Ducey appeared to be willing to cede ADOSH authority to OSHA given his only public statement on this matter is that this action is a “political stunt and power grab”.

Rather than proceeding with revocation of the Department of Labor’s delegation agreement with Arizona, OSHA reopened the comment period for an additional 60 days on their proposal to revoke Arizona’s State Plan for Occupational Safety and Health.

The additional 60-day comment period will allow stakeholders the opportunity to comment on ADOSH’s actions and the impact those actions should have on OSHA’s proposed revocation of the State Plan’s final approval. After the Federal Register notice is published, stakeholders will be able to submit comments online using Docket No. OSHA-2021-0012 on the Federal eRulemaking Portal.

Editorial Note: The Ducey Administration has a long history of having been captured by industry when it comes to enforcement of worker safety laws. OSHA doesn’t revoke delegation agreements unless there is a long-standing pattern of non-compliance.

I’m sure OSHA knows full-well that nothing is going to really change during the last 140 days of the Ducey Administration. They might withhold their judgment about whether to revoke the state plan to see if they believe the next governor will actually be committed to worker safety.

____________________

Example of the Comments in the Public Record About the Ducey Administration’s Worker Safety Regulation Track Record
(It’s Not Pretty)

There are a number of important public comments in the record documenting the Ducey Administration’s slipshod implementation of worker safety regulations in Arizona. Below is among the most informative of the comments:

Establishing and adopting occupational safety and health standards is fundamental to OSHA enforcement. Enforcement of such standards is the keystone to protecting employees from exposure to hazards shown by research and experience to be harmful to employees.

As established by Congress in the 1970 OSH Act, states are allowed to form an OSHA-approved state plan provided they develop and enforce standards that are “at least as effective” as those established by OSHA. Adopting OSHA safety and health standards, when they apply, is not optional and must be completed in 6 months.

Additionally, adopting OSHA directives such as operation manual updates, inspection emphasis programs, and enforcement procedures is also important to maintaining an effective state plan.

As indicated by OSHA, the Industrial Commission of Arizona (ICA) failed to adopt in a timely manner, or even at all, several major OSHA standards and compliance directives. 

When the ICA fails, or delays, to adopt new safety standards and directives as required, workers under its jurisdiction are denied protections afforded by Congress. In the case of OSHA’s silica standard, the ICA adopted it some 27 months after OSHA was already enforcing it in states under Federal OSHA.

Simply, ADOSH cannot enforce standards before and until the ICA adopts them. To claim that ADOSH is at least as effective as OSHA when it has not adopted or created equal or better occupational safety and health standards to enforce is preposterous.

Other workplace safety & health responsibilities the State leadership failed to meet:

  • The ICA failed to promulgate OSHA-required occupational safety & health standards and to cooperate with Federal OSHA to maintain the state plan as effective as the OSHA program as required by Arizona Revised State (A.R.S.) 23-405.
  • The ICA frequently deleted citations before issuance after the initial burden of proof was established and, in some cases, severely reduced monetary penalties.
  • The ICA Commission was composed of four members instead of five as required by A.R.S. 23-401 for the better part of six of the last seven years. (Stacking the Commission to ensure diminished enforcement?)
  • Workplace safety & health enforcement inspections conducted by ADOSH fell from 1,218 in 2017 to 540 in 2020. The agency completed 530 inspections in 2019. ADOSH’s inspection goal in 2020 was 1,295.**
  • Serious, willful, and repeat workplace safety violations issued by ADOSH fell from 1,003 in 2017 to 444 in 2020.*
  • The number of safety and health compliance inspectors at ADOSH fell from 24 in 2017 to only 17 in 2020.**

The obvious conclusion: Arizona State leadership has failed to fully protect Arizona workers as required. Revocation of final approval and reinstatement of Federal concurrent authority in Arizona is warranted. Concurrent enforcement should remain in place until such time as State leadership clearly demonstrates the will to correct its deficiencies and maintain performance of at least the most fundamental requirements.

The fact that such action is warranted at all is a travesty. Retaining exclusive local jurisdiction over occupational safety & health enforcement provides several advantages to Arizona in terms of service and responsiveness. The privilege should have been better safeguarded by State leadership.

The State leadership’s performance in the issues discussed demonstrates a low regard for the rights of Arizona workers as guaranteed by Congress. It also reflects disdain for Arizona lawmakers who previously worked to establish the State Plan and maintain the privilege. Regardless, Arizona’s performance in enforcing occupational safety and health is unacceptable and must be immediately corrected if the Act is to mean anything at all.

Link to existing public comments 

Guest Piece: AzPHA Member Dr. Len Kirschner: 57 Years of Medicare & Medicaid

57 years of Medicare & Medicaid

If you like anniversaries, here is one to remember. Saturday, July 30, is the 57th anniversary of LBJ going to the Truman Library to sign the Social Security Amendments of 1965. They were Title 18 and 19. The legislation has been described as two compromises and an afterthought.

Part A was a compromise with American Hospital Association. Part B was a compromise with the American Medical Association. Medicaid was an afterthought, added at the end of the debate.

It was going to be a really small program (were they wrong). At the signing, LBJ spoke about Medicare but not a word about Medicaid. Harry got Medicare card #1 and Bess #2. Their Part B premium was $3 per month. Mine is higher.

Prescription drugs were considered for Medicare, in 1965, but did not make the legislation. Prescription drugs were an option for states and, eventually, all added them to the benefits package for their Medicaid programs.

I have a copy of a letter from Joe Califano (Special Assistant to the President) to John Gardner, Secretary of HEW dated August 21, 1967. It is labeled as ADMINISTRATIVE CONFIDENTIAL and EYES ONLY. I got it from the archives at the LBJ Library. Joe wrote:

“Review the report of the Task Force on Prescription Drugs and make recommendations relating to the inclusion of prescription drugs in Medicare and on ways to reduce the cost of drugs.”

W signed MPDIMA in 2003, adding prescription drugs to Medicare. That did not solve the problem and the Senate is debating the subject this week. After 57 years you would think the Congress would get it right. Not likely.

Salud y Buen Suerte!

Leonard Kirschner MD,MPH

Colonel USAF (Retired)

Annual AzPHA Public Health Awards

Accepting Nominations Now!

Each year AzPHA recognizes public health professionals & health care workers across Arizona are performing extraordinary services to our community at our annual awards event. Many of our awards go back decades.

We’re proud to announce that the 2022 awards program will be held on:

Thursday. October 27, 2022

5:00pm – 8:30pm

Outdoor Courtyard at the Maricopa Medical Society

326 E Coronado Rd #101, Phoenix, AZ 85004

This will be an outdoor, happy hour event. We expect to begin registration in September.

Please take a moment to view our award categories and submit your entries by September 15, 2022

Nominate Here

Award Categories

Policy Maker of the Year
Senator Andy Nichols Honor Award
Cele Cohen Nursing Award
Elsie Eyer Commitment to Underserved People Award
Harold B Woodward Award
Health Education Awards
Pete Wertheim Public Health Leadership Award
Public Health Research Award
Corporate Public Health Service Award

What’s in the Inflation Reduction Act of 2022 Anyway? Historic Policy Changes that Will Reduce Carbon Emissions A Lot.

The Inflation Reduction Act of 2022 (H.R. 5376) passed the U.S. Senate yesterday and is headed to the House of Representatives for a final vote before going to the President’s desk. It’s the biggest clean energy and energy efficiency package ever passed. While it won’t completely meet our obligations under the Paris Agreement to reduce carbon emissions, it’s a great start.

The Act also tweaks federal law by finally allowing Medicare to negotiate the price it pays for a handful of medications under Medicare Part B and D.

It’s fiscally responsible because it makes the clean energy and energy efficiency investments while also reducing the deficit. The initial agreement would have raised an estimated $739 billion in revenue over 10 years and resulting in $306B in deficit reduction over the next 10 years.

Most of the revenue comes from closing tax loopholes very large corporations use to avoid paying already low corporate taxes. It had previously included revenue by closing a loophole very wealthy investors use to avoid taxes, but Senator Sinema nixed that provision to protect them.

 

Climate Provisions

The Act contains $369 billion in climate and energy provisions with the vast majority ($280 billion) as clean energy tax incentives. The new tax incentives are designed to change the behavior of utilities, businesses, and ordinary people by giving them financial incentives to invest in renewable energy sources, speed up the adoption of electric vehicles, and assist the development energy efficiency technologies.

Together, these long-term investments in clean energy (again – mostly in the form of incentives over the next 10 years) will reduce carbon production, lower household energy bills, and help reduce U.S. dependence on fossil fuels, particularly foreign oil.

According to multiple analyses by Rhodium Group and Energy Innovation it will put the U.S. on a path to achieving a 40% reduction in greenhouse gas emissions by 2030. Here are some of the nuts and bolts on the carbon (and methane) reduction pieces:

  • Establishes $121B in clean electricity tax incentives to speed up the installation of renewable energy to the grid & reduce household energy bills.
  • Contains investments to decarbonize the transportation detector, including $22.6B in tax incentives and $3B to electrify the U.S. Postal Service’s fleet.
  • Invests in efficiency across buildings, industry, and transportation (buildings are responsible for 40% of global energy consumption and 33% of greenhouse gas emissions).
  • Allocates $27B for the establishment of a Greenhouse Gas Reduction Fund.
  • Invests nearly $20B in conservation programs at the USDA including $8.45B for the Environmental Quality Incentives Program and $6.75B for the Conservation Stewardship Program.
  • Increases royalty and rental rates, eliminating noncompetitive leasing, and establishing minimum bids on federal parcels.
Prescription Drug Provisions

The Inflation Reduction Act of 2022 tweaks federal law a bit by eventually allowing Medicare to negotiate the price of a handful of drugs (in 2026). While Medicare will eventually be able to negotiate price – they’ll be limited to negotiating price of just 10 drugs in the first year & not until 2026. The next year (2027) they can negotiate the price of 15 more.

TBH- the drug pricing reforms in the Inflation Reduction Act of 2022 are anemic. With a little more backbone, we could have had real price reform. As it is, it’s like bringing home a C- on your report card. Congress still gets credit for the class, but it’s certainly nothing to brag about.

Medicare is held hostage by drug companies and Medicare pays 300% more for prescription drugs than in Europe or Canada, and close to 10x higher than in developing nations. That means every American who gets a paycheck is paying way more than necessary for prescription drugs. We’re ALL being scammed (not just Medicare beneficiaries) because Medicare is financed with a (regressive) payroll tax.

Medicare Part D is financed by Medicare Trust Fund payroll tax revenue (71%), Part D premiums (17%) and state payments for people dually eligible for Medicare and Medicaid (12%).  People that earn a paycheck pay a 1.45% tax on wages up to $200,000. Income above $200K is only taxed at 0.9%.

The House of Representatives had our back – passing meaningful reform that would have saved real dollars back in 2019. Sadly, the Senate allowed the drug lobbyists to take the wheel last week- largely selling out to Big Pharma.

The good part of the deal is that Medicare will finally be able to (eventually) start negotiating drug prices.

The bad news is Medicare can’t start negotiating for 3.5 more years (2026) and even then, they can only negotiate prices on 10 of the thousands of name brand drugs covered under Medicare Part D. Medicare can negotiate the price of 15 more drugs in 2027 & a few more the next year- but make no mistake- this is still a win for Pharma because this just nips at the margins of the heist.

Among the handful of drugs for which Medicare can negotiate price, the upper limit price is supposed to be 75% of the non-federal average manufacturer price, between 9-12 years after the drugs’ approval; 65% for drugs between 12-16 years post-approval; and 40% for drugs more than 16 years past their approval date.

The Act requires rebates from Pharma when they increase their drug costs faster than inflation, but because Medicare won’t be able to negotiate hardly any launch prices, the drug companies will just drive up the launch prices to compensate for the inflation provision.

The Act does a couple things to limit out of pocket costs – eliminating the 5% coinsurance requirement above the Medicare Part D catastrophic threshold and adding a $2,000 cap on Part D out-of-pocket spending in 2025.

Limiting out of pocket costs reduce costs for some Medicare members, Pharma still gets the full price for the drug because the Medicare Trust Fund picks up the difference – making the Fund go insolvent even faster.

Big Picture: This is historic legislation that will drive significant reductions in carbon emissions over the next 10 years- it’s cause for celebration!

How Would the Prescription Drug Provisions in the Senate Reconciliation Proposal Affect Medicare Beneficiaries?

Monkeypox Now a Federal Public Health Emergency. What Will That Mean?

HHS Secretary Becerra declared a public health emergency last Thursday in a move that could, among other things, allow the administration to tap into additional federal funds for the response. The declaration doesn’t appear to be just to unlock funds though…  the Secretary also appears to want to use some of his new emergency authority to fast-track vaccines and therapies – moves that require authority over and above his normal powers as Secretary

FDA Commissioner Robert Califf simultaneously announced the FDA is considering allowing Jynneos, (the monkeypox vaccine) to be given in two doses that are only 20% of the normal dose which would allow 5 times as many people to get vaccinated.

If FDA authorizes the new lower dose, it would be contingent on using the vaccine “intradermally” rather than by injection. Intradermal vaccination involves slipping a smaller-than-normal needle under the top layer of the skin to deposit the vaccine. Because skin is rich with antigen-presenting cells that can activate a strong immune response the theory is that lower doses can still be effective. Intradermal vaccination isn’t standard practice and clinicians will require training in the technique.  Intradermal vaccination may also cause short-term discomfort, itching, redness, and swelling at the injection site.

Related: Why is the Monkeypox Vaccine in Short Supply When There Are 100 million Doses in the Strategic National Stockpile?

A study conducted about a decade ago and published in 2015 in the journal Vaccine showed that a one-fifth dose of this vaccine delivered by intradermal injection can trigger an immune response similar to that of two standard doses injected into muscle.

Declaring a federal public health emergency has a few main purposes: 1) changing policies (regulations) that you can’t change in a non-emergency; 2) offering contracts you usually can’t offer; and 3) accessing emergency funds that are off limits unless it’s an emergency.

Here’s the Act under which a PH emergency can be declared: https://www.phe.gov/Preparedness/legal/Pages/phedeclaration.aspx (BTW: Health & Human Services Secretary Becerra would declare the emergency, not President Biden)

If Becerra declares an emergency, it will give him a fair amount of added authority to change policy, reassign staff and access emergency funds like:

  • Make grants and enter into contracts and provide supplies, equipment, and services, and reassign HHS staff to work on monkeypox.
  • Allow HHS to access emergency money in the Public Health Emergency Fund to rapidly respond to immediate needs resulting from the PHE
  • Allows CDC to access the Infectious Diseases Rapid Response Reserve Fund
  • Allows HHS to waive certain HIPPA regulations (I can’t see them needing to do that)

There are other authorities a declaration gives HHS agencies- but those are the main things. Interestingly, releasing stuff in the Strategic National Stockpile (e.g., monkeypox/smallpox vaccine) doesn’t require an emergency declaration.

Here’s the list of PH emergencies. Lots of declarations for weather events. For infectious diseases there have been declarations for COVID (of course) but also Zika and H1N1 influenza. Public Health Emergency Declarations

Special Note: Monkeypox is not a reportable disease in Arizona (it’s not included in the list of reportable disease under AAC R9-6-202) but the ADHS director has the authority to make it reportable in ARS 36-136(H).   Good public health practice requires solid surveillance – which includes mandatory reporting. Without it, you’re likely to have incomplete surveillance, which in this case, means being placed lower on the priority list for vaccine. After our advocacy over the last few days, look for ADHS to finally make monkeypox reportable this week.

Free Webinar: How Local Health Departments Can Make the Most of New PH Infrastructure Funding

 How Local Health Departments Can Make the Most of New PH Infrastructure Funding

States will be getting significant new funding for improving Public Health infrastructure, but the needs are so much greater than the funding, so it will be important to invest the funds in ways that generate the greatest positive impact. 40% of the funding that states get will be passed through to local health departments.

This webinar shares some high-impact ways to maximize the impact of this money—helping each local health department get more resources.

Participants will learn:

  • Excellent (and economical) ways to build the strategic skills of new and existing staff (as well as community partners);
  • How to build and implement better CHIPs that get results, even when budgets are tight;
  • Why the next generation of monitoring and evaluation can have fewer headaches and more benefits;
  • High-impact strategies to address priority health issues with “everybody wins” partnerships;
  • How to simplify and improve Performance Management and other requirements for PHAB accreditation or reaccreditation.

Join us to learn how local health departments in your state can benefit from creative partnerships, sharing, eLearning, and group coaching in state-of-the-art practices so you get a lot more value from the dollars received by your state health department. This webinar is short—just 30 minutes. There is also one on July 26 that is targeting the state health departments on these same topics.

The applications for health departments in states or large cities or counties are due on August 15, so it’s important to view these webinars to enhance the applications.

REGISTER FOR THIS WEBINAR

Maricopa County Public Health Launches mySidewalk – Shedding Light on the Impact the Pandemic Has Had on People’s Lives

As you may have heard, the Voices of Maricopa County Dashboard has officially launched! Created in collaboration with mySidewalk, this interactive dashboard illustrates the impact of the COVID-19 pandemic on community health by combining population data with the lived experiences of Maricopa County residents. 

In it, you’ll find:

  • The top community health and social needs expressed by county residents;
  • Data collected from the Maricopa County Department of Public Health designed COVID-19 Impact Survey and Focus Groups, including 14,380 survey responses and feedback from 186 focus group participants;
  • Eye-opening quotes from residents describing the effects of the COVID-19 pandemic on their lives;
  • An opportunity for users to send their own stories which may be featured on the dashboard; and 
  • Valuable insight for community organizations and policymakers looking to support the improvement of community health

The dashboard is free, easy to use, and doesn’t require a log-in to access. You’re welcome to read the press release for further details. You can begin exploring at: dashboards.mysidewalk.com/voices

AzPHA Letter to Senators Sinema & Kelly Expressing Support for Inflation Reduction Act of 2022

August 2, 2022

Dear Senators Sinema & Kelly:

The membership of the Arizona Public Health Association urges you to support the Inflation Reduction Act of 2022. We’re very enthusiastic about how the Act finally makes necessary investments in climate and clean energy. The critical investments and incentives in the Act provide the impetus for our nation and Arizona to reduce carbon pollution that’s driving climate change while giving a much necessary boost to Arizona’s clean energy economy.

While we’re encouraged that the Act will finally allow Medicare to begin negotiating prices beginning in 2026, we’re disappointed that the Inflation Reduction Act of 2022 doesn’t include the more aggressive and fiscally responsible provisions of H.R. 3 (Lower Drug Costs Now Act of 2019). Those provisions would have allowed Medicare to negotiate the price of between 25-125 brand-name drugs (w/o generic competitors) in 2023 and apply the negotiated price available Medicare, Medicaid & private payers.

Incorporating H.R. 3 into the Act would have also set an upper limit for the negotiated price equal to 120% of the Average International Market price paid by Australia, Canada, France, Germany, Japan, and the UK. It would have also had a much better compliance system, giving HHS authority to impose financial penalties on drug companies that don’t negotiate in good faith.

We’re also pleased the Act has closes current unreasonable tax loopholes with the 15% minimum tax for very large corporations and closes the carried interest loophole for hedge fund managers.

While we’re disappointed the Act doesn’t transform prescription drug pricing like it could have, we nevertheless believe the package provides critical public health and environmental benefits, and we urge you to support the Inflation Reduction Act of 2022.

Sincerely,

 

Will Humble, MPH

Executive Director,

Arizona Public Health Association

Is A Federal Monkeypox Public Health Emergency in the Offing?

Last week the World Health Organization declared the monkeypox epidemic a Global Health Emergency. California, New York and Illinois have done the same this week. Is the U.S. likely to do the same? When and why would they make such a declaration?

Declaring a public health emergency has a few main purposes: 1) changing policies that you can’t change in a non-emergency; 2) offering contracts you usually can’t offer; and 3) accessing emergency funds that are off limits unless it’s an emergency.

Here’s the Act under which a PH emergency can be declared: https://www.phe.gov/Preparedness/legal/Pages/phedeclaration.aspx (BTW: Health & Human Services Secretary Becerra would declare the emergency, not President Biden)

If Becerra declares an emergency, it will give him a fair amount of added authority to change policy, reassign staff and access emergency funds like:

  • Make grants and enter into contracts and provide supplies, equipment, and services, and reassign HHS staff to work on monkeypox.
  • Allow HHS to access emergency money in the Public Health Emergency Fund to rapidly respond to immediate needs resulting from the PHE
  • Allows CDC to access the Infectious Diseases Rapid Response Reserve Fund
  • Allows HHS to waive certain HIPPA regulations (I can’t see them needing to do that)

There are other authorities a declaration gives HHS agencies- but those are the main things. Interestingly, releasing stuff in the Strategic National Stockpile (e.g., monkeypox/smallpox vaccine) doesn’t require an emergency declaration.

Here’s the list of PH emergencies. Lots of declarations for weather events. For infectious diseases there have been declarations for COVID (of course) but also Zika and H1N1 influenza. Public Health Emergency Declarations

At least for now, it looks like HHS doesn’t intend to declare an emergency. That could change if the new White House monkeypox coordinators (FEMA’s Robert Fenton & Dr. Demetre Daskalakis from Region 9 HHS) determine that an emergency declaration is needed to implement strategies & operations to combat the monkeypox outbreak.

President Biden Announces Team to Lead Monkeypox Response

‘Inflation Reduction Act of 2022’ Gets a C- for Cutting Prescription Drug Prices

If the Inflation Reduction Act of 2022 ends up passing in the U.S. Senate in the next couple of weeks, you’ll no doubt hear politicians and even some stakeholders praise the legislation as historic and transformative when it comes to prescription drug price reform.

I guess it’s fair to say the Act is historic because Medicare would finally be able to negotiate the price of a handful of drugs (in 2026). But the bill IS NOT Transformative. While Medicare will eventually be able to negotiate price – they’ll be limited to negotiating price of just 10 drugs in the first year & not until 2026. The next year (2027) they can negotiate the price of 15 more.

The drug pricing reforms in the Inflation Reduction Act of 2022 are anemic. With a little more backbone, we could have had real price reform. As it is, it’s like bringing home a C- on your report card. Congress still gets credit for the class, but it’s certainly nothing to brag about.

Background

For the last 20 years, all Americans have been getting ripped off by pharmaceutical companies. The heist began when a prescription drug benefit was added for Medicare enrollees (Medicare Part D). Drug company lobbyists made sure Congress wrote the law to prohibit Medicare from negotiating drug prices.

As a result, Medicare is held hostage by drug companies and Medicare pays 300% more for prescription drugs than in Europe or Canada, and close to 10x higher than in developing nations. That means every American who gets a paycheck is paying way more than necessary for prescription drugs. We’re ALL being scammed (not just Medicare beneficiaries) because Medicare is financed with a (regressive) payroll tax.

Medicare Part D is financed by Medicare Trust Fund payroll tax revenue (71%), Part D premiums (17%) and state payments for people dually eligible for Medicare and Medicaid (12%)The Medicare Payroll Tax is regressive. People that earn a paycheck pay a 1.45% tax on wages up to $200,000. Income above $200K is only taxed at 0.9%.

The House of Representatives had our back- passing meaningful reform that would have saved real dollars. Sadly, the Senate allowed the drug lobbyists to take the wheel last week- largely selling out to Big Pharma.

So, What’s in the Inflation Reduction Act of 2022 RE Drug Prices?

The good part of the deal is that Medicare will finally be able to (eventually) start negotiating drug prices.

The bad news is Medicare can’t start negotiating for 3.5 more years (2026) and even then, they can only negotiate prices on 10 of the thousands of name brand drugs covered under Medicare Part D. Medicare would be able to negotiate the price of 15 more drugs in 2027 & a few more the next year- but make no mistake- this is still a win for Pharma because this just nips at the margins of the heist.

Among the handful of drugs for which Medicare can negotiate price, the upper limit price is supposed to be 75% of the non-federal average manufacturer price, between 9-12 years after the drugs’ approval; 65% for drugs between 12-16 years post-approval; and 40% for drugs more than 16 years past their approval date.

By contrast, the drug price reduction passed by the House of Representatives (H.R. 3, the Lower Drug Costs Now Act of 2019) would have allowed Medicare to negotiate the price of between 25-125 brand-name drugs without generic competitors in 2023 with the negotiated price available Medicare, Medicaid & private payers.

President Biden’s plan went even further than H.R. 3 by allowing Medicare to negotiate drug prices across the board. Under his proposal, drug companies could only set prices based on the rate of inflation after it’s determined how much they’ve invested and what a reasonable profit constitutes. Once Medicare negotiates a lower drug price, employer-based plans would get access to the same drug for the same price as Medicare.

Another drawback in the Reconciliation deal is that many of the drugs that would be eligible for Medicare negotiation today, would not be in 2026. Consider the blood thinner Xarelto, or Soliris (for hemoglobinuria) or the multiple myeloma drug Revlimid which targets auto-immune disorders. All four drugs will have generic competition by 2026 but none of them would be subject to Medicare price negotiation if the package passes as-is.

The Act does require rebates from Pharma when they increase their drug costs faster than inflation, but because Medicare won’t be able to drive hardly any launch prices, the drug companies will probably just drive up the launch prices to compensate for the inflation provision.

The Act does a couple things to limit out of pocket costs – eliminating the 5% coinsurance requirement above the Medicare Part D catastrophic threshold and adding a $2,000 cap on Part D out-of-pocket spending in 2025. While these things will help reduce out of pocket costs for some Medicare members, these provisions do nothing to help the Medicare Trust Fund- in fact it makes things even worse because the Medicare Trust Fund will pick up the tab for the out-of-pocket costs that will be eliminated.

The bottom line is that passing the prescription drug pricing provisions in the Inflation Reduction Act of 2022 is better than nothing- but it’s certainly not something to write home about because it’s not a real solution. We could have done so much more.

How Would the Prescription Drug Provisions in the Senate Reconciliation Proposal Affect Medicare Beneficiaries? | KFF