AARP supports Medicare’s ability to negotiate drug prices in a lawsuit against the U.S. Health Department. The advocacy group argues that this provision from the Inflation Reduction Act (IRA) will help seniors afford medications and save billions. Escalating drug costs, outpacing inflation tenfold, are a concern. AARP refutes claims that the program harms businesses or overpowers the government. The program could yield $98.5 billion in savings over a decade. Legal conflicts could escalate the matter to the U.S. Supreme Court, warns AARP.
A federal lawsuit involving the U.S. Department of Health and Human Services and the authorization for Medicare to engage in drug price negotiations with pharmaceutical companies has gained the backing of AARP, the prominent advocacy organization for senior citizens.
AARP has submitted an amicus brief in response to the lawsuit, asserting that a specific provision within the Inflation Reduction Act (IRA) that grants Medicare the ability to directly negotiate drug prices with drug manufacturers is a pivotal step towards enabling Medicare beneficiaries to afford necessary prescription medications and generating potential savings of billions of dollars.
The core objective of the legislation is to counteract the rampant escalation of drug prices, which have surged at a rate ten times higher than the general inflation rate. While the IRA’s drug price negotiation provision is scheduled to be initiated in 2026, there are concerns that a preliminary injunction against this negotiation process could further delay the recipients’ access to this beneficial change.
A recent report from the AARP Public Policy Institute in 2023 reveals that the prices of the top 25 Medicare Part D drugs have soared by an average of 226%, with 24 of these drugs surpassing the inflation rate.
AARP vehemently disputes assertions from business quarters that argue such a pricing program could have detrimental effects on businesses and excessively empower the government. The lawsuit was initiated by the U.S. Chamber of Commerce in a federal court located in Dayton, Ohio, in June. Additionally, Merck & Co. filed a similar lawsuit in Washington, D.C., according to information from the Associated Press.
In its court filing, AARP highlights the dire consequences that escalating drug prices have on many older individuals who struggle to manage these costs. AARP points out that some elderly individuals are compelled to choose between affording their medications or meeting essential life needs like housing, food, and heating. Many resort to skipping doses, dividing doses, or even forgoing filling their prescriptions altogether due to financial constraints, while others deplete their resources to address the exorbitant cost of medications.
Under the new law, the Centers for Medicare & Medicaid are authorized to select ten prescription drugs for negotiation purposes starting September 1, with the negotiation process set to commence on October 1. The nonpartisan Congressional Budget Office estimates that the Medicare drug price negotiation initiative could result in cumulative savings of nearly $98.5 billion for both Medicare and American taxpayers over a decade.
AARP anticipates the possibility of conflicting judicial rulings across different regions, potentially leading to the U.S. Supreme Court’s intervention to resolve the matter of Medicare price negotiation, as indicated in a press release.
