On July 29 we had another Medicare Today town hall. Our guest was Shalla Ross, President of the Ross Group, LLC. We shared our perspectives on likely legislative and regulatory action for the remainder of the year related to Medicare and provided an overview of the electoral atmosphere concerning healthcare and how it might impact Medicare after the election.
Shalla went through a few slides as she discussed what we might expect from Washington both before and after the election. She offered some great insights on what changes were and were not in play. I won’t recap that portion of the town hall. You can click here to see the entire town meeting; it’s a little over 30 minutes long. I will spend some time talking about the questions that were asked and expanding on the answers when appropriate. We had some excellent questions, and is evident that the preservation and efficacy of our healthcare is on everybody’s mind.
The first question asked if the President’s executive order directing the use of the International Pricing Index (where the price of a drug is fixed at the lowest price that a foreign country pays) will have an adverse effect on small pharmaceutical companies. We answered that it would have a chilling effect on all research and development and pointed out that price fixing never has worked. On reflecting more on this question, I would like to note that the world’s reaction to the COVID-19 pandemic is an indication of how important the private, free market is to the development of new drugs. To date 661 unique drug programs have been launched to combat COVID-19. Over half of these programs originated within the United States and 70% of these were started by small biopharmaceutical companies. If, through price fixing, our government imposes itself into the private, free market drug development system, this type of responsive innovation will be lost, and the first to be impacted will be the small companies.
The second question asked about the importation portion of the President’s executive orders. I answered by saying that importation is now and always was a bad idea. Importation has always been an option if the secretary of Health and Human Services would certify to guarantee its safety. No HHS Secretary, under any administration, has done that. This approach would bypass that safe, established supply line. Canada, the country from which we would import these drugs, has said that they couldn’t guarantee the safety of the drugs and they couldn’t logistically support this type of importation. Finally, our own accountants, the Congressional Budget Office could not find there to be any substantial savings through importation. There just seems to be a bunch of reasons not to attempt this dangerous approach.
A question was asked about changes to Medicare. The person said they had heard that there were changes coming to Medicare. We answered that there were many proposed changes but no substantial changes so far. We did acknowledge that more flexibility has been given to Medicare Advantage programs as Medicare tries to transition from a fee for service approach to a value-based approach. I do want to add that as we get closer to the November elections you will hear more and more rhetoric about our healthcare. Candidates will make promises and accuse their opponents of cutting Medicare. We will stay up to date on the rhetoric here at Seniors Speak Out and sift the wheat from the chaff and help you identify what is important and what is election year hot air.
A question was asked about any positive changes to Medicare Part D, Medicare’s prescription drug program. I answered that the biggest improvement that I could see was to put a cap on the yearly out-of-pocket costs for drugs. It makes so much sense. It would give people the peace of mind they deserve as they plan for, or are already in the midst of, retirement. We’ll talk more about Medicare Part D in our next town hall on September 16 now at 4:00 PM ET. You can register here.
The final question asked if the cost of getting a drug approved by the FDA was a reason that drug prices were high. We pointed out that the FDA was the gold standard for drug safety. We feel safe in taking new drugs because of their reputation. Getting a drug approved in this country is a billion-dollar undertaking but the safety and efficacy of these new and ever more complicated drugs is worth it. Investors wouldn’t invest money if there was something more than a very small chance of problems after approval. The FDA is recognized and respected worldwide. Having said that, there is administrative red tape that is costly and could be improved. An increase in transparency could speed up approvals. There are unique pipelines that could be developed that would speed up approvals and lower costs. These types of improvements should be explored. Reducing costs anywhere in the research and development cycle could have a positive impact on drug costs.
I appreciate your interest and great questions at these tele town halls. I wish I could get out to talk to you in person and listen to your opinions and questions face to face. The sooner we can beat this pandemic the quicker that can happen. Thanks for your interest, I hope your summer is going great.