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Lower Drug Prices Expected After Biden Medicare Move


Wednesday, October 5, 2022   

Some 930,000 Colorado Medicare recipients will save money on medications starting next year, thanks to provisions in President Joe Biden's Inflation Reduction Act which allows Medicare to once again negotiate prices with drug companies.

Bob Murphy, state director for AARP Colorado, has been calling on Congress to make prescription drugs more affordable for years, and said volunteers who placed millions of calls to Congressional offices won the day against a formidable opponent.

"The pharmaceutical industry's advertising, which is, what, $5 billion or $6 billion a year," Murphy pointed out. "Their contributions to Congress, which is north of $180 million a year. But the thing that we had on our side at AARP was 38 million members."

Over the next 10 years, the new law is projected to save 64 million people on Medicare -- and taxpayers -- $100 billion, and cut the federal deficit by $237 billion. The cost of insulin will be capped at $35 per month, and drug companies will have to pay rebates if prices rise faster than inflation. Out-of-pocket costs will be capped at $2,000 per year.

Murphy argued a law passed by Congress two decades ago to prevent Medicare from leveraging its substantial purchasing power to keep the cost of medicines older Americans rely on affordable never made any sense.

"So now that they can negotiate prices on select drugs, Medicare recipients are going to -- slowly over time, over the next five or six years -- are going to be saving a lot of money on prescription drugs," Murphy explained.

If Republicans win control of Congress in the November election, Murphy noted he would not be surprised if there were efforts to undo Medicare's ability to negotiate drug prices, but he said if it happens, AARP will keep fighting.

"I wouldn't want to be the senator or congressperson who has to go back and try to explain to my voters that I have voted to overturn something that will save both them money, and save the government a lot of money," Murphy remarked.

Disclosure: AARP Colorado contributes to our fund for reporting on Civic Engagement, Health Issues, Livable Wages/Working Families, and Senior Issues. If you would like to help support news in the public interest, click here.

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