AARP headquarters in Washington, D.C.
Leading interest groups continue to stake out positions on the Medicare Drug Price Negotiation Program, which aims to save $25 billion annually by 2031 through price negotiations for drugs that are most costly to Medicare.
The AARP and AARP Foundation on Monday filed an amicus brief urging the U.S. District Court for the District of Columbia to dismiss Merck & Co.'s lawsuit challenging the program. The brief supports the U.S. Department of Health and Human Services against Merck, the manufacturer of type 2 diabetes medicine Januvia. It said the drug's list price has jumped more than 275% since entering the market in 2006 and has accounted for $21.6 billion in Medicare Part D spending between 2017 and May 2023.
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"Now that the law allows Medicare to negotiate lower drug prices, the public and the Medicare program can evaluate whether the exorbitant prices are justified," said William Alvarado Rivera, the foundation's senior vice president for litigation. "Drug companies like Merck are scrambling to keep the special treatment that allowed them to charge whatever price they wanted at the expense of older people's health and financial stability. We cannot let skyrocketing prices stop millions of older adults from accessing affordable medications for chronic conditions."
In 2022, about 9 million Medicare Part D beneficiaries took at least one of the 10 drugs selected for negotiation, according to the AARP. "In that year alone, they paid more than $3.4 billion in out-of-pocket costs for just these 10 drugs," the brief said. "For beneficiaries without additional financial assistance, average annual out-of-pocket costs for these drugs were as high as $6,497 per beneficiary. Unfortunately, prescription drug prices are so high that millions of beneficiaries simply cannot afford their medication. As a result, they are either foregoing taking their medication altogether or making desperate choices to ration their care."
Related: Drug price negotiations are on: 5 things to know about the impact on the industry
AARP filed an amicus brief in a similar case brought by the Chamber of Commerce in federal court in Ohio. A 2023 AARP Public Policy Institute report found that pharmaceutical companies have increased the prices of the top 25 Medicare Part D drugs by an average of 225%, and 24 of the drugs exceeded the rate of inflation.
Under the Biden Administration policy, Medicare can directly negotiate the cost of 10 drugs with manufacturers for the first time ever, but pharmaceutical companies launched a blitz of lawsuits hoping to stop the policy from taking effect. AARP rejects claims from business interests that a pricing program would destroy businesses, give too much power to the government and reduce innovation.
"The industry claims that Medicare negotiation will stifle innovation, but evidence shows that the law will support research and development while also saving billions of dollars for seniors, taxpayers and Medicare," Rivera said. "For the sake of protecting Americans' lives, the law must be upheld."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
