“Today, we are watching our drug pricing system break under the weight of Medicare’s inability to negotiate lower drug prices. In America, drug corporations have the power to price-set, and Biogen has set a price of $56,000 per year for a drug that has not yet been proven effective. At that price, if we only treat one-third of Alzheimer’s patients, this one drug will increase prescription drug spending in our country by 22 percent, and Medicare — the largest purchaser of drugs — has no power to bargain a reasonable price for Americans.

“Americans want new treatments for unmet needs, but the price announced today by Biogen lends further urgency for reform of our drug pricing system. Congress and the president must allow Medicare to negotiate as part of a comprehensive set of reforms like those included in H.R. 3. Americans want effective innovation, but at prices we can afford.”

Background: 

• Today, the FDA approved aducanumab to treat patients with Alzheimer’s disease; shortly after, Biogen announced a price of $56,000 a year.
  • Last fall, an FDA advisory committee declined to endorse the drug’s approval, citing insufficient clinical evidence of patient benefit.
  • In May, the Institute for Clinical and Economic Review (ICER) estimated that the annual price of aducanumab should be between $2,500 and $8,300.
  • In 2019, U.S. spending on prescription drugs was $510 billion.
  • More than 6 million Americans currently live with Alzheimer’s disease and could become eligible for aducanumab; most of these patients are enrolled in Medicare.
  • At a price of $56,000, treatment for one-third of Alzheimer’s patients, about 2 million people, would amount to $112 billion — approximately 22 percent of U.S. spending on prescription drugs in 2019.
• H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, is a Medicare negotiation bill that was reintroduced in April and would: 
  • Allow Medicare to negotiate for lower drug prices and extend lower prices to all Americans with public or private sector insurance.
  • Limit the negotiated price of drugs in Medicare to no more than 120 percent of the average of six other OECD nations.
  • Limit annual out-of-pocket costs for Medicare beneficiaries to no more than $2,000.
  • End drug company price gouging by penalizing drug companies that increase prices in Medicare Parts B and D faster than the rate of inflation.
  • Support innovation and new drug development by directing some of the expected savings to the National Institutes of Health to fund critical research and drug development.
• With Medicare negotiation, patients will pay less for their prescriptions and lives will be saved. 
  • Right now, more than 1.1 million Medicare patients could die over the next decade because they cannot afford to pay for their prescriptions.
  • If Medicare were empowered to directly negotiate prices with drug companies, there could be 94,000 fewer deaths annually.
• Medicare negotiation is overwhelmingly popular — Americans want reform. 
  • Nine out of 10 Americans back Medicare negotiation, including 97 percent of Democrats, 87 percent of independents, and 84 percent of Republicans.
  • Lowering the cost of prescription drugs and health care far outpollseven infrastructure investments as a priority for Americans.
  • Nearly 90 percent of small business owners say that drug costs are too high. Medicare negotiation would save employers $195 billion and employees $61 billion from 2023 to 2029.
  • Americans don’t buy Big Pharma’s main argument that lowering prices will stifle innovation, even when asked within the context of new vaccines.