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More than 1.1 million deaths among Medicare recipients are due to the high cost of drugs

Medicare negotiation could result in 94,000 fewer deaths annually, and reduce spending by $475.9 billion by 2030.

Jeff Lagasse, Associate Editor

More than 1.1 million Medicare patients could die over the next decade because they can't afford to pay for their prescription medications, according to a new study released by the West Health Policy Center, a nonprofit and nonpartisan policy research group.

If current drug pricing trends continue, it's estimated that cost-related nonadherence to drug therapy will result in the premature deaths of 112,000 beneficiaries a year, making it a leading cause of death in the U.S. – ahead of diabetes, influenza, pneumonia and kidney disease. 

Millions more will suffer worsening health conditions and run up medical expenses that will cost Medicare an additional $177.4 billion by 2030, or $18 billion a year for the next 10 years.

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For the study, researchers developed a 10-year model representative of the majority of Medicare beneficiaries with chronic conditions. The model allows users to estimate how different levels of price reductions would lower the number of premature deaths and decrease Medicare spending on a sliding scale.

Researchers also modeled what would happen if Medicare was allowed to bring down drug prices for its beneficiaries through direct negotiation with drug companies, as described in H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, passed by the U.S. House of Representatives last year. 

They found Medicare negotiation could result in 94,000 fewer deaths annually. The model also found that the policy would reduce Medicare spending by $475.9 billion by 2030.

WHAT'S THE IMPACT?

Failing to take medications as prescribed is one of the biggest contributors to poor health, hospital admissions, higher healthcare costs and preventable deaths. And the report showed the issue is growing, a direct result of runaway drug prices and a lack of policies and regulations that make drugs more affordable.

The price of prescription medications has skyrocketed in recent years. Between 2007 and 2018, list prices for branded pharmaceutical products increased by 159%, and there are few signs of it slowing. According to the Centers for Medicare and Medicaid Services, spending on prescription drugs will grow faster than any other major medical goods or services over the next several years.

Under Medicare, beneficiaries must pay 25% of the cost of generic and brand-name medications. For many people with multiple chronic conditions, this could add up to thousands of dollars a year in out-of-pocket costs.

THE LARGER TREND

In September, President Donald Trump signed an executive order aimed at lowering drug prices, which calls for Medicare to pay the same price for certain prescription drugs that other countries pay.

It effectively repealed a previous executive order that was nearly identical in concept, but that Trump held back on to see if he could negotiate a better deal with drug companies. The new executive order expands the list of drugs covered to include both Medicare Parts B and D, the idea being that Medicare would not pay more for drugs than the lower prices paid by other countries.

The administration has tried a number of different tactics to lower drug prices. By the end of July, Trump had signed four executive orders with that goal, including one that reinstates a previously withdrawn rebate rule. In the order, pharmacy benefit managers would no longer give health plans a portion of the drug savings, but give the rebates as discounts to consumers. 

The administration said the rule would save seniors an estimated $30 billion per year, but insurers and others said it would only increase prices for consumers. Insurers have said they use rebates to decrease premiums for all consumers.

The Office of Management and Budget has reviewed the rule, thus paving the way for the Centers for Medicare and Medicaid Services to release a final rule. 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com