Some Michigan residents on Medicare could see reductions in the cost of their prescription drugs in the coming years.
Michigan Congressional Democrats said Tuesday that the newly signed Inflation Reduction Act will limit out-of-pocket insulin costs for Medicare recipients to $35 per month.
It also requires the system to negotiate prices for some drugs. A 2003 law had previously prevented that practice.
Democratic Senator Debbie Stabenow called negotiation key to lowering prescription costs.
“Every other country negotiates for the best price but us. So, we end up being the ones that they raise the roof on the prices. Just because they can. But not anymore,” Stabenow told reporters in Lansing Tuesday.
Stabenow spoke alongside Congresswoman Elissa Slotkin (D-MI 8) at the Forest Community Health Center in Lansing. Together, they made the case the legislation would cover some of its own costs.
“One, because of the huge cost savings we get by negotiating drug prices over time, what that brings in. But also, a 15% minimum corporate tax rate on the 150 biggest billion-dollar companies,” Slotkin said.
The legislation, which narrowly squeezed through Congress using a process known as budget reconciliation, received heavy pushback from the pharmaceutical industry.
The trade group Pharmaceutical Research and Manufacturers of America (PhRMA) lobbied and bought ads opposing the legislation. In an August 7 press release, it claimed limiting drug prices would lead to less innovation.
“Various experts, biotech investors and patient advocates agree that this bill will lead to fewer new cures and treatments for patients battling cancer, Alzheimer’s and other diseases,” the group said.
During their Lansing appearance, both Slotkin and Stabenow pushed back on that premise. They argued the industry overspends on lobbying and television ads compared to its budget for research and development.
“Most of the basic research in our country is funding by us, by taxpayers. Hundreds of billions of dollars that goes to companies to invest in cutting edge research, which I support. Sign me up. Sign me up. I just think if we’re helping to pay for the discoveries, we ought to get a better deal,” Stabenow said.
Following the Inflation Reduction Act’s signing Tuesday, PhRMA President and CEO Stephen Ubl said the legislation doesn’t address the root causes of high prices.
“We will explore every opportunity to mitigate the harmful impacts from the unprecedented government price setting system being put in place by this law.”
PhRMA pointed to insurance companies as contributing to high medical costs.
Slotkin and Stabenow said Democrats hope to expand the price caps on insulin beyond just Medicare recipients in the future.
