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Reducing the cost of prescription drugs beyond the Inflation Reduction Act

Amazon opens an online pharmacy in attempt to shake up another major industry
Posted at 10:27 AM, Sep 01, 2022
and last updated 2022-09-01 12:27:38-04

DENVER, Colo. — Millions of Americans struggle to afford the cost of prescription drugs. Now, for the first time in American history, the federal government will have the power to negotiate prescription drug prices.

This change is because of the recent passing of the Inflation Reduction Act. It's something Kim Bimestefer, the executive director of the Colorado Department of Healthcare Policy and Financing, says is long overdue.

"Up until just the last few weeks, this country has not negotiated the price of drugs with manufacturers, so the rest of the world has some form of national healthcare and we are the outlier," Bimestefer said. "A third of Americans don't take their drugs the way they are supposed to because they can't afford to."

The Inflation Reduction Act will allow the government to negotiate the prices of 10 drugs.

"Those drugs that they are going to negotiate, they'll probably be those really high-cost drugs about less than 2% are so expensive they are consuming about 50% of the prescription drug spend," Bimestefer said.

However, as Adam Fox, the deputy director of the Colorado consumer health initiative, explains, it's going to be a while.

"It is a bit of a long runway and realistically consumers aren't going to see some of those benefits probably until 2026," Fox said.

Colorado is one state that just recently made strides in its drug importation program by signing contracts on both sides of the US/Canada border. Other states are watching what's happening. If approved by the FDA, Coloradans will be able to purchase an imported drug for around 60% less than the US cost.

"And this solution is very complimentary to that. Many of those drugs were not permitted to be imported through the federal government's guidelines, so it's a nice compliment to have what has just recently been passed and this importation program operating side by side," Bimestefer said.

"That just raises the importance of some of the state-level work and our drug importation program because that can potentially provide more impact faster and sooner," Fox said.

Lauren Reveley is the Drug Importation Program Manager.

"This is kind of the first step in a continued process of implementation, so these contracts are to set up the new marketplace and the supply chain to bring imported products to Colorado," Reveley said.

Reveley says the state plans to submit its application to the FDA this fall. Florida was the first state to file an application. Vermont, Maine, New Mexico and New Hampshire are others that have importation programs. Yet so far no state programs have been approved by the feds.

"That needs federal approval and that takes unfortunately a lot of time," Fox said.

"I think what we've built is repeatable by other states, and we don't want to be the lone state that is successful we want to help bring others along," Bimestefer said.

"And what we often see is if enough states pass similar policies, that usually moves to the federal level," Fox said.

The work to lower prescription drug prices stems from a long history.

"Sometimes we've got to disrupt the status quo and this process that we're going through is going to do that," Bimestefer said.

"The unfortunate reality is there is a lot of profit and money to be made in health care in general and prescription drugs in particular and that has created a really prominent incentive to keep the costs high," Fox said.

So, they say the Inflation Reduction Act, in combination with federal approval of drug importation programs from states, will create a massive change for Americans.