LETTER: Drug costs, price caps and cost shifting
I see that President Joe Biden came to Las Vegas to tout his “negotiations” with pharmaceutical manufacturers and pharmacy benefit managers in order to pay lower prices for high cost drugs for Medicare recipients. Please know that he is not negotiating. He is telling them that if they want government business, this is what we taxpayers will pay.
The problem is that these businesses expect to get, for example, $1 for a certain drug in order to meet their business goals. If the government pays only 65 cents, then these companies must get $1.35 to make up for that gap. This is what is known as cost shifting. This cost shift gets passed on to non Medicare patients who have little clout and no leverage, which raises their costs.
Mr. Biden’s plan is not a win-win. It is a win for some Medicare recipients and a loss for everyone else. Your costs are about to rise. Thanks a lot, Joe.