August 10, 2022
MEDIA BACKGROUND
U.S. House Set to Pass Historic Prescription Drug Reforms in the Inflation Reduction Act. What does this mean for Minnesota?
ST. PAUL, MN—On Friday, August 12, the U.S. House of Representatives is set to pass the Inflation Reduction Act (IRA) which includes historic action to address out of control prescription drug costs. Both Senator Amy Klobuchar and Senator Tina Smith have been prominent leaders on the prescription drug cost provisions. As Democrats in Congress lower prescription drug costs for Medicare, Minnesota lawmakers must also act to help everyone else.
Provisions to Lower Medicare Drug Costs in the IRA
The Inflation Reduction Act begins to address the soaring cost of prescription drugs by:
- Allowing Medicare to negotiate for lower prices on some drugs for the first time ever
- Capping Medicare enrollees’ out of pocket spending at $2000 per year and insulin copays at $35 dollars per month
- Penalizing pharmaceutical companies for raising the price of Medicare drugs faster than the rate of inflation
Why State Reforms are Still Necessary
While federal action is a step in the right direction, state reforms are critical to lowering prescription drug costs in Minnesota. Attorney General Keith Ellison made a Task Force on Lowering Pharmaceutical Drug Costs a priority in his first term. Many recommendations, including a Prescription Drug Affordability Board were passed by the DFL state House. While federal reforms will largely impact Medicare enrollees, state action is needed to lower prescription drug costs for everyone else.
Minnesota Political Landscape
This November, every statewide office and legislative seat are up for election. Since 2018, DFL lawmakers have led meaningful work to address the cost of prescription drugs including enacting Pharmaceutical Benefits Manager (PBM) reforms, the Alec Smith Emergency Insulin Act, and prescription co-pay protections for certain chronic conditions. Only the DFL-led House, however, has passed legislation that would meaningfully protect consumers from the soaring cost of prescription drugs. Whether it was a Prescription Drug Affordability Board—which then-Sen. Scott Jensen authored in 2019—or Price Gouging protections, the GOP-led Senate has steadfastly refused to hear these and other key bills.
A report commissioned by TakeAction Minnesota, Corporate Money in Minnesota State Politics, found PhRMA spending on state lobbying increased dramatically in 2021 over previous years:
“The industry lobby group reported spending $431,062 in 2019 and $332,800 in 2020 but more than tripled to $1,143,210 in 2021. The 2021 jump made it the largest spender on general lobbying to influence the state government last year.”[1]
Conclusion
For the first time ever, a price-ceiling will be established for certain drugs in the Medicare program. Led by Democratic members of Congress, this is a breakthrough for an industry that has raised prices of life-saving prescription drugs like insulin with impunity. These protections, while meaningful for Medicare recipients, are only the starting point for what is needed to protect millions of patients who must choose between paying for life-saving medicine or food and rent.
Prescription drug cost reform is still needed in Minnesota and states across the nation. The likelihood of enacting real policy solutions in Minnesota depends on the political landscape and the desire of state lawmakers in both parties to stand up to intense lobbying pressure from the pharmaceutical industry. Candidates for public office should be asked about their plans to lower prescription drug costs given the major gaps left by federal reform.
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TakeAction Minnesota is a statewide, independent, multiracial people’s organization working to advance democracy and equity through organizing, political action, and campaigns. The organization has offices in St. Paul, Duluth, and St. Cloud.
[1] Lobbyist Disbursement Reports filed on behalf of PhRMA by designated lobbyist Linda M Carroll-Shern, 2021. Available at https://cfb.mn.gov/reports-and-data/viewers/lobbying/lobbying-organizations/3381/2022.1/.
