Democratic Legislation Package Takes Aim at High Prescription Drug Prices

President Biden signed the Inflation Reduction Act into law Aug. 16. The Democrat’s marquee legislative package includes major prescription drug reforms and gives Medicare authority to negotiate the price of some Part B and Part D drugs.

Drug Price Negotiations Unlikely to Affect Ophthalmology

The bill will give Medicare the authority to negotiate drug prices for some of the most expensive drugs based on total expenditures. It is unlikely to directly affect high-cost ophthalmic biologics, like Lucentis and Eylea, because of how Congress structured the bill.

• Under the plan, Medicare could only negotiate prices for high-priced drugs with no biosimilar or generic alternative.
• Eligible drugs must have had approval by the U.S. Food and Drug Administration for at least seven years (small molecule drugs) or 11 years (biologics).
• It exempts drugs indicated for a single rare disease or new formulations of a drug, such as extended-release versions.

Although ophthalmology drugs are largely untargeted, prior to the vote the Academy joined with other physician specialties to urge Senate Finance Committee leaders to ensure that drug negotiation would not negatively affect already challenged physician practices. We raised concerns that the bill could result in significant cuts to provider reimbursement and potentially hurt patient care.

Ophthalmic biologics do currently rank as some of the most expensive drugs in Medicare based on total expenditures. However, all of these either already have or will likely have a biosimilar by 2028, when the plan starts to include Part B drugs.

• Lucentis has two biosimilars approved by the U.S. Food and Drug Administration.
• Eylea faces looming competition with multiple companies pursuing a biosimilar.

If the bill passes as expected, Medicare would only negotiate Part D drugs at first.

• 2026: 10 Part D drugs 
• 2027: 15 Part D drugs 
• 2028: 15 total Part B and D drugs
• 2029 and beyond: 20 total Part B and D drugs

Other Prescription Drug Provisions

Most of the plan’s reforms focus on changes to Medicare Part D. It would:

• Cap patients’ Part D spending at $2,000, starting in 2025.
• Eliminate 5% beneficiary co-insurance for Part D catastrophic coverage, starting in 2024.
• $35 monthly cap on insulin costs for Medicare beneficiaries.
• Limit Part D premium growth to 6% from 2024-29.
• Eliminate cost-sharing for adult vaccines under Part D.

The Academy strongly supports lower costs for patients. These Medicare Part D reforms have the potential to help ophthalmology patients, who have faced rising drug costs for years.

Sunday’s Senate vote came after over a year of deliberations and revisions to the initial Build Back Better proposal. We expect the House to vote on it Friday, Aug. 12.