Medicare enrollees to see Inflation Reduction Act benefits ‘very soon,’ health official says
Department of Health and Human Services CMS Administrator Chiquita Brooks-LaSure discusses the impact of the Inflation Reduction Act on Medicaid and Medicare, health care costs, and the law’s benefits.
Video Transcript
ANJALEE KHEMLANI: President Biden signed the Inflation Reduction Act last week, as he continues his efforts to meaningfully lower health care costs for people across the country. For more on the impact of this bill that it has on Medicaid, we welcome in US Department of Health and Human Services CMS Administrator Chiquita Brooks-LaSure. Administrator, thank you so much for joining us today.
CHIQUITA BROOKS-LASURE: Thank you so much for having me.
ANJALEE KHEMLANI: I want to get right to it. Obviously, you have a lot-- a huge task ahead of you, and the clock is now ticking. I understand you're going to need to bring in some outside experts on this. But I want to know, what kind of skills are you going to be looking for? And where do you imagine that you're going to be hiring some of these people from? I know the private sector is obviously going to be interested in getting in on the ground.
CHIQUITA BROOKS-LASURE: Absolutely. We are so excited to have this new opportunity. The Biden-Harris administration has really made affordable health care a huge priority, and this legislation is a huge step forward. Some of our team is already expert in a number of these provisions. But we really want to look to the outside as well. It's been a priority of ours to make sure that we engage with stakeholders as we develop new policy. We'll also be looking from experts from some of our sister agencies, so like Veterans Affairs, who already does negotiate with drug companies, which is a particular part of the new authority that we've been given under this legislation.
ANJALEE KHEMLANI: Absolutely. I'm sure you've heard some of the same comments that I have in terms of what the drug companies will do in response to this. In part, the analogy-- I'm sure you've heard this over the years-- the balloon analogy, where they might start-- we might start to see increase in prices in some areas as a result of this. I've already looked-- taken a look, and I read through a lot of the language there, as I'm sure you have. It's a lot of caveats. So I wonder, how are you anticipating these moves and making sure that these drug companies don't really play games?
CHIQUITA BROOKS-LASURE: So I think a couple of really important pieces. One, the legislation really makes clear that beneficiaries, the people who are enrolled in Medicare, those who are over 65, those who have disabilities, really see the benefit of this legislation very soon. So right away next year, people who depend on insulin will see lower costs, $35 when you go to the pharmacist to get your insulin, a cap on out-of-pocket costs over time. These provisions take place regardless of some of the other important provisions that are in that legislation. So I just want to make clear.
And I see you have on your screen just such-- so many of the provisions that are going to make such a difference for people who depend on Medicare for their drug costs, something I hear about all the time. Then another provision that's really around what you were saying is, how do we make sure that drug companies don't play games with us? And we, of course, want to work with the industry.
But one of the provisions that takes place immediately is that drug companies will be penalized if they increase their costs of drugs faster than inflation. And that's something that will really, I think, help to make sure that drug companies aren't ramping up their costs, and that benefit will come to people. So if they do increase their costs more rapidly, then that will lower cost to the people who go and get their drugs from their physician.
ANJALEE KHEMLANI: Absolutely. I was thinking more along the lines of lowering their costs to avoid being on that top pricing. But, well, that's your job to keep a watch. I'm glad you brought up the insulin because that $35 is an interesting number to me. I know already these companies do offer that as part of assistance programs, largely for human insulin. So is there further breakdown?
And are you going to be looking into the various types of insulin products and how-- whether or not these programs, these assistance programs, may or may not go away? Because that's also part of the drug pricing is that these-- you know, it looks at the price before the discounts take effect. And that is something that people often say, no one pays the list price. So looking at all of it from the list pricing perspective, do you think that that's going to impact some of the headway that's already been made in the industry?
CHIQUITA BROOKS-LASURE: So I think as you really are identifying, drug costs and how we actually pay for them are really complicated. And so sometimes manufacturers, drug companies are passing on discounts. Sometimes people benefit them, sometimes they don't. The legislation makes clear that people are going to benefit from those discounts. And that's why I would say the $35 cap is so important. So it's not something that's kept by the insurance company. It's not a discount that is kept by the PBMs. It's something that beneficiaries will immediately begin to play.
But all of the things you're describing, really thinking about how do we make sure that drug costs are lowered for people and also for the government so that we as taxpayers are not overpaying, that is going to be a process that we will engage with a variety of stakeholders to make sure that we move in a better direction. Because I think we all know that the way drug costs are being paid in our country is not sustainable, both for people and for the federal government. And it's not one entity's fault or problem, it's something that we need to look holistically about how we approach it. And that's the tact that we're going to take here at CMS.
ANJALEE KHEMLANI: Well, I do not envy you. That is a big role ahead and a lot to work with. Chiquita Brooks-LaSure, US Department of Health and Human Services CMS administrator, thank you for joining us this morning.
CHIQUITA BROOKS-LASURE: Thank you.
