September 24, 2023 - WASHINGTON - Last week, AARP and AARP Foundation submitted an amicus brief for consideration in the U.S. District Court for the District of Columbia, urging the court to dismiss Merck & Co.’s lawsuit challenging Medicare’s historic new authority to negotiate lower prescription drug prices. The brief argues in favor of the U.S. Department of Health and Human Services’ motion for summary judgment, highlighting the harm older Americans would face if the negotiation program is struck down.
William Alvarado Rivera, Senior Vice President for Litigation at AARP Foundation, said:
“Now that the law allows Medicare to negotiate lower drug prices, the public and the Medicare program can evaluate whether the exorbitant prices are justified. Drug companies like Merck are scrambling to keep the special treatment that allowed them to charge whatever price they wanted at the expense of older people’s health and financial stability. We cannot let skyrocketing prices stop millions of older adults from accessing affordable medications for chronic conditions. The industry claims that Medicare negotiation will stifle innovation, but evidence shows that the law will support research and development while also saving billions of dollars for seniors, taxpayers, and Medicare. For the sake of protecting Americans’ lives, the law must be upheld.”
According to the brief:
- The first 10 drugs selected for negotiation underscore the financial toll that high drug prices have on older adults. In 2022, about 9 million Medicare Part D beneficiaries took at least one of the 10 drugs selected for negotiation. In that year alone, they paid more than $3.4 billion in out-of-pocket costs for just these 10 drugs. For beneficiaries without additional financial assistance, average annual out-of-pocket costs for these drugs were as high as $6,497 per beneficiary. Unfortunately, prescription drug prices are so high that millions of beneficiaries simply cannot afford their medication. As a result, they are either foregoing taking their medication altogether or making desperate choices to ration their care.
- While HHS is only negotiating prices for a subset of the costliest drugs, the negotiations will greatly benefit Medicare and beneficiary spending and the integrity of the program. First, it will save Medicare and taxpayers billions of dollars. Second, it will bring program payments for prescription drugs in line with how HHS pays for other Medicare items and services and how other federal health program pay for prescription drugs. Finally, it will support continued innovation while lowering drug prices.
- If the program is eliminated or weakened, drug prices and related Medicare spending will continue to increase because Medicare will still need to purchase these life-saving drugs for its beneficiaries, even though the government will have no way to justify the prices it pays. The rest of the IRA prescription drug provisions, while critical, are designed to complement drug price negotiations but cannot replace the negotiations. Thus, drug prices will continue to rise, escalating the affordability crisis.
Read the full amicus brief here.
On August 18, AARP and AARP Foundation filed an amicus brief in the U.S. District Court for the Southern District of Ohio, urging the court to dismiss the U.S. Chamber of Commerce’s attempt to block Medicare’s new authority to negotiate lower prescription drug prices.
About AARP Foundation
AARP Foundation works to end senior poverty by helping vulnerable people over 50 build economic opportunity. Our approach emphasizes equitable outcomes for populations that have faced systemic discrimination. As AARP's charitable affiliate, we serve AARP members and nonmembers alike. Through vigorous legal advocacy and evidence-based solutions, and by building supportive community connections, we foster resilience, advance equity, and restore hope. To learn more, visit aarpfoundation.org or follow @AARPFoundation on social media.
AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence and nearly 38 million members, AARP strengthens communities and advocates for what matters most to families: health security, financial stability and personal fulfillment. AARP also produces the nation's largest circulation publications: AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org or follow @AARP and @AARPadvocates on social media.