Under the Inflation Reduction Act, death panels will determine what medicines Medicare should pay for to free up money for other government spending.

That’s not hyperbole. Under the Inflation Reduction Act (IRA), seniors still pay retail prices. (And only the 3 percent of Medicare beneficiaries who spend more than $2,000 out of pocket will see costs capped.) Medicare will determine the cost-effectiveness of medicine to generate discounts in the form of $250 billion in cash rebates. Specifically, under IRA, Medicare will set prices based on how much a medicine costs to add an additional year of healthy living (called a quality-adjusted year, or QALY) compared to or on top of existing therapies.

While Medicare can’t use cost-effectiveness research (CER) to “treat extending the life of elderly, disabled or terminally ill individuals as less valuable,” it can be used to establish at what price a drug should be made available.

CER is already approved by states to limit access to new medicines under Medicaid.  The therapies include those for cystic fibrosis, rare cancers and sickle cell anemia; treatments that primarily help minorities, the disabled and the terminally ill. Pharmacy benefit managers who administer the Medicare drug benefit and the Veterans Health Administration already use CER to negotiate drug prices.

They all contract with a group called the Institute for Clinical and Economic Review (ICER) to carry out CER.  Since 2016, ICER has deemed only 3 medicines out of nearly 100 evaluated for rare and life-threatening diseases cost-effective at or near the average 20 percent rebated price. Most other drug prices would have to be cut by 50 percent to 100 percent. That includes medicines for multiple myeloma, sickle cell anemia, ALS and chronic kidney disease.

Indeed, ICER counts the ability of a new drug to improve well-being by extending life as a cost, not a benefit. ICER claimed a medicine to reduce anemia from chronic kidney disease was not cost-effective “because more people will live longer, more people will be at risk of needing care for end-organ damage, increasing the cost of keeping people alive.”

Similarly, it noted that new sickle cell anemia drugs reduce the “risk of death from these chronic conditions,” making them “less cost-effective.” Incredibly ICER “chose to use the highest estimates of the risk of death to give an optimistic estimate of the (cost-effectiveness) of the treatment effect.”

Further, ICER claims that new medicines for rare diseases, especially those afflicting children, are too costly at any price. As ICER president Steve Pearson wrote, orphan drug spending places an “undue burden … on others for the sake of a few.” Specifically, ICER asserts, “The opportunity cost of supporting the use of ultra-orphan drugs necessitates that patients with a more common disease, for which a cost-effective treatment is available, are denied treatment.”

Most drugs for rare diseases also reduce the risk and severity of common diseases. While curative gene and cell therapies may cost hundreds of thousands of dollars, new methods of hedging financial risk and paying for treatments over time make their cost affordable. And in any event, since we can save $800 billion by eliminating wasteful health spending, why do ICER and CER target dying children to save money?

Because it’s a quick way to generate lots of money for other government programs.

Indeed, in 2016 ICER asserted:  “When we’re paying for drugs and don’t know the drug’s value, we will be “siphoning off resources for other things we need like better schools and more resources for local police, roads and bridges.”  Or, in the case of the IRA, siphoning money for 87,000 IRS agents and $249 billion in climate change tax credits for corporations. Ultimately, ICER and other comparative effectiveness firms are de facto death panels deployed by the Democrats to turn dying patients into cash cows for corporate welfare.

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