Rare Daily Staff
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ranking Member Ron Wyden, D-Oregon have introduced legislation they say would lower the price of prescription drugs and save the government $100 billion over ten years.
The so-called Prescription Drug Pricing Reduction Act of 2019 legislation, the product of a six-month, bipartisan effort, is expected to be marked up in committee on July 25.
“The cost of many prescription drugs is too high. Without action, we’re on an unsustainable path for taxpayers, seniors and all Americans,” said Senators Grassley and Wyden in a joint statement.
The legislation seeks to simplify Medicare’s drug programs, protect beneficiaries with an out-of-pocket spending cap, and improving incentives to increase negotiation between prescription drug plans and manufacturers, among other measures.
Based on a Congressional Budget Office analysis, they said the government will save $85 billion over ten years through a proposed redesign of Medicare Part D and inflation-rebate policies. The government will save an additional $15 billion through clarification of how prices are calculated and increasing the maximum rebate amount in Medicaid.
Beneficiaries would save $27 billion in out-of-pocket expenses through the combination of Medicare Part D and inflation-rebate policies. They will also save $5 billion in premiums during that time as well from the combination of those policies.
“Passing these reforms, especially those that will affect some of the most entrenched interests in Washington, is never easy,” they said. “But Americans are demanding action and reform is long overdue.”
The pharmaceutical and biotechnology industry criticized the legislation, in part for doing little to address the role insurance companies and pharmacy benefits managers play in the cost of drugs in the United States.
“The proposal does almost nothing to hold insurance companies and middlemen accountable for shifting more of the cost burden onto patients. Instead of eliminating distortions within the drug pricing system, this proposal could create and exacerbate perverse incentives that disadvantage patients and taxpayers,” said Tom DiLenge, the Biotechnology Innovation Organization’s president of advocacy, law & public policy division. “It also doesn’t require insurers to pass the massive rebates they receive from drug companies through to patients to lower their out-of-pocket costs or allow patients to pay their costs over time to enhance access and improve health outcomes.”
Photo: Senator Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee