House Democrats released their plan to make prescription drugs more affordable. The Democrats surely have enough votes in the U.S. House of Representatives to pass, but a Republican-controlled Senate is a different story. One thing going for this new proposal is that President Donald Trump has publically stated he wants to bring the price of prescription drugs down, which is exactly what this bill would do. Below are some of the highlights of the plan.
- The HHS secretary would identify 250 drugs without meaningful competition each year, and negotiate the prices of at least 25 of them. The negotiated price couldn’t be more than 1.2 times what other countries pay for it, on average.
- If a drug manufacturer refuses to negotiate, it’d get hit with an excise tax on annual gross sales beginning at 65% and increasing 10% every quarter that it remains out of compliance.
- The manufacturer would be required to offer the negotiated price to commercial plans.
- The plan also limits price increases in Medicare Part D and Part B to inflation (applied retroactively to 2016), creates an out-of-pocket spending cap in Part D, and restructures how Part D is paid for.
Reaction To The Plan
Tom Nickels, executive vice president American Hospital Association
The American Hospital Association applauds today’s proposal that takes significant strides toward reducing out-of-control drug prices, which continue to place patients and the providers who care for them at risk. Outrageous drug prices force too many patients into rationing their drugs or leaving their prescriptions unfilled. America’s hospitals and health systems see the consequences first hand: patients coming back through our doors sicker than when they left. Not only do our patients feel it at the pharmacy counter, but the high cost of drugs threatens the ability of hospitals and health systems to acquire needed drugs for patients in their care. We look forward to further reviewing today’s proposal and continuing to work with the Administration and the Congress to make progress on lowering drug prices.
Nancy LeaMond, executive vice president AARP
The Lower Drug Costs Now Act addresses AARP’s key priorities for lowering drug prices and the costs older Americans pay, including an out-of-pocket cap on prescription drugs for seniors in Medicare Part D, a crack-down on drug price increases, and Medicare negotiation authority, which would enable the federal government to leverage its buying power to lower prices. Medicare should be able to use its bargaining power to get a better deal for the more than 55 million seniors who rely on Medicare, especially for the highest-priced drugs and those drugs with little or no market competition. A 2018 AARP poll of 1,218 likely voters age 50-plus found that 95% of independents, 93% of Republicans, and 90% of Democrats said they support allowing federal and state governments to use their enormous buying power to negotiate for lower prescription drug prices.
This bill is far from a done deal and there is sure to be backlash from the drug companies, as this plan would surely impact their profits. The Wall Street Journal just published a story about how drug companies are concerned the bill would cut into their profits and they are gearing up with a huge lobbying campaign to defeat the bill.
