Long-Awaited Drug Pricing Bill From Senate Finance Committee Would Cap Medicare ‘Part D’ Copays For First Time

Long-Awaited Drug Pricing Bill From Senate Finance Committee Would Cap Medicare ‘Part D’ Copays For First Time

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The bipartisan effort, spearheaded by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), is projected to save the federal government $85 billion on drug spending over the next decade. The long-awaited legislation comes amid mounting pressure for Congress to act on rising drug costs.

Two veteran senators — a Republican and a Democrat — unveiled compromise legislation Tuesday to reduce prescription drug costs for millions of Medicare recipients, while saving money for federal and state health care programs serving seniors and low-income people. Iowa Republican Chuck Grassley and Oregon Democrat Ron Wyden said the bill would for the first time limit drug copays for people with Medicare's "Part D" prescription plan , by capping patients' out-of-pocket costs at $3,100 a year starting in 2022. They're hoping to have it ready soon for votes on the Senate floor. (Alonso-Zaldivar, 7/23)

“The cost of many prescription drugs is too high,” Grassley and Wyden said in a joint statement Tuesday. “Without action, we’re on an unsustainable path for taxpayers, seniors and all Americans. A working class family shouldn’t have to pick between making their rent or mortgage payment and being able to afford their kids’ medications.” (7/23)

The bill also tweaks other federal drug-payment approaches, including implementing a value-based system for some gene therapies under Medicaid. The bill also ups the maximum rebate allowed under Medicaid, which the committee projected would save taxpayers $15 billion. The committee estimated the legislation would save beneficiaries $27 billion in out-of-pocket costs and an additional $5 billion in premiums in the coming 10-year period. Those savings are in addition to the $85 billion in savings the bill would generate for taxpayers. (Facher and Florko, 7/23)

The measure would also save seniors $27 billion in out-of-pocket costs over that period and $5 billion from slightly lower premiums, according to the CBO. The White House endorsed the proposal and said it would build support among senators. President Trump has made lowering drug prices a top priority headed into his 2020 reelection campaign and is eager to strike a deal with Congress that he can tout on the campaign trail. (Abutaleb, 7/23)

CBO also estimates that Medicare beneficiaries will save $27 billion in out-of-pocket costs and $5 billion in premium spending from the two policies. The bill would place a similar inflation cap on physician-administered drugs in Medicare Part B — pricey treatments for cancer, rheumatoid arthritis and other conditions that the Trump administration wants to buy at the sums paid in developed countries overseas. Grassley’s office worked closely with Trump's health department on the drug bill, but declined to say whether the administration ultimately supports this alternate approach. Another provision would cap seniors' out-of-pocket spending in Medicare Part D and shift more of the payments for the catastrophic phase — when prescription drugs cost patients thousands of dollars — to health plans and drugmakers rather than the government. (Cancryn and Owermohle, 7/23)

It is not clear how much support this, or any other drug pricing measure proposed in Congress, will receive ahead of 2020 presidential elections. But the cost of U.S. healthcare is sure to be a top campaign issue. A spokesman said the White House was encouraged by the bipartisan package. "Today we are engaging with coalitions to help build support," spokesman Judd Deere wrote on Twitter. (7/23)

Some lawmakers and business groups are already lining up on the other side, saying the legislation goes too far in limiting drugmakers’ discretion to set prices and doesn’t do enough to help consumers. Getting drug prices under control has been a top priority of the Trump administration and lawmakers of both parties, but action so far has been limited. Last week, the White House pulled back a proposal that would have curbed rebates paid to drug-plan middlemen, and earlier this week Democrats in the House said they would put off debate on a drug-price bill until September. (Edney, 7/23)

Michael Zona, GOP spokesman for the committee, said amendments must pass a "germaneness test" to be considered. And they must include a way to pay for any increased cost. Lawmakers who want to offer amendments have to file their changes by noon Wednesday. (Luthi, 7/23)

“I think it’s moving in a positive direction,” said Sen. John Cornyn (R-Texas). “The CBO score was certainly encouraging.” But other GOP senators sounded a less positive note. “I still have some concerns, but I hope we can work it out,” said Sen. Pat Roberts (R-Kan.). Asked if he could vote for it on Thursday, Roberts said, “We’ll see.” (Sullivan, 7/23)

When Washington returned from its winter holiday break in January, it seemed everyone was talking about lowering drug prices. Energized by a new class of freshmen and a few weeks away from the office, members of Congress were ready to wag their fingers at drug company executives and pitch their fixes. President Donald Trump had unveiled some of his solutions to a problem he said was a top priority, and more would follow. (Huetteman, 7/24)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.

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