Washington – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) released the following statement on the broad, bipartisan passage of the Prescription Drug Pricing Reduction Act, which he co-authored with Ranking Member Ron Wyden (D-Ore.). The bill passed out of committee by a 19-9 vote.
“The broad, bipartisan passage of the Prescription Drug Pricing Reduction Act out of the Senate Finance Committee is the first step toward fulfilling a promise that we’ve all made to the American people – lowering prescription drug prices. I’d like to thank Ranking Member Wyden for his partnership on this legislation, and my colleagues on the committee who have contributed to this effort. I also want to thank President Trump and Secretary Azar for their endorsement of our legislation.
“Everyone can agree that the price of many prescription drugs is too high. These skyrocketing costs hurt seniors, lower-income earners, people with disabilities and all Americans. This legislation is the result of months of working across the aisle to find areas of consensus. Its commonsense reforms will save more than $100 billion and deliver real relief to patients across the board while preserving innovation in the health care industry.
“The Senate is making important moves to improve our nation’s health care system. In addition to the bipartisan legislation our committee passed today, there are good policies coming from the Senate Judiciary and HELP Committees as well. This is the kind of bipartisan action necessary to enact real reforms that will benefit patients and taxpayers.
“Americans are demanding action to reduce prescription drug prices. It’s past time we take it. I hope we can bring this important health care reform legislation to a vote this fall and finally give patients the relief they need and deserve.”
Congressional Budget Office (CBO) Score:
- Taxpayers save $85 billion in Medicare: The combination of the Part D redesign and the inflation-rebate policies would save Medicare approximately $85 billion over the 2019-2029 period ($35 billion and $50 billion, respectively).
- Beneficiaries save $27 billion in out-of-pocket costs: The combination of the two policies would reduce beneficiaries’ spending for cost-sharing, also known as out-of-pocket expenses, by approximately $27 billion over the same 10-year period ($20 billion and $7 billion, respectively).
- Beneficiaries save $5 billion in premiums: The combination of the two policies would reduce beneficiaries’ spending on premiums by approximately $5 billion over the same 10-year period ($1 billion and $4 billion, respectively).
- Taxpayers save $15 billion in Medicaid: Clarifying how prices are calculated and increasing the maximum rebate amount in Medicaid save the federal government approximately $15 billion.
- Americans in the commercial market would see savings: The inflation-rebate provision would reduce costs for prescription drug benefits offered by commercial insurance plans and the redesign provision would not have a substantial effect on prescription drug benefits offered by commercial insurance plans.
Details of the legislation can be found below. Text of the chairman’s mark can be found HERE. Modifications to the chairman’s mark can be found HERE. Endorsements of the legislation can be found HERE and HERE.
- Modernize and improve the successful Part D program by:
- Simplifying the program’s design;
- Protecting beneficiaries with high costs and providing peace of mind through an on out-of-pocket spending cap;
- Improving incentives to increase negotiation between prescription drug plans and manufacturers;
- Protecting the program from rampant manufacturer drug price increases; and
- Benefiting patients and taxpayers through lower government spending, premiums, and out-of-pocket costs.
- Increase transparency into pharmacy benefit manager (PBM) practices and manufacturer drug pricing decisions;
- Improve how Medicare calculates Part B prescription drug payment amounts to lower spending and beneficiary out-of-pocket costs; and
- Eliminate excess Part B drug payments that drive up beneficiary and program costs.
- Increase transparency and make manufacturers more accountable to federal taxpayers;
- Allow Medicaid to pay for gene therapies for rare disease through new risk-sharing value-based agreements, which will increase access to life-saving, miracle treatments for the most vulnerable;
- Apply pressure on manufacturers to lower list prices and report more accurate calculations of their rebate obligations; and
- Prevent spread pricing and gaming in the Medicaid program by PBMs to ensure that beneficiaries, states and the federal government are getting the best deal possible.