The U.S. House Ways and Means Committee, which oversees the Medicare program, voted on Thursday in favor of House Resolution 3, the Elijah E. Cummings Lower Drug Costs Now Act.
This bill establishes several programs and requirements relating to the prices of prescription drugs.
In particular, the bill requires the Centers for Medicare & Medicaid Services (CMS) to negotiate prices for certain drugs — current law prohibits the CMS from doing so.
Specifically, the CMS must negotiate maximum prices for insulin products; and at least 25 single source, brand-name drugs that do not have generic competition and are among the 125 drugs that account for the greatest national spending, or the 125 drugs that account for the greatest spending under the Medicare prescription drug benefit and Medicare Advantage (MA). The negotiated prices must be offered under Medicare and MA, and may also be offered under private health insurance unless the insurer opts out.
The negotiated maximum price may not exceed 120 percent of the average price in Australia, Canada, France, Germany, Japan and the United Kingdom; or if such information is not available, 85 percent of the U.S. average manufacturer price. Drug manufacturers that fail to comply with the bill’s negotiation requirements are subject to civil and tax penalties.
The bill also makes a series of additional changes to Medicare prescription drug coverage and pricing. Among other things, the bill requires drug manufacturers to issue rebates to the CMS for covered drugs that cost $100 or more, and for which the average manufacturer price increases faster than inflation; reduces the annual out-of-pocket spending threshold; and eliminates beneficiary cost-sharing above this threshold under the Medicare prescription drug benefit.
U.S. Rep. Frank Pallone Jr., D-6th District, said: “Today, Democrats followed through on our promise to the American people to make prescription drugs more affordable. The historic Lower Drug Costs Now Act will empower Medicare to negotiate drug prices for the first time in the history of the program and makes those prices available to all Americans with insurance. The bill also reverses years of unfair price hikes and caps seniors’ out-of-pocket costs on prescription medications at $2,000 per year. This legislation will dramatically rein in costs and puts an end to the price gouging that’s been taking place at the pharmacy counter for years.”
“We then take the savings and reinvest it back into the American people with the most transformative improvements to Medicare since the program’s creation. Under H.R. 3, seniors will have access to vision, hearing and dental coverage through Medicare for the first time. We also invest in critical research to find new cures and treatments, as well as providing much-needed funding to combat the opioid crisis,” said Pallone.
U.S. Rep. Bill Pascrell Jr., D-9th District, said that the legislation was part of a commitment to take decisive action to provide lower drug costs to the American people.
“Our action today is a landmark measure for patients nationwide,” said Pascrell. “At long last Medicare will be allowed to negotiate fairer drug prices for American families. After years of being squeezed dry just to stay healthy, Medicare beneficiaries, our seniors, will save $158 billion in lower premiums and out-of-pocket costs.”
BioNJ President and CEO Debbie Hart said: “Today marks a very disappointing step in the fight to ensure that American patients have the greatest access in the world to lifesaving prescription drugs and biologics. The U.S. House of Representatives today passed H.R. 3, the Elijah Cummings Lower Drug Costs Now Act, that would decimate investment in the biopharmaceutical industry, reduce Patient access to lifesaving cures and disrupt the wildly successful Medicare Part D program.”
She added, “We can do better. BioNJ believes that every patient should have access to the right treatment at the right time. We encourage our policymakers to reject policies such as H.R. 3 and instead pursue bipartisan strategies that both reduce patient costs at the pharmacy counter and encourage investment in tomorrow’s cures.”