Senate Finance pushes ahead on plan to address high drug prices

The Senate Finance Committee on Tuesday unveiled a sweeping legislative package to address high prescription drug prices with an eye toward bringing it up for a full Senate vote by the fall.

The draft comes after Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) struck a deal on a series of policy changes and Republican committee members met Monday night to review details.

The draft would overhaul parts of Medicare and Medicaid, and it includes a controversial provision pushed by Wyden that would crack down on drugmakers that raise prices higher than the rate of inflation.

The Congressional Budget Office estimates that the draft’s restructuring of the Medicare Part D prescription drug benefit and Wyden’s provision, which would require drugmakers to pay rebates to Medicare if they hike prices over inflation, would lower government spending by $85 billion over 10 years. The Wyden language alone accounts for $50 billion of savings. It would pertain only to brand-name drugs and not generics, Grassley’s office said.

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.

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 — to health plans and drugmakers rather than the government.

The Medicaid changes include a ban on spread pricing — a practice in which middlemen in the drug supply chain pad profits by reimbursing pharmacies at a lower rate while health insurers are charged more — and provisions to pay for gene therapies over time through risk-sharing agreements, which are projected to save $15 billion in government spending.

The committee plans to mark up the package Thursday. However, the legislation could still face significant push back from Republicans and Democrats. Several Finance Committee Republicans in recent weeks worried that Wyden’s provision amounted to excessive government meddling into the prescription drug market. Some likened the move to price controls.

Democrats, meanwhile, will likely try to attach proposals to the legislation that would empower Medicare to directly negotiate drug prices or allow the government to import medicines from abroad — both major progressive priorities.

Trump administration officials have worked closely with the committee in hopes of striking a drug pricing deal, after deciding earlier this month to abandon a major regulatory effort that would have effectively eliminated rebates from government drug plans.

Article originally published on POLITICO Magazine

Source: https://www.politico.com/story/2019/07/23/senate-drug-prices-1611959
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