The Senate Finance Committee has just introduced a bill aimed at lowering the prices paid by Medicare for pharmaceutical drugs. The Prescription Drug Pricing Reduction Act (PDPRA) of 2019, would cap out-of-pocket costs for patients on Medicare and penalise companies who raise their prices at rates higher than inflation, by forcing them to pay rebates to Medicare. The rebates would be equal to the difference between the price increase and the rate of inflation.
The bill, which was put forward by Senators Chuck Grassley and Ron Wyden, will save the government an estimated $85 billion, as well as saving beneficiaries $27 billion in out-of-pocket costs and $5 billion in premiums over ten years.
“The cost of many prescription drugs is too high. Without action, we’re on an unsustainable path for taxpayers, seniors and all Americans, said Grassley and Wyden in a statement. “We’ve been working on a bipartisan basis for more than six months to craft legislation that begins to address the broken prescription drug supply chain. This legislation shows that no industry is above accountability.”
The bill also aims to increase transparency struck around deals. “Pharmacy benefit managers and insurance companies have the opportunity to negotiate lower prices, but the American people don’t know how much these middlemen pocket for themselves,” Grassley and Wyman said.