The Senate Finance Committee’s highest-ranking members are pushing legislation to restrain drug-price increases by placing some caps on out-of-pocket spending in the federal Medicare program.
Committee Chairman Sen. Chuck Grassley (R., Iowa) and ranking member Ron Wyden (D., Ore.) said their bill could save the government $85 billion on the Medicare program over 10 years, based on a Congressional Budget Office Analysis.
The budget office analysis also said that Medicare beneficiaries could save $27 billion in out-of-pocket costs over the same ten-year period, as well as another $5 billion in federal Medicare premiums.
The bill generally would cap Americans’ drug costs at a fixed level in the Medicare drug-benefit program called Part D. It also would cap the growth of government subsidies in the program at the consumer inflation rate.
The legislation is among an array of competing proposals offered by various members of Congress and by the Trump administration. Sen. Grassley’s office said he is seeking the Republican administration’s support for this legislation. Drug prices are already at the center of the 2020 presidential election, and promise to remain so.
This bill, if it gains sufficient congressional support, is among those that could have the greatest impact on prices, but it is expected to be opposed by the drug industry.
PhRMA, which represents the drug industry in Washington, didn’t immediately respond to requests for comment on the legislation.
Aaron S. Kesselheim, a Harvard medical professor who has been prominent in U.S. drug-safety and pricing issues, called the bill “an important step forward.”
“Caps on price increases for drugs could be significant,” he said. “It does not seem reasonable that pharmaceutical manufacturers should have carte blanche to raise prices each year based on what the market will bear without bringing any relevant new information to the market about the value of the drug.”
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