Senate Finance Committee’s Rx drug pricing proposal draws mixed reviews
Senate Finance Committee chairman Chuck Grassley, R-Iowa and ranking member Ron Wyden, D-Ore. on Tuesday introduced a chairman’s markup, the Prescription Drug Pricing Reduction Act of 2019, to lower the price of prescription drugs for Americans.
“The bipartisan proposal from Senate Finance takes meaningful steps to increase access and reduce the cost of prescription drugs for America's patients. We appreciate the recognition by chairman Grassley and ranking member Wyden of the value provided by generics and biosimilars to the nearly 60 million seniors in Medicare," the Association for Accessible Medicines said in a statement.
“This legislation is a step in the right direction and we look forward to working with the chairman and ranking member to address the misaligned incentives that are preventing Medicare’s seniors from benefitting fully from the record-level number of FDA approvals of generic and biosimilar medicines. Last year, generics saved seniors $90 billion in Medicare, yet at least $9 billion more in biosimilar and generic savings went unrealized,” AAM president and CEO Chip Davis said.
AAM said the proposed bill is expected to provide the following savings:
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.
While AAM received the legislation warmly, the Pharmaceutical Research and Manufacturers of America was less pleased with the bill's proposals.
“The Senate Finance Committee legislation is the wrong approach to lowering drug prices. It would siphon more than $150 billion from researching and developing new medicines and give those savings to the government, insurers and PBMs, instead of using those savings to lower costs for seniors at the pharmacy counter," the organization said in a statement. "For example, while the bill establishes an out-of-pocket cap, according to MedPAC it will only benefit 2% of Medicare patients starting in 2022. It also fails to ensure the deep discounts negotiated in the Medicare prescription drug program are passed along to patients in the form of lower out-of-pocket costs. And it replaces the successful, market-based structure of Medicare Part D with Medicaid-style price controls that result in money going to the Federal treasury instead of seniors."
PhRMA also said CEO Steve Ubl and representatives from member companies met with President Donald Trump where they discussed the organization's desire for policies that will help save patients money at the pharmacy counter while underscoring its opposition to the Senate Finance Committee legislation "because it fails to achieve this shared goal and imposes harmful price controls in Medicare Part D."
Grassley and Wyden said they had been working for months to create bipartisan legislation that address the prescription drug supply chain.
"Pharmaceutical companies play a vital role in creating new and innovative medicines that save and improve the quality of millions of American lives, but that doesn’t help Americans who can’t afford them," the lawmakers said. "Passing these reforms, especially those that will affect some of the most entrenched interests in Washington, is never easy. But Americans are demanding action and reform is long overdue. We’re looking forward to working with our colleagues on the Finance Committee and with other committees in Congress to pass this prescription drug pricing overhaul very soon.”