A bipartisan bill aimed at lowering the cost of prescription drugs was approved Thursday in the Senate Finance Committee led by Iowa Sen. Charles Grassley.
A committee meeting spanning more than three hours ultimately gave way to a 19-9 vote in favor of the Prescription Drug Pricing Reduction Act of 2019.
The bill now is eligible for consideration before the full Senate, controlled by Grassley’s Republican Party.
“This is the moment for the Senate to act,” said Grassley, a member of the chamber since 1981. “We have jurisdiction over all of Medicare and Medicaid, so what we do here today really matters, really matters. Not only politically, when you hear about this from our constituents, but to all the people that are affected by these programs, real people.”
Of the GOP-controlled committee’s 15 Republicans, 9 voted against the bill. All 13 Democrats voted in favor of the legislation, co-sponsored by ranking member Sen. Ron Wyden, a Democrat from Oregon.
“The pharmaceutical industry is now trying to douse this proposal with a public relations tsunami,” said Wyden, warning the committee about the tactics the industry will use to try and turn senators off the bill. “Colleagues, what this is all about is deciding who is going to come first. Is it going to be the patients and taxpayers or the pharmaceutical giants who have been celebrating all the billions that they’ve gotten?”
One of the most significant provisions of the bill, Wyden said, was the “price-hike penalty for drug companies.”
“If drug makers choose to raise drug prices faster than inflation, they’re going to have to pay the difference back to Medicare,” Wyden said.
Other provisions of Grassley’s legislation include:
• Medicare Part D: The bill proposes putting a larger cost burden on insurers and pharmaceutical companies to bring down drug prices for patients; capping the out-of-pocket amount Americans pay for medication; and eliminating coverage “gaps” that increase costs.
• Medicare Part B: The bill proposes requiring “more complete and accurate reporting” so prescription drugs are priced accurately; de-incentivizing the prescription of high-cost drugs; and limiting the amount Medicare will cover so pharmaceutical companies are “forced to reevaluate what they charge.”
• Medicaid: The bill proposes allowing the program for poor and disabled Americans to pay for gene therapies for rare diseases and aims to prevent “price spreading and gaming” by Pharmacy Benefit Managers so patients, states and the federal government are fairly charged for Medicaid services.
No significant amendments were approved by the committee Thursday during debate.
A Congressional Budget Office analysis of the bill estimates Medicare patients would save $27 billion in out-of-pocket prescription drug costs over a 10-year period, in addition to the $85 billion in taxpayer savings related to Medicare expenses.
Republicans wary of the legislation largely spoke out against what they considered “price controls” on prescription drugs, a cost reduction tactic they viewed as anti-free market and potentially costly in the future.
“The inflation penalty in [Medicare] Part D is one that I have strong concerns about,” said Sen. Mike Crapo, R-Idaho. “Not only is this a problem in terms of the impact on the market-based foundation of Part D, but in my opinion, it’s going to result in higher prices for future drugs and cost-shifting to patients that’s going to be harmful to them.”
Sen. Tim Scott, R-South Carolina, voted against the bill, noting concerns it would “stifle innovation and ultimately increase the list prices [of prescriptions drugs]. Which, finally, means that while we might celebrate in the short term a reduction in prices, I think in the long term, we’ll see the exact opposite.”
Sen. Debbie Stabenow, D-Michigan, said the bill “does take positive steps,” but didn’t go far enough to lower drug costs.
Stabenow and the committee’s fellow Democrats introduced a failed amendment, based on the legislation of Minnesota Sen. Amy Klobuchar, to allow Medicare to “negotiate lower drug prices, just like every other plan does.
“This is the way to actually cut prescription drug prices,” Stabenow said.
Democrats ultimately supported the bill without their preferred amendment, but Wyden reminded Republicans the fight on the issue was not over.
“Democrats will not vote to begin floor debate on the proposal until it’s clear that amendments on two issues — preexisting conditions and negotiating power of Medicare — will get votes on the Senate floor,” he said.
By Elizabeth Meyer