Grassley, Wyden Introduce Major Prescription Drug Pricing Reform to Lower Costs for Americans

WASHINGTON, July 23 -- Sen. Charles E. Grassley, R-Iowa, issued the following news release:

* * *

- Legislation Modernizes, Improves Medicare Part B, Part D and Medicaid

- Bill Saves Taxpayers More Than $100 Billion, Lowers Medicare Beneficiaries' Out-of-Pocket Costs by $27 Billion and Premiums by $5 Billion, CBO Says

- Commercial Market Also Sees Lower Costs

* * *

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) today introduced a chairman's mark, the Prescription Drug Pricing Reduction Act (PDPRA) of 2019, to lower the price of prescription drugs for Americans. The committee also announced a markup for the legislation will be held on Thursday, July 25 at 9:30 a.m. ET.

"The cost of many prescription drugs is too high. Without action, we're on an unsustainable path for taxpayers, seniors and all Americans. A working class family shouldn't have to pick between making their rent or mortgage payment and being able to afford their kids' medications. A single mother with diabetes shouldn't have to pick between groceries and insulin. A senior citizen who's paid into the system their entire life shouldn't have to cut pills in half to be able to make it to the next refill. The time to act on prescription drug prices is now," Grassley and Wyden said.

"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. 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. Similarly, 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. This legislation shows that no industry is above accountability. 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."

Congressional Budget Office (CBO) Score:

* 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.

Details of the legislation can be found below. Text of the chairman's mark can be found HERE (https://www.finance.senate.gov/imo/media/doc/FINAL%20Description%20of%20the%20Chairman's%20Mark%20for%20the%20Prescription%20Drug%20Pricing%20Reduction%20Act%20of%202019.pdf).

Medicare:

* Modernize and improve the successful Part D program by:

- Simplifying the program's design;

- Protecting beneficiaries with high costs and providing peace of mind through an on out-of-pocket spending cap;

- Improving incentives to increase negotiation between prescription drug plans and manufacturers;

- Protecting the program from rampant manufacturer drug price increases; and

Benefiting patients and taxpayers through lower government spending, premiums, and out-of-pocket costs.

* Increase transparency into pharmacy benefit manager (PBM) practices and manufacturer drug pricing decisions;

* Improve how Medicare calculates Part B prescription drug payment amounts to lower spending and beneficiary out-of-pocket costs; and

* Eliminate excess Part B drug payments that drive up beneficiary and program costs.

Medicaid:

* Increase transparency and make manufacturers more accountable to federal taxpayers;

* Allow Medicaid to pay for gene therapies for rare disease through new risk-sharing value-based agreements, which will increase access to life-saving, miracle treatments for the most vulnerable;

* Apply pressure on manufacturers to lower list prices and report more accurate calculations of their rebate obligations; and

* Prevent spread pricing and gaming in the Medicaid program by PBMs to ensure that beneficiaries, states and the federal government are getting the best deal possible.

OPEN EXECUTIVE SESSION

Notice

July 23, 2019

The Chairman wishes to inform Members that the Committee on Finance will meet in Open Executive Session on Thursday, July 25, 2019, in 215 Dirksen Senate Office Building, at 9:30 a.m., to consider an original bill entitled The Prescription Drug Pricing Reduction Act of 2019.

The Chairman requests that an electronic copy and at least 1 hardcopy of each amendment be filed with the Chief Clerk, Joshua LeVasseur in SD-210, no later than 12:00 p.m. on Wednesday, July 24, 2019.

The Congressional Budget Analysis will be distributed at a later date.

The Chairman urges every Member to attend.