Measure caps out-of-pocket Medicare Rx costs, requires
government negotiation of drug prices
by Dena Bunis, AARP, December 12, 2019
En español |
A landmark bill that for the first time would cap out-of-pocket prescription
drug costs for Medicare enrollees and direct the federal government to
negotiate the price of many high-cost, lifesaving medications passed the U.S.
House of Representatives on Thursday.
"This bipartisan legislation is a bold
step toward lowering prescription drug prices and out-of-pocket costs for
millions of older Americans,” says Nancy LeaMond, AARP executive vice president
and chief engagement and advocacy officer, who urged the Senate to act on its
legislation. “The president and Congress will need to work together to get this
done. Americans are desperate for relief from high prescription drug
prices."
The 230-192 vote on the Elijah E. Cummings
Lower Drug Costs Now Act was largely along party lines with all Democrats
voting yes and all but two Republicans voting no. The measure now goes to the
U.S. Senate, where lawmakers are considering their own bipartisan bill to rein
in the high cost of prescription drugs, a bill which has White House support.
Drug negotiations
The most groundbreaking feature of the
House-passed legislation would empower the Secretary of Health and Human
Services (HHS) to negotiate the price of up to 250 of the most expensive drugs
each year. The drugs subject to negotiation would not have generic
alternatives.
HHS would also be required to negotiate in the
first year the price of insulin, a medication whose cost per patient nearly
doubled from 2012 to 2016, according to House leaders. The legislation would
help lower prices for non-Medicare enrollees, lawmakers say, because commercial
insurers could take advantage of the negotiated prices. The bill the Senate
Finance Committee approved does not include the requirement for negotiation of
Medicare drug prices.
Out-of-pocket cap
The House bill would cap at $2,000 the amount
of money Part D enrollees would have to pay out-of-pocket annually for their
prescription drugs. There is no current limit on how much Medicare
beneficiaries must pay for their medications and, according to AARP research,
enrollees, on average, take four or five prescription medications each month and have
a median income of just over $26,000 a year.
Both House and Senate lawmakers say they want
to cap how much Medicare enrollees would have to pay each year for their
medications and prevent excessive price increases.
Adds benefits
The nonpartisan Congressional Budget Office
(CBO) found that the House legislation would save Medicare nearly $500 billion
over 10 years. The bill uses those savings to improve Medicare by adding some
basic dental, vision and hearing coverage for beneficiaries, benefits that
people enrolled in Original Medicare do not now receive. Some Medicare
Advantage plan enrollees have coverage for those services. CBO estimates that
even after those new benefits are paid for, HR 3 would still save Medicare $5
billion over a decade.
"AARP has long supported closing the gaps
in health coverage by including dental, hearing and vision coverage in the
Medicare program,” LeaMond said in a letter to House members before the vote. “The lack of coverage
for these important health benefits can jeopardize the health of older
Americans and drive up health care spending."
Curbs price increases
Under the House measure, drug manufacturers
that raise the prices of their medicines by more than the rate of inflation
would have to pay a rebate to the federal government. An AARP report found that
in 2017, the average annual retail price increase for brand name,
generic and specialty drugs was 4.2 percent — twice the 2.1
percent general rate of inflation that year. The average price increase for a
group of widely used brand-name drugs alone was 8.4 percent in 2017. The Senate
proposal contains a similar provision.
The House measure also boosts funding for
biomedical research at the National Institutes of Health by $10 billion over
the next 10 years to invest in innovative research, including efforts to combat
resistance to antibiotics and other threats to global health.
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