House Democrats pass broad prescription drug price bill as election marker

The Democrats’ effort, which became broader as it made its way through committees, has spooked the pharmaceutical industry, which is vehemently opposed to the legislation and has said it would stifle innovation.

A Congressional Budget Office estimate showed the bill, H.R. 3, and called the Elijah E. Cummings Lower Drug Costs Now Act after the late Democratic congressman, would save the government $456 billion between 2020 and 2029, and would result in eight fewer new drugs coming to market over the next decade. Some Democrats have argued the bill would simply result in fewer “copycat” drugs — that is, similar versions of existing drugs — rather than prevent development of new, innovative drugs, but drug lobbyists argue the worst damage would extend beyond the first decade of the law’s implementation.

“The American people are fed up with paying three, four or 10 times more than people in other countries for the exact same drug,” said Democratic Rep. Frank Pallone Jr., chairman of the Energy and Commerce Committee. “I now hope Senator McConnell will follow through on President Trump’s repeated promises to ‘negotiate like crazy’ and take up this bill. We cannot afford to wait.”

But Trump backed off the Pelosi’s proposal in recent weeks, saying Congress should focus its efforts on a bipartisan Senate Finance Committee proposal from Chairman Charles E. Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., that would cap price increases in Medicare to the rate of inflation and limit seniors’ out-of-pocket costs in Medicare. That bill is also unlikely to be signed into law — Senate Leader Mitch McConnell, R-Ky, told the White House he is unwilling to bring up a bill that splits his caucus, and several Republicans have said the measure is akin to imposing price controls, which they have long opposed.

The House bill would require the Health and Human Services secretary to negotiate the prices of up to 250 drugs in Medicare each year that do not have competitors, and would impose severe financial penalties on drug companies that failed to come to an agreement. The negotiated prices would be available to those covered by private insurance, not just Medicare beneficiaries. The bill also establishes an international pricing index that would ensure U.S. consumers do not pay more than beneficiaries in other countries, where prices are often lower because their governments directly negotiate prices. That is similar to a more limited proposal by the Trump administration, which making its way through the rulemaking process but which has been stalled amid technical and regulatory issues and Trump’s own changing demands.

The CBO also found that the House bill would lower health insurance costs for employers and increase federal revenue by about $45 billion because employer insurance premiums would decline, and those savings would manifest in increased taxable wages and salaries.

Progressives had threatened to derail the effort earlier this week over complaints that the bill did not go far enough, but Pelosi managed to hold her party together. Republicans railed against the bill, declaring it a socialist proposal that would threaten innovation. Days ahead of Thursday’s vote, they introduced their own drug pricing proposal, which Pelosi and Democrats dismissed as too incremental.

“Our plan to lower out of pocket spending and protect access to new medicines and cures is not controversial,” four top House Republicans said in a statement. “The American people need relief and we ought to deliver it by moving forward with legislation that can actually be signed into law.”

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