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Hope for Lower Drug Costs Lies in Two Key Congressional Bills

H.R. 3, The Lower Drug Costs Now Act of 2019, would remove a prohibition against negotiating maximum prices for insulin products and at least 25 other brand name drugs.
H.R. 3, The Lower Drug Costs Now Act of 2019, would remove a prohibition against negotiating maximum prices for insulin products and at least 25 other brand name drugs. (Photo:www.ccPixs.com)

Two bills attempting to lower prescription drug costs are making progress in Congress and show promising signs of bipartisan support.

Americans pay exponentially more for prescription drugs than citizens of other developed countries, and spending on pharmaceuticals accounts for a significant portion of Americans’ health care costs each year. Finding a way to bring down prices on some of the most common drugs and bring U.S. drug prices more in line with other countries has become an urgent issue for many Americans, and two bills to achieve those goals are making progress through Congress.

The Lower Drug Costs Now Act 2019

The U.S. Government spends billions a year on prescription drugs through Medicare and Medicaid, but currently, the law prohibits the Centers for Medicaid & Medicare Services (CMS) from negotiating drug prices with pharmaceutical companies. H.R. 3 The Lower Drug Costs Now Act of 2019 would remove the prohibition and require the CMS to negotiate maximum prices for insulin products and at least 25 other brand name drugs.

Whatever new prices the CMS is able to negotiate for these drugs will have to be offered under Medicare and Medicaid, and under private insurance, unless the insurer opts out. H.R. 3 also caps the negotiated price at “120% of the average price in Australia, Canada, France, Germany, Japan, and the United Kingdom.”

Drug prices in the U.S. have been increasing across the board in recent years, even for drugs that have not been reformulated. In 2009, the price for 10 ml of insulin was just under $100, and today the same quantity of the same insulin is closer to $300. Insulin costs a fraction of this in Canada and other developed countries. There has been some political and public pressure on drug manufacturers in recent years to reduce the prices of certain drugs, but so far no legislative action has addressed the issue in a comprehensive way.

House Speaker Nancy Pelosi and other Democratic Lawmakers have been working on H.R. 3 for several months and introduced it in September. On October 11, the Congressional Budget Office (CBO) announced that the bill would save Medicare $345 billion between 2023 and 2026.

The House Committee on Energy and Commerce passed the bill on October 17, but it has two more Committees to get through in the House before being put to a floor vote. It’s been moving quickly so far, and if it continues to get pushed by its proponents, it could be on the floor by November.

The Prescription Drug Pricing Reduction Act of 2019

The Senate bill attempting to address the same issue, S. 2543 the Prescription Drug Pricing Reduction Act of 2019, was also introduced in September. This measure hasn’t been moving quite as quickly as H.R. 3, won’t have as big of an impact on drug prices and is considerably more confusing, but may stand a better chance of passing.

S. 2543 is a bipartisan measure introduced by Senator Chuck Grassley, R-La., and Senator Ron Wyden, D-Or. The bill would mainly make changes to Medicare Part D. In a joint editorial in Bloomberg describing the bill, the Senators discussed the complex structure of Part D and explained, “Our legislation would simplify this structure. Beneficiaries’ out-of-pocket expenses would be capped at $3,100 annually.” The bill would also change how pharmaceutical companies report average sales, “improve transparency related to pharmaceutical prices and transactions” and make changes to Medicaid.

While these steps would certainly make a big difference for Medicare users, it’s less clear how this would benefit Americans who use private insurance. The CBO hasn’t released an analysis of S. 2543 yet, but it seems that in most cases, this bill wouldn’t bring down prices as much or save taxpayers as much as H.R. 3.

Will the Bills be Approved?

S. 2543 has more bipartisan support as of now, and is seen by some as a middle ground. Opponents are categorizing H.R. 3 as an attempt at price controls, and even if it races through the house, it will face some serious hurdles in the Senate.

In September, Senate Majority Leader Mitch McConnell said that Pelosi’s bill H.R. 3 would not pass the Senate and the CBO’s recent report on how much money it would save the Government has not seemed to inspire any new Republican backers to come forward. But Grassley and Wyden’s bill also has some Republican opponents and may not do enough for enough people to gain wide support in the Democratic-controlled House.

Prescription prices impact Americans of all demographics and all political persuasions, and next year is an election, so there is pressure on lawmakers from both sides to take action.

President Trump even weighed in positively on both measures in September, tweeting, “I like Sen. Grassley’s drug pricing bill very much, and it’s great to see Speaker Pelosi’s bill today. Let’s get it done in a bipartisan way!” Relations between the President and the Speaker have gone downhill somewhat since then, but there is still hope that some type of bipartisan solution may be reached by the end of the year that could bring down drug prices.

For the millions of Americans shelling out hundreds or thousands of dollars a month on prescriptions, relief can’t come soon enough.

Alexis Chapman

Alexis Chapman is a freelance political consultant and writer. She is also a Senior Fellow at the Cape Institute and currently serves as Grassroots Director of the Hawaii Food Industry Association. She holds a Master of International Studies Degree from the Government Department of the Faculty of Business and Economics at the University of Sydney, and a Bachelor’s in Philosophy from Green Mountain College. Chapman specializes in policy analysis, strategic policy analysis, and food legislation at the local, state, national, and international level. She has worked in Australia, West Africa, and around the U.S. in New England, Texas, and Hawaii.

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