Senators unveil plan to lower drug costs for seniors

Washington -- (AP) Two senior senators ,a Republican and a Democrat, unveiled compromise legislation Tuesday to reduce prescription drug costs for millions of Medicare recipients, while saving money for federal and state health care programs that serve seniors and low-income people.

Iowa Republican Charles Grassley and Oregon Democrat Ron Wyden said the bill would for the first time limit drug copays for people with Medicare’s “Part D” prescription plan , by capping patients’ out-of-pocket costs at $3,100 a year starting in 2022. They’re hoping to soon have it ready for votes on the Senate floor.The bill would also require drugmakers to pay a price hike penalty to Medicare if the cost of their medications goes up faster than inflation. Drugs purchased through a pharmacy as well as those administered in doctors’ offices would be covered by the new inflation rebates.

The senators said preliminary estimates from the Congressional Budget Office show that the Medicare program would save $85 billion over 10 years, while seniors would save $27 billion in out-of-pocket costs over the same period, and $5 billion from slightly lower premiums. The government would save $15 billion from projected Medicaid costs.
CBO also projected that Medicare’s inflation rebate would have ripple effects, leading to prescription drug savings for private insurance plans sponsored by employers or purchased directly by consumers.
The senators announced a Thursday vote on the package by the Finance Committee, which oversees Medicare and Medicaid. Grassley is the panel’s chairman, while Wyden serves as the senior Democrat.
“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,” Grassley and Wyden said in a joint statement. “This legislation shows that no industry is above accountability.”
The White House encouraged the Senate negotiations, but Democrats controlling the House want to go farther by granting Medicare legal authority to directly negotiate prices with pharmaceutical companies. Direct negotiations are seen as a nonstarter in the Republican-controlled Senate, but the bill’s drug price inflation penalty may yet find support among Democrats in the House.
 
 

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