All Eyes Are on Congress for Lowering Drug Costs

The Trump administration's efforts to lower prescription drug prices are in trouble. Just last week, the administration abruptly withdrew its proposed rule to eliminate the safe harbor for most PBM rebates. And a judge ruled against the administration's requiring drug companies to display drug list prices in their TV ads. Now the best chance of reducing drug costs is for the Senate to pass a bipartisan package of bills, and all eyes are on them.

Last month the Senate Health, Education, Labor, and Pensions Committee passed a bill package that included measures to process access to and development of generic drugs. And also last month, the Senate Judiciary Committee passed four bills intended to reduce patent abuse by drug manufacturers-they manipulate the patent system to prolong their exclusivity for various drugs, stifle competition, and keep prices high.

But the Senate Finance Committee's proposal is more ambitious. Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR) have been working on it, although the bill has not yet been released. The Washington Post reported that "the committee is negotiating language to place an inflationary cap on Medicare Part D, which covers prescription drug plans, two Senate aides said. But some conservatives and the pharmaceutical industry have balked, arguing such a measure is akin to implementing price controls. Senators are also negotiating provisions to limit out-of-pocket expenses for catastrophic coverage in Medicare, as well as placing some sort of inflationary cap in Medicare Part B, which covers drugs administered in a doctor’s office, aides said. The legislation includes changes to Medicaid, including allowing states to finance expensive gene therapy treatments."

The provisions are excellent and will bring down drug costs. The Congressional Budget Office has estimated that the proposal will save the government and Medicare beneficiaries money. If drug manufacturers raise their drug prices above the rate of inflation, they will have to pay rebates to the government.

Grassley and Wyden want to have the Senate Finance Committee approve the bill before the August recess, so this fall it can get a full Senate vote. The proposals will still have to pass the House of Representatives, and they will probably have to pass this year. 2020 is an election year and once the campaigns start getting revved up, it is unlikely that major legislation will pass Congress.

We hope that the Senate Finance Committee's package is released soon. The ball is in their court.