Pelosi Unveils Bill to Lower Prescription Drug Prices

House Speaker Nancy Pelosi unveiled her plan to lower drug prices by giving the government the ability to negotiate prices for up to 250 of the costliest drugs, including insulin; slapping pharmaceutical companies with penalties if they refuse to negotiate; and seeking Medicare rebates from drug makers if they raise prices beyond inflation.

The bill comes as Americans across party lines say lowering prescription drug costs should be a top priority for Congress this year; a poll earlier this month from the Kaiser Family Foundation found that 70% called it a top priority.

At a press conference, both Pelosi, D-California, and Rep. Frank Pallone, D-New Jersey, chair of the House Energy and Commerce (E&C) Committee, both expressed hope that the bill would garner buy-in from the White House. The bill will be heard in a subcommittee meeting of E&C on Wednesday, September 25.

President Donald Trump made prescription drug costs a centerpiece of his 2016 campaign and appears eager to do something, but most Republicans oppose the idea of Medicare negotiations on drug pricing.

“This is a new day when it comes to lowering drug prices now,” Pelosi said. Her proposal, which was leaked earlier this month, would:

• Authorize Medicare to negotiate prices for up to 250 of the most costly drugs a year, including both Part D and Part B. The maximum price would be determined using a blend of international prices, similar to a more limited proposal from the Trump administration. Insulin would be included. Drug companies that refuse would face penalties that start at 65% of sales for the drug at issue and would escalate if they hold out; The New York Times noted that is even stiffer than what was proposed in the draft.
• Require drugmakers to pay rebates to Medicare if they hike their prices beyond the increase in inflation. The Associated Press reported that idea resembles a bipartisan plan from Senators Chuck Grassley, R-Iowa, and Ron Wyden, D-Oregon. The senators’ proposal has already cleared a key committee, with Trump’s support. But many Senate Republicans oppose inflation rebates, and it’s unclear what Majority Leader Mitch McConnell, R-Kentucky, plans to do next.
• Cap what seniors pay out of pocket for their medications to $2000 a year. An OOP limit also is part of the Grassley-Wyden bill, and the idea also is backed by the Trump administration.

The goal is to have the legislation introduced and moved through House committees to a vote on the floor. If compromise can be reached among House Democrats, the Trump White House, and enough GOP lawmakers, a drug pricing package could be added to year-end budget legislation.

The AP said the Commerce Department’s inflation index for prescription drug prices has declined in 7 of the last 8 months, which is highly unusual. That index includes lower-cost generic drugs.

But the AP’s own analysis of brand-name drugs shows that on average prices are still going up but at a slower pace. The AP analysis found that in the first 7 months of 2019, drug makers raised list prices for brand name medicines by a median, or midpoint, of 5%.That does reflect a slowdown. Prices were going up 9% or 10% over those months in the prior 4 years. However, there were 37 price increases for every decrease in the first 7 months of 2019.

The House Republicans on the E&C committee, led by Rep. Greg Walden, R-Oregon, quickly accused Pelosi of putting “politics over progress,” calling her plan “a socialist proposal to appease her most extreme members.”

In a statement, Matt Eyles, president and chief executive officer of America’s Health Insurance Plans (AHIP), praised the proposal. "This legislation advances several key proposals that have bipartisan support, such as out of pocket limits for seniors and ensuring manufacturers have meaningful accountability for their prices and price increases. We encourage legislators to advance efforts that will reduce drug prices across the entire health care system—not just shifting costs to consumers, employers and taxpayers–while retaining the ability of health insurance providers to use market-based tools and private-sector negotiations to reduce the net price of drugs."