- The Washington Times
Thursday, July 25, 2019

The Senate Finance Committee advanced bipartisan legislation Thursday that would force drug makers to reimburse the Medicare prescription-drug program when they raise prices faster than the rate of inflation and would cap seniors’ out-of-pocket costs.

The bill cleared the committee, 19-9, though nine Senate Republicans defected from Chairman Chuck Grassley’s effort, a sign that GOP leaders will need to fine-tune the bill to get to final passage.

“This bill is not anywhere near ready for action on the floor,” said Sen. John Cornyn, a Texas Republican who backed the bill but worried about unforeseen consequences of the inflation cap, such as higher prices for new drugs.

Conservatives who balked outright said the bill appeared to establish “price controls,” abandoning Medicare Part D’s free-market principles.

Written by Mr. Grassley and Sen. Ron Wyden, Oregon Democrat, the bill also would cap Medicare beneficiaries’ out-of-pocket costs under the Part D drug benefit at $3,100 a year, starting in 2022, and force intermediaries known as pharmacy benefit managers to reveal more information about discounts they negotiate, among other changes.

The Congressional Budget Office estimated the bill would save taxpayers $100 billion over 10 years and slash out-of-pocket costs for Medicare recipients by $27 billion.

“What we do here today really matters. Really matters not only politically, when you hear about this from our constituents, but to all the people who are affected by these programs — real people,” said Mr. Grassley, Iowa Republican.

The White House said it “applauds” the committee for advancing the bill.

“We will continue to work with senators to ensure this proposal moves forward and advances the president’s priority of lowering drug prices even further,” said deputy press secretary Judd Deere.

President Trump is pushing his own slate of drug-pricing ideas, though he has been forced to withdraw a plan that passes drug rebates directly to consumers, and the courts blocked his push to make drug makers disclose their list prices in TV ads.

Democrats say Congress and Mr. Trump should go bold and allow Medicare to negotiate prices directly. But they saw Thursday’s bill as a good step, especially since it punishes drug companies for raising prices too fast.

“What this is all about is deciding who is going to come first,” Mr. Wyden said. “Is it going to be patients and taxpayers, or the pharmaceutical giants, who’ve been celebrating all the billions that they’ve gotten?”

Conservatives on the panel said they liked aspects of the bill but couldn’t support the inflation cap.

“We worked really hard for years and years to set up a system in Part D so there’d be a market-oriented system for pricing on drugs. And it’s worked very effectively,” said Sen. Mike Crapo, Idaho Republican.

Sen. Pat Toomey, Pennsylvania Republican, called the inflation limit a “sledgehammer.” He tried remove it from the bill, though his amendment failed after Mr. Grassley and Sen. Bill Cassidy of Louisiana joined Democrats in voting against it.

The legislation split health care groups.

The health insurers’ lobby, America’s Health Insurance Plans, said the plan will “deliver real and positive change for Medicare beneficiaries,” while AARP said its main provisions will help the older Americans it represents.

The pharmaceutical lobby said there are better ways to help seniors cut costs than a bill that “imposes harmful price controls in Medicare Part D.”

The legislation “would siphon more than $150 billion from researching and developing new medicines and give those savings to the government, insurers and PBMs, instead of using those savings to lower costs for seniors at the pharmacy counter,” said the Pharmaceutical Research and Manufacturers of America.

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