Prescription drug prices may soon come down after the Senate earlier this week approved a bill to cap out-of-pocket costs for Medicare Part D beneficiaries.
Drug costs for Medicare participants would cap out at $3,100 a year and save the program $100 billion over a 10 years. The approval passed by a 19-9 bipartisan vote in the Senate Finance Committee.
The bill changes the financing structure of Medicare Part D to permanently eliminate the coverage gap. It also requires pharmaceutical companies and insurance plans to pay the lion’s share of the cost of prescriptions for patients whose annual drug bills are the highest.
The bill removes the 5 percent share of a drug’s cost that a Medicare beneficiary currently must pay if their annual prescription charges are above their ability to pay.
And, most importantly, the bill also requires drug manufacturers to pay a rebate to Medicare if they raise prices more than the rate of inflation. In the latest analysis, the average annual price increases for brand-name drugs have exceeded the rate of inflation every year since at least 2006.
Prescription Drug Prices: Measure Now Goes To The House
According to the Congressional Budget Office, over 10 years the Senate approved measure saves Medicare beneficiaries $27 billion in out-of-pocket costs and $5 billion in premiums.
One provision that was voted down was allowing Medicare to directly negotiate drug prices. This would bring drug costs down even more.
This measure now goes to the full Senate, where lawmakers made it very clear there would likely be more changes even before the bill reaches a floor vote.
The White House fully supports the proposal. Indeed, President Trump has repeatedly said he wants to see action to lower prescription drug prices. Senior citizens as well as younger people on fixed incomes find it difficult to keep paying for escalating drug costs.
Stay tuned for further developments.