trump budget drug prices
Here's why drug prices are so high (2018)
01:45 - Source: CNN Business
Washington CNN  — 

The Senate Finance Committee Tuesday rolled out its long-awaited bipartisan plan aimed at lowering prescription drug prices.

Committee Chairman Sen. Chuck Grassley, Republican of Iowa, and Ranking Member Sen. Ron Wyden, Democrat of Oregon, are the latest congressional duo to address the problem that’s a top priority for many Americans, as well as President Donald Trump.

Bipartisan efforts to curtail rising drug costs are also moving through the Senate Health Committee, as well as in the House.

The Finance Committee bill had been stalled, but members struck a deal to allow it to proceed. It will be marked up on Thursday, but could still face a difficult path forward.

It focuses on the Medicare prescription drug program, known as Part D. Under the proposal, should some prescription drug prices increase beyond the inflation rate, pharmaceutical companies will be forced to pay money back to Medicare.

Notably, the proposal would protect seniors with high drug costs by imposing a spending cap – a first for Medicare.

It would also require pharmacy benefit managers – who serve as the middlemen between drug makers and the insurers that provide Part D plans to seniors – to disclose more about the discounts they negotiate.

The agreement comes after Trump railed against the fact that drug prices are higher in the US than in foreign countries and he has laid out a plan to combat rising prescription drug prices. Earlier this month, a federal court judge blocked one of the administration’s attempts to increase transparency in drug pricing by requiring drug prices to appear in televised advertisements. US District Judge Emit Mahta ruled that the Department of Health and Human Services would have been overstepping its authority. Mahta wrote in his ruling, “No matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized. The responsibility rests with Congress to act in the first instance.”

According to the Congressional Budget Office, the measure would save taxpayers $85 billion in Medicare costs while saving beneficiaries $27 billion in out-of-pocket costs and $5 billion in premiums.

In a joint statement, Grassley and Wyden expressed their readiness to put a check on the pharmaceutical industry.

“Pharmacy benefit managers and insurance companies have the opportunity to negotiate lower prices, but the American people don’t know how much these middlemen pocket for themselves,” Grassley and Wyden said. “This legislation shows that no industry is above accountability.”

The legislation faces opposition from the influential drug industry.

“The Senate Finance Committee package fails to meet the fundamental test of providing meaningful relief at the pharmacy counter for the vast majority of seniors,” said Stephen J. Ubl, CEO of PhRMA, the industry’s main lobbying group.

After the vote count, Majority Leader Mitch McConnell will then decide whether to bring the measure to the full Senate.