The Medicare Prescription Drug Price Negotiation Act would allow for Medicare to negotiate the best possible price of prescription drugs; Current law bans Medicare from doing so
In a letter, major pro-consumer groups including Consumers Union, U.S. PIRG, Consumer Action, Consumer Federation of America, and Consumer Watchdog expressed support for Klobuchar’s bill
WASHINGTON, DC – Several major pro-consumer groups have endorsed U.S. Senator Amy Klobuchar’s legislation to lower prescription drug prices for seniors. The Medicare Prescription Drug Price Negotiation Act would allow for Medicare to negotiate the best possible price of prescription drugs. Current law bans Medicare from doing so. The legislation would help cut costs for nearly 41 million seniors enrolled in Medicare Part D and boost Medicare savings. In a letter, major pro-consumer groups including Consumers Union, U.S. PIRG, Consumer Action, Consumer Federation of America, and Consumer Watchdog expressed support for Klobuchar’s bill.
“The fact that Medicare can’t negotiate for the best possible price on prescription drugs makes no sense. It’s a bad deal for our seniors and all taxpayers,” Klobuchar said. “My legislation would harness the bargaining power of nearly 41 million seniors and allow Medicare to directly negotiate with drug companies for lower drug prices. I’ll keep fighting to ensure that our seniors can access the prescription drugs they need at the lowest possible price.”
In a letter to Klobuchar, the consumer groups wrote, “Ten-thousand seniors age into Medicare every day. The government should be allowed to represent those people in the marketplace, just as it does for veterans. Medicare’s massive volume -- 41 million enrollees -- puts the government in a strong negotiating position to obtain a good deal for Medicare plans, and for taxpayers.”
The consumer groups continued, “As Congress considers a range of proposals to address rising prescription drug costs, enacting the Medicare Prescription Drug Price Negotiation Act of 2017 is a common-sense step to improve how Medicare works for providing prescription drugs.”
Klobuchar’s legislation would allow the Secretary of Health and Human Services to directly negotiate with drug companies for price discounts for the Medicare Prescription Drug Program, eliminating the “non-interference” clause that expressly bans Medicare from negotiating for the best possible prices. The government would be able to harness the bargaining power of nearly 41 million seniors to negotiate bigger discounts than insurance companies.
Klobuchar has long championed efforts to protect consumers and lower costs by promoting competition in the healthcare system, including authoring multiple pieces of legislation that would address the high cost of prescription drugs. The bipartisan Preserve Access to Affordable Generics Act Klobuchar introduced with Senator Chuck Grassley (R-IA) would crack down on anti-competitive "pay-for-delay" deals in which brand-name pharmaceutical companies pay their generic competitors not to compete as part of a patent settlement. These pay-for-delay agreements delay consumer access to generic drugs, which can be as much as 90 percent cheaper than brand-name drugs. The legislation would stop these anti-competitive pay-off agreements in order to help make sure consumers have access to the cost saving generics they need. Klobuchar also introduced the Safe and Affordable Drugs from Canada Act with Senator John McCain (R-AZ) that would require the Food and Drug Administration to establish a personal importation program to allow individuals to import a 90-day supply of prescription drugs from an approved Canadian pharmacy. In addition, Klobuchar introduced the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act with Senators Patrick Leahy (D-VT), Chuck Grassley (R-IA), Dianne Feinstein (D-CA), and Mike Lee (R-UT). The CREATES Act would combat anticompetitive practices used by some brand-name pharmaceutical and biologic companies to block entry of lower-cost generic drugs in the marketplace.
The full text of the letter is below.
Dear Senator Klobuchar,
The undersigned consumer organizations write to express our support for S. 41, the Medicare Prescription Drug Price Negotiation Act of 2017, your legislation to help make prescription drugs more affordable for America’s seniors and also save taxpayers money.
Coping with the increasing costs for essential prescription drugs is an enormous pocketbook challenge facing American consumers, and particularly America’s seniors. A survey by AARP found that over three-quarters of Americans aged 50+ regularly take prescription medication, and more than half of seniors take four or more drugs. Medicare Part D, the segment which provides prescription drug coverage, accounts for a sixth of all Medicare spending.
Your legislation addresses a principal reason why the federal government pays more for drugs purchased for Medicare beneficiaries than purchased for veterans or under Medicaid: it is legally barred from negotiating with drug companies under Medicare, and is therefore paying more than it should.
The premiums and out-of-pocket costs seniors pay for prescription drug coverage under Medicare Part D continue to climb, with annual premiums projected to increase to $846 by 2025, with an annual deductible of $645. The federal government's share is also climbing, expected to grow faster than other parts of Medicare -- from $2,203 (in 2015) to $3,861 (in 2025) per beneficiary per year.
Seniors and taxpayers are shouldering the burden of high drug prices and high profits to drug manufacturers and other companies in the prescription drug supply chain. When the Medicare Modernization Act was passed in 2003, lawmakers were hopeful that private pharmacy benefits managers, “PBMs,” would be able to negotiate significant rebates from drug companies that could be passed along to seniors in lower prices, and in savings for the Medicare program.
But the Veterans Administration, which is able to negotiate directly, pays less than Medicare for prescription drugs.
Ten-thousand seniors age into Medicare every day. The government should be allowed to represent those people in the marketplace, just as it does for veterans. Medicare’s massive volume -- 41 million enrollees -- puts the government in a strong negotiating position to obtain a good deal for Medicare plans, and for taxpayers.
This policy change already enjoys widespread public support -- 83% according to the Kaiser Family Foundation. And we are encouraged that President Trump has also expressed support for it.
As Congress considers a range of proposals to address rising prescription drug costs, enacting the Medicare Prescription Drug Price Negotiation Act of 2017 is a common-sense step to improve how Medicare works for providing prescription drugs. In moving forward with your proposal, we urge you to consider additional steps to ensure that the savings obtained by Medicare plans are passed along to seniors, to ensure that negotiations do not lead to restrictions in the availability of essential medications to seniors, and to ensure that prices negotiated by Medicare are publicly available for use as a benchmark for other health plans negotiating with drug companies.
We applaud you and your cosponsors, Senators Richard Blumenthal, Jeanne Shaheen, Tammy Baldwin, Angus King, Sherrod Brown, Patrick Leahy, Al Franken, Tim Kaine, Maggie Hassan, Cory Booker, and Chris Murphy for your leadership on this important consumer pocketbook issue.