Letting Medicare negotiate drug prices would save $ 290 billion
The Congressional Budget Office said that a pending proposal by Senate Democrats to allow Medicare to negotiate directly with pharmaceutical companies for lower prices would generate nearly $ 290 billion in savings and new revenue over ten years of implementation, a predictable but crucial finding as lawmakers try to revitalize a legislative deal in the coming weeks.
The Democratic effort to revitalize a broader reconciliation package that could be passed in the tightly divided Senate without Republican votes is considered the best that can be achieved after Senators Joe Manchin and Kyrsten Sinema sank the much larger plan Build Back Better, one that included radical climate provisions and other social investments, last year.
“Big Pharma has been making money with tricks and abuse for years while consumers have suffered the consequences.”
Now, with Schumer negotiating directly with Manchin over the narrower package, hopes of getting at least Medicare’s ability to better control the outrageous drug prices imposed on those enrolled by pharmaceutical giants would be considered a victory.
According to the CBO, which based its analysis on a draft text published by the Senate Budget Committee, the legislation now being considered “would produce a net decrease in the unified deficit by a total of $ 287.6 billion during the This decrease in deficit would result from a decrease in direct spending of $ 249.2 billion and an increase in revenue of $ 38.4 billion.
Senate Majority Leader Chuck Schumer welcomed the budget office’s score as a finding that reinforces the push to give that authority to Medicare.
“This CBO score shows that enabling the negotiation of Medicare prescription drugs will generate billions of smart savings for Americans annually and provide much-needed relief for millions of seniors,” Schumer said in a communiqué.
“Fixing the inaccessible prices of prescription drugs has been a major problem for Americans and the vast majority of both Democrats and Republicans year after year,” the New York Democrat added. “By enabling Medicare to directly negotiate the prices of prescription drugs, Congress can end the days of seniors losing lives that saved lives because they can’t afford them, reducing costs for millions of patients when they visit the pharmacy, and to do so in a fiscally responsible manner. ”
The Democrats’ proposal would allow Medicare to negotiate discounts for some of the most expensive drugs on the market and impose punishments on pharmaceutical companies that raise prices faster than inflation. The legislation would also limit annual out-of-pocket costs to $ 2,000 for Medicare beneficiaries. Although initially only a specific set of drugs would be allowed under the plan, starting with 10 of the most expensive in 2026, that number would increase to 20 drugs by the end of the decade.
Axios reported earlier this week that if an agreement can be finalized within the Democratic Senate caucus, a possible vote on the package could come in August.
Commenting on the importance of the drug pricing provisions, Frederick Isasi, executive director of health advocacy group Families USA, said it was vital that Democrats push for the deal, regardless of Republican opposition and mass lobbying. of Big Pharma.
“Senators need to take advantage of this historic moment and get a significant overhaul of prescription drugs at the goal,” Isasi said. “When too many families in the United States are struggling with the high costs of everything from housing to gas, we have the opportunity to make a historic breakthrough in the prescription drug negotiation and make Medicare work better for people and families across the country. ”
“Big Pharma has been making money with tricks and abuse for years while consumers have suffered the consequences,” he added. “Now is the time for Congress to take this legislation to the goal and provide affordable health care to all of our families across the country.”