WASHINGTON — A key Senate committee on Tuesday unveiled a long-awaited package of drug pricing reforms that would cap how much drug makers can hike their prices in Medicare. It would also cap out-of-pocket expenses for Medicare beneficiaries and dramatically reform the program’s prescription drug benefit.

The bipartisan effort, spearheaded by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), is projected to save the federal government $85 billion on drug spending over the next decade.

“This legislation shows that no industry is above accountability,” Wyden and Grassley wrote in a joint statement. “Passing these reforms, especially those that will affect some of the most entrenched interests in Washington, is never easy.”


The bill also tweaks other federal drug-payment approaches, including implementing a value-based system for some gene therapies under Medicaid. The bill also ups the maximum rebate allowed under Medicaid, which the committee projected would save taxpayers $15 billion.

The committee estimated the legislation would save beneficiaries $27 billion in out-of-pocket costs and an additional $5 billion in premiums in the coming 10-year period. Those savings are in addition to the $85 billion in savings the bill would generate for taxpayers.

The unveiling comes as Washington has struggled to address rising drug prices despite rising political pressure. In primary debates, Democratic candidates have excoriated the pharmaceutical industry, as has President Trump in his own speeches. But the Trump administration recently withdrew one major policy initiative and saw another struck down in court.

The result: mounting pressure on Congress, including a recent visit from health secretary Alex Azar and other top White House officials to support a potential bipartisan Senate package. Last week, Stephen Ubl, the head of the lobbying group PhRMA, visited Capitol Hill with Giovanni Caforio, the CEO of Bristol Myers-Squibb and chairman-elect of PhRMA’s board.

“While the budget office is still doing its analyses,” Wyden complained to reporters last week, “you’ve got the pharmaceutical lobby all over Capitol Hill buttonholing senators, telling them that if they do anything to hold down prices for consumers and taxpayers, that that’s going to be the end of Western civilization.”

This package, similarly, is sure to be fiercely opposed by the pharmaceutical industry. The cap on price hikes in both Medicare Part B and Part D beyond the rate of inflation is among its most controversial elements. Infighting over that provision, which was spearheaded by Wyden, delayed the bill’s release for weeks.

“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,” Ubl said in a statement. “The legislation would siphon more than $150 billion from researching and developing new medicines while giving those savings to the government, insurers and PBMs – not seniors.”

The Senate is widely expected to pass legislation that aims to lower drug costs, though it is unclear when and to what degree an eventual bill will mirror the one Grassley unveiled Tuesday.

Judd Deere, a White House spokesman, said on Twitter that the Trump administration plans to formally endorse the measure, calling it a “comprehensive package to lower outrageously high drug prices.”

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  • All that needs to happen in Washington is a full stop to Big Pharma’s lobbying. If politicians can no longer be bought, then the full-blown current corruption stops. Only then will drug prices come down. Might take half a centure, because politicians would need to re-discover morals and ethics ……

  • The Pharma lobbyists own Washington. It is blatant, obvious, rampant corruption. Until there is an end put to the disgusting, low, utterly destructive, sick political hand-outs, there is no hope whatsoever that drug pricing will come down. Because politicians can be bought by Pharma, no lofty ideas or schemes will work to bring down drug pricing. In any other country, the absence of corrupt allowances is exactly what renders drug pricing far, far lower than in the corruptable USA. The sewer stench in Washington oozing from corruptable politicians has to be eliminated. Such a major overhaul for radical improvement in attitude and morals will take another half century.

  • The deal breaker was The Trump administration “planning to formally endorse” part, which to me means it’s Shiney new sneakers for the lower-income bracket!

  • Pharma is irritated because they have bought and paid for many members in congress. It is way past time for congress to do something meaningful to control cost of prescription drugs. I have watched Pharma’s behavior for 42 years as a pharmacist. They have systematically raised prices and if following the process closely one would have to ascertain some type of collusion has been taking place for years.

  • As someone on the cusp of entering Medicare with several severe health care issues, I am keenly watching what can be done to help those of us who need help with medication that Medicare does not play nice with in the medication field. To say I am scared to death is an understatement

    • I think that they should stop penalties for not signing up for Medicare part D when I first got on Medicare…I did not have the money then and I pay for my drugs out of poket

  • Two years ago One of the provisions called for limiting annual price hikes to no more than the CPI plus 1.5%. The offset that one must be aware of is new drugs being introduced at a higher price than might be expected in order to capture the same revenue stream over the patent life if price increases are reduced. It was inappropriate for pharmaceutical companies to promise to keep price hikes at less than 10% annually.

    • First sentence should read “Two years ago I wrote an article entitled “A Three Step Cure For High Pharmaceutical Costs.”

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