The US Senate Finance Committee advanced bi-partisan, compromise drug cost legislation on Thursday, despite opposition from a majority of the committee’s Republican members. The bill, sponsored by Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Oregon), aims to reduce prescription drug costs for Medicare recipients with “Part D” prescription coverage, while also providing savings for state and federal health programs for seniors and low income individuals.
The Grassley-Wyden proposal caps Medicare Part D patients’ out-of-pocket expenses at $3,100 a year starting in 2022, and requires pharmaceutical companies to pay a penalty to Medicare if cost increases for their medications outpace inflation. It does not include a cap on out-of-pocket costs for the popular Medicare prescription benefit, leaving patients taking very expensive drugs to bear for 5% of the cost, with no limit on what they pay.
The senators said preliminary estimates from the Congressional Budget Office (CBO) show that the Medicare program would save $85 billion over 10 years, while seniors would save $27 billion in out-of-pocket costs over the same period, and $5 billion from slightly lower premiums. The government would save $15 billion from projected Medicaid costs, and individuals with private insurance should also see some savings, according to the CBO.