House Passes Medicare Drug Pricing Bill, Allowing HHS to Negotiate Drug Prices

Lower Prescription Drug Costs Now Act

Hospitals in rural areas to receive added help

The House of Representatives today voted 230-192 to approve the Lower Prescription Drug Costs Now Act (H.R. 3), legislation that would make changes to the Medicare program in an effort to lower prescription drug prices.

“H.R. 3 establishes a fair price drug negotiation program to reduce the cost of certain high-priced drugs without competition,” read a legislative summary. “Just like private parties negotiate to get the best possible deal, the Secretary of Health and Human Services would be empowered to negotiate up to 250 drugs per year, drawn from a refilling list of the most costly drugs (price times volume) in the U.S. without competition.”

Next year alone, medications needed by tens of millions of patients will be eligible for the negotiation process. This will include approximately half of all Medicare Part D spending.

The bill also would require drug makers to pay rebates to Medicare if their prices increase faster than inflation; cap annual out-of-pocket costs for Part D beneficiaries at $2,000; and expand access to the Part D low-income subsidy and Medicare Savings Program, among other provisions.

As amended on the floor, the bill also would create an HHS grant program to help hospitals in rural and medically underserved areas start a graduate medical education program or partner with a hospital that has an existing program. Rep. Tom O’Halleran, D-Ariz., introduced the amendment.

The Senate is not expected to vote on the legislation.

“H.R. 3 incentivizes manufacturers to stop unfair price hikes on Medicare beneficiaries by requiring them to pay a rebate back to Medicare if they increase prices faster than inflation,” the summary continued. “Year after year, drug companies have hiked the costs of drugs well above the rate of inflation, subjecting seniors to soaring prices.”  


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