Rep. Peters Announces Historic Deal to Lower Prescription Drug Prices Through the Build Back Better Act
WASHINGTON, D.C. — Today, Rep. Scott Peters (CA-52) announced a historic deal he helped broker between House Democratic Leadership, the Senate, and the White House that, if enacted as part of the Build Back Better Act, would cap what seniors pay at the pharmacy counter for the first time and would allow Medicare to directly negotiate drugs in both Parts B and D. Largely based on the drug pricing reform framework laid out in the Reduced Costs and Continued Cures Act introduced by Reps. Peters and Kurt Schrader (OR-05) and co-sponsored by Reps. Kathleen Rice (NY-04), Stephanie Murphy (FL-07), and Lou Correa (CA-46) last month, the plan also applies inflation rebates and price increase limits to both Medicare and private insurance markets and closes loopholes in the health care system that will reduce costs paid by private insurers.
“Americans absolutely need better, cheaper access to quality prescription drugs; that’s why it’s critical that we include drug pricing reform in the Build Back Better Act and that we do it in a way that can earn support in both chambers. We believe we’ve reached a resolution that everyone can get behind. Our compromise deal accomplishes my goal of establishing the first-ever out-of-pocket cap for seniors’ prescriptions, pays for these benefits using pharma profits, and generates billions in savings to the federal government that can be invested in improving other health care programs. It addresses loopholes in the system to allow for greater competition which will lead to lower drug costs for all consumers. It does all of this, and more, without stifling the discovery of future cures and ceding America’s scientific leadership to China or other countries,” said Rep. Peters. “I’m grateful to my colleagues, Reps. Schrader, Rice, Murphy, Correa and Sen. Sinema for standing with me in this fight to protect American science and the nearly 1,000 companies in my district who do this important, life-saving work. I also thank the White House, Speaker Pelosi and Chairman Pallone for hearing our concerns and working with us to forge a plan that keeps the promise Democrats made to allow Medicare to negotiate lower drug prices. This is an historic achievement for the country.”
Key elements of the compromise deal announced by Rep. Peters and others today:
Adds Medicare Part D to the Peters, Schrader framework, allowing negotiation of drug costs in Parts B and D for some drugs older than 9 years and others older than 12 years.
Caps out-of-pocket costs for all seniors to $2,000 per year and includes a “smoothing” mechanism that allows seniors to pay their out-of-pocket expenses throughout the calendar year via monthly installments over the course of a calendar year instead of all at once.
Establishes a $35 out-of-pocket maximum for insulin.
Caps the amount drug manufacturers can raise the price of a drug to the rate of inflation for drugs in Medicare Parts B and D beginning Oct. 1, 2021. This inflation cap also applies to private insurance markets.
Increases transparency by establishing reporting requirements for Pharmacy Benefits Managers (PBMs) – the corporate middlemen between drug manufacturers and payors – so private plans know the true cost of drugs and price concessions can be passed on to consumers.
Promotes lower-cost options, such as generics, by incentivizing and bolstering competition in the marketplace.
“I have been fighting for meaningful reforms to lower prescription drug prices throughout my time in Congress that have the broad support needed to pass both the House and Senate. Securing our framework for negotiating drug prices in Medicare in the Build Back Better Act has led to a historic agreement that allows Medicare to finally rein in rapidly escalating prescription drug prices for Oregonians, especially our seniors,” Rep. Schrader said. “Our proposal limits price increases on drugs that have been on the market for years to the price of inflation, caps seniors’ out-of-pocket costs to $2,000 annually, which can be paid over the course of the year; and caps insulin to no more than $35 per month. It also exposes other problems and bad actors that have played a role in the unfair escalation of prescription drug costs. All of this will bring huge financial relief to American consumers and taxpayers, without stifling industry innovations that may lead to groundbreaking medications and cures. I am honored to have worked with my colleagues Reps. Peters, Rice and Murphy and Senator Sinema to deliver these lifechanging policies that will ensure a better health care system for everyone.”
“I am proud we have reached an agreement on provisions that allow Medicare to negotiate drug prices in Parts B and D, limit the ability of drug companies to raise their prices faster than inflation, and set caps on out-of-pocket costs for seniors and insulin co-pays,” said Rep. Rice. “This historic agreement represents a major breakthrough in negotiations on provisions that can pass in both chambers of Congress and finally lower the outrageous cost of prescription drugs for New Yorkers at the pharmacy counter.”
“I am pleased that our good-faith negotiations with the White House and congressional leadership have resulted in a historic agreement, which will reduce the price of prescription drugs for Americans, especially seniors,” said Rep. Murphy. “At the same time, it will ensure that our world-class scientists and researchers can continue to develop medicines that save, extend, and improve lives.”