Reed Leads Push to Lower Rx Drug Prices & Says U.S. Senate Should Pass Historic Reform Allowing Medicare to Negotiate Discounts
Health experts & advocates for older Americans highlight how allowing Medicare to negotiate directly with drug companies for lower Rx drug prices will benefit taxpayers, retirees, and working families
PROVIDENCE, RI – Prescription drugs are made to help people live longer, healthier lives, but medicine only works if patients can access and afford it. Unfortunately, due to drug price hikes, more Rhode Islanders are unable to afford the prescription drugs they need to stay healthy and out of the hospital.
Today, U.S. Senator Jack Reed joined health experts and advocates for older Americans at the Providence Community Health Center to call for historic drug pricing reform. Senator Reed outlined how pending legislation would help Rhode Islanders save on health care costs by empowering Medicare to negotiate lower drug prices, capping out-of-pocket prescription drug costs, and limiting pharmaceutical price increases to the rate of inflation.
“We can’t let the cost of prescription drugs continue to be a barrier to good health. For too long, the pharmaceutical industry has overcharged Americans and dictated sky-high prices for life-saving prescription drugs that people rely on,” said Senator Reed. “The federal government must take needed steps – including granting Medicare the authority to negotiate prescription drug prices – in order to lower costs for hardworking American families and seniors. Letting Medicare negotiate so it can pass savings on to taxpayers and seniors is smart policy. We are on the verge of passing historic reforms to hold drug companies accountable and lower the cost of health care for everyone, which will help save lives and taxpayer dollars.”
There are about 48 million Americans, including about 75,000 Rhode Islanders, enrolled in Medicare Part D, Medicare’s prescription drug plan.
The U.S. has the highest total drug expenditure and costliest pharmaceutical spending per capita among developed countries, with Americans paying more than three times what people in other countries pay for the same medicines.
According to research in the Journal of the American Medical Association, the launch prices of new brand-name drugs has increased by nearly 11 percent every year from 2008 through 2021.
To change the unaffordable trajectory of prescription drug pricing in America, Senator Reed is backing an action plan to bring down the cost of prescription drugs, cap out-of-pocket expenses, and make sure millions of Americans do not see their premiums go up in the coming months.
Senator Reed says if this reconciliation bill passes, Medicare will finally have the power to negotiate for lower drug prices and all Americans will be better protected against outrageous and arbitrary price increases.
Senator Reed has long advocated to require Medicare to negotiate drug prices, cap beneficiary out-of-pocket Part D drug costs at $2,000 a year, and penalize drug manufacturers for price hikes that outpace inflation.
According to the nonpartisan Congressional Budget Office (CBO), these measures would save taxpayers $288 billion over the coming decade, chiefly because the government would pay less for pharmaceuticals.
“Allowing the federal government to negotiate for lower prices is a no brainer. We know it works because the Department of Veterans’ Affairs already does it, and it saves veterans and taxpayers billions of dollars. In fact, the prices the VA pays for prescription drugs are roughly half the amount of prices paid by Medicare Part D for the same products -- the very same prescription drugs. So we need to allow Medicare to use its purchasing power to negotiate with drug companies,” said Reed.
The federal government provides significant tax breaks for drug companies and funds basic biomedical research that delivers a scientific foundation for the development of new drugs by private industry, but taxpayers do not share in the profits when private companies bring impactful new drugs to market. Moreover, studies show that big drug companies spend more advertising and selling products than investing in research and development (R&D). The American Medical Association (AMA) has called for a ban on direct-to-consumer ads, arguing that the billions of dollars drug companies spend on marketing pushes prices higher for consumers and inflates demand for new, more expensive, and potentially unnecessarily prescribed drugs.
The U.S. Senate’s budget reconciliation process, which avoids the Senate’s 60-vote threshold to advance major legislation, is complicated and requires sign-off from the Senate Parliamentarian, who is currently reviewing the legislative package to ensure it doesn’t break a lengthy list of procedural or parliamentary rules. If the Senate Parliamentarian gives her stamp of approval to the measure then the entire package goes to the full U.S. Senate for consideration, debate, amendments, and a final vote. Under Senate reconciliation rules, the minority party is allowed to put forward as many amendments as members want, and floor votes take place around the clock on those provisions in what is known as a ‘vote-a-rama.’
According to a recent Kaiser Family Foundation survey, about half of all respondents reported delaying or going without health care in the past year due to costs. Additionally, nearly one-third of households -- including 43 percent of those with annual incomes under $40,000 – declined to fill a prescription or skipped doses due to affordability concerns.
While the comprehensive prescription drug reform bill -- the largest and most consequential health care reform bill since the Affordable Care Act -- is closer than ever to passing, Senate Republican leaders and the pharmaceutical industry are actively opposed. According to OpenSecrets, Big Pharma has already spent over $101 million on lobbyists in 2022 to fight Democratic efforts to rein in prescription drug costs. That is double the amount of spending on lobbying compared to the next largest industry