The measure would also save seniors $27 billion in out-of-pocket costs over that period and $5 billion from slightly lower premiums, according to the CBO.
The White House endorsed the proposal and said it would build support among senators. President Trump has made lowering drug prices a top priority headed into his 2020 reelection campaign and is eager to strike a deal with Congress that he can tout on the campaign trail.
“We will work with senators to ensure this proposal moves forward and advances the president’s priority of lowering drug prices even further and increasing transparency in health care for the benefit of all Americans,” White House spokesman Judd Deere said on Twitter.
The House plans to unveil its own drug pricing proposal in September, Wendell Primus, top health aide to Speaker Nancy Pelosi (D-Calif.), said Monday.
That bill will be drastically different from the Senate proposal because it would allow Medicare to negotiate the prices of some drugs — currently prohibited by law — and is unlikely to receive Republican support. It is unclear whether House leadership is willing to take up the more modest Senate proposal or whether House Democrats will want to pass their own, more progressive legislation to campaign on.
The Grassley-Wyden bill would cap out-of-pocket costs for those receiving Medicare’s prescription drug benefit, called Part D, at $3,100 a year starting in 2022, while limiting drug price increases to the rate of inflation. Drugmakers that raise their prices faster than the rate of inflation would have to pay a rebate to the federal government.
The bill also limits price increases in Medicare Part B, which covers expensive physician-administered drugs for cancer, dialysis and other illnesses.
The CBO also said the Grassley-Wyden proposal would lower prescription drug costs in the commercial market.
Health insurers support the proposal, but it faces an uphill battle with opposition from drugmakers and powerful conservative groups, which said elements of the proposal that limit price increases are akin to price controls.
“The legislation would siphon more than $150 billion from researching and developing new medicines, while giving those savings to the government, insurers and [pharmacy benefit managers] — not seniors,” Stephen Ubl, president and chief executive of PhRMA, an industry lobbying group, said in a statement. “It replaces the market-based structure of Medicare Part D with Medicaid-style price controls.”
The bill is scheduled for a committee markup Thursday, and it is expected to clear the panel. But Senate Majority Leader Mitch McConnell (R-Ky.) has not said whether he will bring any of the Senate’s drug pricing proposals — there are two others in addition to the Grassley-Wyden bill — to the floor this year. He is generally loath to take on health-care legislation ahead of the 2020 election.
“This legislation shows that no industry is above accountability,” Grassley and Wyden said in a joint statement. “Passing these reforms, especially those that will affect some of the most entrenched interests in Washington, is never easy.”