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| President Signals Support for Government Price Controls as Democrats Delay Drug Plan |
Senate Finance Committee Chairman Chuck Grassley (R-IA), who is leading a bipartisan prescription drug-reform effort with the committee’s ranking member Ron Wyden (D-OR), indicated that President Trump supports their efforts to implement Medicare Part D inflation caps as part of comprehensive prescription drug reform. This position is at odds with traditional Republican-party orthodoxy for effectively serving as government price controls of healthcare, but has generally been supported by Democrats. Meanwhile, the House plan led by Speaker Nancy Pelosi (D-CA) is not expected to face a vote until at least December, as lawmakers work out differences within the party and await a final report on the bill’s costs and savings.
Legislation was advanced out of the Senate Finance Committee in July on a 19-9 vote. That package would institute a cap on Medicare Part D price hikes at the annual inflation rate. It attracted significant backlash from Republicans who have long opposed inflation caps for their potential to lead to government price control in healthcare and other industries. President Trump has also signaled support for another core Democratic plank -- federal price negotiation of prescription drugs -- a major provision of House Speaker Nancy Pelosi’s bill that has been historically opposed by conservatives.
The White House has indicated that it prefers a comprehensive package that has bipartisan support, with an Administration spokesperson declaring that, “any bill to lower drug prices must achieve the president’s priorities and be bipartisan. Grassley-Wyden is a genuine bipartisan agreement that the Administration continues to work with senators to further improve and move forward.” The inflation caps contribute significantly to government savings, estimated at $50 billion over a decade, and could help to offset others costs to the legislation.
On the other side of Capitol Hill, Democrats are working out policy disagreements between the more liberal members and moderates on H.R. 3, Speaker Pelosi’s drug bill. Democratic leadership confirmed that their package will not be voted on until at least December, pushing back the original end-of-October timeframe that had already been pushed to mid-November. Part of the reasoning for the delay is that the bill has not yet received a full report from the Congressional Budget Office scoring how much it will cost or save the federal government. A preliminary score released last month estimated that the bill would save the government $345 billion over a seven-year period. However, that estimate was based on an earlier iteration of the legislation that would target 25 drugs for negotiation before it was revised during the committee markups.
NAHU is closely monitoring this legislative process and how it will affect costs and coverage for employers and individuals. We are particularly concerned in how a final package could impact private coverage and are working to ensure that any savings to the government are not caused simply by shifting costs to employer and individual health plans. We will continue to work with members of Congress and the Administration on new concepts that can reduce the costs of prescription drugs without shifting the burden onto employers and, in turn, workers and their families.
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