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August 12, 2022

House Passes Bill Allowing Medicare Drug Price Negotiation

Credit: MedPage Today, Joyce Frieden

WASHINGTON — By a party-line vote of 220-207, the House passed the Inflation Reduction Act — a bill that among other provisions allows Medicare to negotiate drug prices — and sent it to President Biden for his signature.

“The Inflation Reduction Act is also one of the most significant pieces of health care legislation to move through Congress in over a decade,” Rep. Frank Pallone (D-N.J.), chairman of the House Energy & Commerce Committee, said during the debate on the measure. “It breaks Big Pharma’s monopoly on prescription drug prices. The bill will lower prescription drug costs for seniors by finally empowering Medicare to negotiate the cost of prescription drugs. It also caps the amount seniors pay [for prescription drugs] at $2,000 annually, caps the cost of insulin at $35 a month, and penalizes companies that unfairly hike prices by requiring them to pay a rebate to Medicare.”

The measure, which passed the Senate on Sunday after many hours of debate over the weekend, also contains the following other healthcare provisions:

  • Expanding premium and co-pay assistance for low-income seniors in the Medicare Part D drug program
  • Extending enhanced Affordable Care Act Marketplace premium subsidies, which were set to expire at the end of this year, through the end of 2025
  • Making all vaccines free for Medicare beneficiaries

Rep. David Trone (D-Md.) also praised the bill. “The last few years have highlighted decades-old flaws in our supply chains, unfair inequities in our health care system, and shortsightedness in our national vision,” he said in a statement. “Today, we began building a brighter future for everyone, no matter what corner of the country you live in. Today, we put people over politics. Today is a good day for the American people and our future generations.”

But Rep. Michael Burgess, MD (R-Texas), did not agree, arguing that the negotiating provision would stifle drug company innovation. “There are severe negative impacts in implementing the government drug price controls which are included in this bill,” he said. “If this bill is signed into law, millions of patients could die waiting — waiting for those new drugs and cures that will no longer be developed in their lifetime.”

Burgess also criticized another portion of the bill which implements the new Medicare Physician Fee Schedule, including a 0% increase in doctors’ overall reimbursement under Medicare. “Anywhere else in this town, a 0% update is viewed as a pay cut because we have 8% to 9% inflation,” said Burgess. “In addition to that, there’s a 4½% Medicare conversion factor — which is reduced — and the adoption of several changes to the evaluation and management [CPT] codes. The net effect is a big cut to the nation’s doctors.”

Rep. Buddy Carter, BSPharm (R-Ga.), called the Medicare drug price negotiation provision “[a] deeply troubling proposal that will kneecap medical innovation and harm patients’ access to cures.”

“For 40 years, I was behind the counter,” said Carter, a pharmacist. “I was the one who had to tell the patient how much their prescription was going to be. I was the one who witnessed the senior citizens trying to make a decision between buying their medication or buying their groceries.”

“We need to help lower drug prices and costs for patients,” he added. “But this legislation goes about it in all the wrong ways. Pharmaceutical companies are the drivers of innovation that deliver life-saving cures to patients. However, this legislation will result in dozens, possibly hundreds of fewer cures over the next decade.”

The bill also addresses climate change. Among the provisions in that area are:

  • More than $3 billion for air pollution monitoring in low-income communities
  • An increase in the excise tax on imported petroleum and crude oil products to fund the cleanup of industrial disaster sites. The tax will increase from 9.7 cents per barrel to 16.4 cents
  • A permanent extension of and increase to the Black Lung Disability Trust Fund, a tax on coal production to finance black lung claims from coal miners

Rep. Yvette Clarke (D-N.Y.) said that the bill’s provisions to improve air quality in densely populated areas “will prevent thousands of premature deaths.”