Categorized | Features, Pushback

House Passes Bill To Lower Drug Prices, Add Medicare Benefits

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During the 2016 Presidential campaign, Donald Trump supported the idea of the federal government negotiating drug prices as a way to cut costs for consumers.

By Al Norman

On Dec 12, the Democratic-controlled U.S. House of Representatives passed a bill that would lower drug prices for people on Medicare and private insurance, allow the program finally to be able to negotiate drug prices with manufacturers, and dedicate the savings to fill in some of major benefit holes in Medicare since its creation in 1965. The legislation caps Medicare recipients’ out-of-pocket costs for medicines at $2,000 a year. The 230 to 192 vote was along party lines, with only two Republicans voting for the measure.

During the 2016 Presidential campaign, Donald Trump supported the idea of the federal government negotiating drug prices as a way to cut costs for consumers. Yet when the House passed drug negotiation bill, President Trump came out against it. “It’s exactly what President Trump promised on the campaign trail,” said one member of the House. The President is supporting another bill that he says would lower drug costs — but does not give the government the key power to negotiate cost with drug makers.

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Norman

The new bill from the House would allow the federal secretary of the Department of Health and Human Services to negotiate lower prices for a minimum of 50 drugs, up to a maximum of 250 drugs each year. The prices for those drugs would be capped at 120 percent of the price found in other industrialized nations. The government would further be allowed to negotiate drug prices lower below the cap. If a drug maker refuses to negotiate, they would be charged with a tax up to 95 percent of the revenue for the drug.

The government would further be allowed to negotiate drug prices lower below the cap.

That steep penalty has led Republicans to argue the bill is not really “negotiation” as Democrats claim, but effectively mandates the price at which drug companies must sell their products. The White House issued a statement two days before the House bill came out saying “the penalty for failing to reach agreement with the Secretary is so large that the Secretary could effectively impose price controls on manufacturers.  Moreover, this price-fixing mechanism places price controls on drugs available under Medicare and commercial plans, and imposes devastating fines on manufacturers.”

A Congressional Budget Office (CBO) study estimated that the bill would lower prices by about 50 percent for drugs subject to negotiation and save Medicare $456 billion in its first decade. These savings would then be spent on expanding Medicare benefits to fill in some of the major holes in the existing Medicare program, like hearing, dental and vision care. People on Medicare have waited for 55 years for these basic holes in their health plan to be filled.

House Democrats said polls show Americans want drug prices to come down.  But no sooner had the bill passed, when Senate Majority Leader Mitch McConnell, R-Ky, called the legislation “socialist” and vowed to block it. Republicans said the bill would impose “price controls,” but the Veteran’s Administration has been negotiating Rx prices for decades. Since 1935, Republicans have complained that every effort to reform health care is a form of “socialism,” which many Americans believe is a form of communism. In 1945, for example, when President Harry Truman tried to include a Medicare-style program in his Economic Bill of Rights, the American Medical Association called Truman’s plan “un-American…socialized medicine,” and accused his Administration of being “followers of the Moscow Party Line.”

In 1961 when President John Kennedy was pursuing health care reform, then-actor Ronald Reagan recorded a 12 minute LP album called Ronald Reagan Speaks Out Against Socialized Medicine, in which he warned if “compulsory health insurance” ever happened, “behind it will come other federal programs that will invade every area of freedom as we have come to know it in this country.” “One day,” Reagan predicted “we will awake to find that we have Socialism.”

Within hours after the House Rx bill had passed, the media was reporting that the Senate would never pass the bill, and President Trump threatened a veto.

Readers are urged to email or mail this column to their lawmakers, urging them to fight in the Senate for passage of the Elijah E. Cummings Lower Drug Costs Now Act in the Senate.

Al Norman worked as a lobbyist in the elder home care network in Massachusetts for 33 years. He can be reached at: alnormanaeldercare@gmail.com.

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