The Medicare Drug Savings Act would eliminate a special deal for brand-name drug manufacturers that allows them to charge Medicare higher prices for prescription drugs for some seniors and people with disabilities. The bill would require drug companies to provide rebates to the federal government on drugs used by dual eligibles – people eligible for both Medicare and Medicaid, who are predominantly low-income seniors and people with disabilities – just as was done for dual eligibles on Medicaid before Medicare Part D was created in 2006.
With the exception of Medicare Part D, all large purchasers of prescription drugs negotiate better prices, including Medicaid and private insurers. This bill simply restores negotiated prices for low-income Medicare beneficiaries.
This bill would correct excessive payments to drug companies, while also saving taxpayers and the federal government from footing the unnecessary cost. Over the past ten years, the 11 largest drug companies alone took in $711.4 billion in profits, including a 62 percent increase from 2003 to 2012.
Senators Jay Rockefeller (D-WV), Bill Nelson (D-FL), Amy Klobuchar (D-MN), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Dick Durbin (D-IL), Al Franken (D-MN), Angus King (I-ME), Patrick Leahy (D-VT), Jeff Merkley (D-OR), Jack Reed (D-RI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Jeanne Shaheen (D-NH), Debbie Stabenow (D-MI), Tom Udall (D-NM), and Sheldon Whitehouse (D-RI) introduced legislation to significantly reduce the deficit, better protect seniors’ health care, and reduce Medicare Part D drug costs for taxpayers.
Oregon could save anywhere from $325 to $766 million if Medicare were able to negotiate prescription drug prices similar to governments of other wealthy countries.
That’s according to a March report released by the Center for Economic and Policy Research, which was the subject of a press conference hosted by Ron Williams, executive director of Oregon Action, and Dean Baker, co-executive director of the Center and coauthor of the report. People have made a big point of arguing that the Medicare prescription drug prices are coming in at a lower price than had been projected,” said Baker who attributed the slow rise in prescription drug costs to the fact that innovation in the pharmaceutical industry has plateaued somewhat since its peak in the mid-1990s. He said the number of new products given priority review status by the Food and Drug Administration — mean the drug is considered a breakthrough product — has steadily declined since that time.
“We’re happy that prescription drug costs have risen less rapidly, but the fact that it’s gone with reduced innovation isn’t good,” Baker said. “If we paid the same prices as people pay in other countries we would still have very substantial innovation.”
Williams said the bill is particularly important in the light of federal sequestration: “We’re in the midst of a national fiscal crisis.”
The report by the Center for Economic and Policy Research, “State Savings with an Efficient Medicare Prescription Drug Benefit,” compares individual state spending on prescription drugs (using 2009 figures from the Centers for Medicare & Medicaid Services) and calculated savings by applying the ratio of drug spending from Canada and Denmark (two countries that allow prescription bargaining by Medicare, but spend different amounts on prescription drugs, with Canada spending more than Denmark).
Please call Senator Ron Wyden and ask him to stand up for Oregon seniors and support this legislation in addition to becoming a co-sponsor of the Medicare Drug Savings Act of 2013 (202) 224-5244