Congressional Democrats and the White House reached a historic agreement Tuesday on a plan to lower prescription drug prices in a deal negotiated by Rep. Scott Peters.
The agreement, based largely on legislation introduced by Peters and Rep. Kurt Schrader of Oregon, would cap what seniors pay at the pharmacy counter and allow Medicare to directly negotiate the prices of older drugs in both Parts B and D.
“Our compromise deal accomplishes my goal of establishing the first-ever out-of-pocket cap for seniors’ prescriptions, pays for these benefits using pharma profits, and generates billions in savings to the federal government,” Peters said.
“It does all of this, and more, without stifling the discovery of future cures and ceding America’s scientific leadership to China or other countries,” added Peters, whose 52nd District in coastal San Diego County is a world center for biomedical research.
Senate Majority Leader Chuck Shumer said the agreement would be included in President Biden’s “Build Back Better” legislation which Democrats hope to pass by reconciliation in connection with a major infrastructure bill.
“I’m pleased to announce that an agreement has been reached to lower prescription drug prices for seniors and families,” Schumer told reporters. “Fixing prescription drug pricing has consistently been a top issue for Americans year after year, including the vast majority of both Democrats and Republicans who want to see a change because they simply cannot afford their medications.”
Key elements of the compromise deal are:
- Caps out-of-pocket costs for seniors at $2,000 per year and permits payment throughout the calendar year via monthly installments.
- Allows negotiation of drug costs in Medicare Parts B and D for some drugs older than 9 years and others older than 12 years.
- Establishes a $35 out-of-pocket maximum for insulin.
- Penalizes drug manufacturers that raise the price of a drug beyond the inflation rate for drugs in Medicare Parts B and D beginning Oct. 1, 2021.
- Increases transparency by establishing reporting requirements for pharmacy benefits managers – the corporate middlemen between drug manufacturers and benefits payors.
- Promotes lower-cost options, such as generics, by incentivizing and bolstering competition in the marketplace.
Peters had led centrist Democrats in opposition to a more far-reaching drug pricing plan that many researchers and patients had worried would reduce the financial incentives for developing new drugs.
Reuters contributed to this article.