Pallone Re-introduces Historic Prescription Drug Price Negotiation Legislation
Washington, DC – Energy and Commerce Committee Chairman Frank Pallone Jr. (D-NJ) today re-introduced H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act.
“Americans pay more for prescription drugs than any other country in the world, and as a result too many New Jerseyans do not take their medications because of high costs” Pallone said. “This legislation will dramatically rein in costs by finally empowering the federal government to negotiate fair prescription drug prices with Big Pharma. It will also decrease consumers’ out-of-pocket costs, and reduce Medicare and private health insurance premiums. This historic legislation finally levels the playing field, and I look forward to working with the Biden Administration to pass it into law.”
The historic legislation would empower the federal government to negotiate the cost of prescription drugs, put an end to Americans paying three or four times more for medicine than people in other countries, reverse years of unfair price hikes, and cap seniors’ out-of-pocket costs for prescription drugs at $2,000 per year. In 2019, the Congressional Budget Office (CBO) estimated that the price negotiation provisions in the bill would save the federal government about $456 billion over 10 years. CBO also estimated that the legislation would lead to $42 billion in savings to the Medicare program due to better health outcomes for patients with increased access to drugs at lower prices.
A Kaiser Family Foundation poll found that one in four Americans who take prescription medications find them to be unaffordable and nearly one in three adults in the United States report not taking their medicines as prescribed because of the cost. According to a Gallup poll, nearly nine in ten Americans support direct negotiations by the federal government with drug manufacturers on prescription drug prices. In New Jersey, the average annual cost of prescription drugs rose nearly 58 percent between 2012 to 2017. In 2017, 24 percent of New Jersey residents did not take medication as prescribed because of high costs.
The Elijah E. Cummings Lower Drug Costs Now Act would lower the cost of prescription drugs by:
- Empowering the Secretary of Health and Human Services to negotiate better prescription drug prices in Medicare and make those negotiated prices available to commercial health insurance plans:
- The CBO estimates that drugs subject to negotiation would see price reductions of up to 55 percent.
- Capping Medicare beneficiaries’ out-of-pocket spending on prescription drugs at $2,000 per year;
- Reversing years of unfair price hikes by requiring drug manufacturers to pay a rebate back to the federal government if they increase prices faster than inflation; and
- Reinvesting federal cost-savings in the National Institutes of Health and the Food and Drug Administration to support research and development of new breakthrough treatments and cures, as well as making investments in combatting the opioid crisis.
Pallone is the lead sponsor of the bill. Ways and Means Committee Chairman Richard E. Neal (D-MA), and Education and Labor Committee Chairman Robert C. "Bobby" Scott (D-VA) are also original sponsors of the bill.
Bill text is available HERE.