The Empowering Medicare Seniors to Negotiate Drug Prices Act would use the weight of Medicare to lower drug costs.
Sen Amy Klobuchar (D-MN) recently introduced the Empowering Medicare Seniors to Negotiate Drug Prices Act in an effort to reduce the cost of prescription drugs for older Americans.
The proposed legislation would allow Medicare to negotiate drug costs directly. Currently, only pharmaceutical companies can negotiate drug pricing and this practice is not allowed for the Medicare program, according to a press release from Sen Richard Blumenthal (D-CT), a supporter of the proposal.
"Bargaining for lower drug prices—the best deal for seniors and all consumers—is sound economics and common sense. This reform is long overdue, enabling Medicare to negotiate lower prices, with savings for taxpayers and likely patients at drug counters,” Blumenthal said.
This proposal is driven by the boom in drug costs for older Americans insured through Medicare Part D who may be spending a significant portion of their household income on prescription drugs.
“The uncontrolled explosion in pharmaceutical drug pricing is crippling patients and our national economy. Whether it is 5000% price increases for decades-old, off-patent drugs, or 300% increases for a simple workhorse medical supplies like saline, Congress must act,” Blumenthal said in the release. “This simple measure is a first step toward comprehensive action required to correct this crisis.”
This law has gained support from 30 other Democratic Senators, but has not received traction among GOP lawmakers.
If approved, the legislation would allow the secretary of the Department of Health and Human Services to negotiate drug costs on behalf of the 41 million beneficiaries. Due to the large market share of the Medicare program, it is likely that drug costs for these patients would be reduced.
"It makes absolutely no sense to prohibit the federal government from negotiating directly with drug companies for lower prices,” said Sen Chris Murphy (D-CT), a supporter of the proposal. “The drug industry is very powerful in Washington, but their vice grip on healthcare policy has to end. Allowing the federal government to negotiate for lower prices will save taxpayers billions and result in big savings for consumers. It's a no brainer."
In March 2017, California state Senator Ed Hernandez (D-West Covina) recently proposed new legislation focused on increasing drug pricing transparency. The bill would promote drug pricing transparency by requiring manufacturers to provide notice prior to increasing prices and would require health plans to report premiums spent on prescription drugs.
Other senators have introduced bills surrounding the high cost of prescription drugs, highlighting the need for intervention in the United States.