Senate Passes Prescription Drug Pricing Bill
Today, the Senate passed the Inflation Reduction Act of 2022. The drug pricing provisions of the bill include:
Federal Drug Price Negotiations: The Senate bill would allow Medicare to negotiate prices directly with drug manufacturers for certain high-cost Part D drugs. Over time, the number of drugs eligible for negotiation would increase, and the ability to negotiate would extend to certain high-cost drugs in Part B. The change is a significant shift in drug pricing, as the Centers for Medicare & Medicaid Services has not previously been permitted to negotiate with manufacturers, leaving only plans and pharmacy benefit managers able to negotiate prices. Because patient out-of-pocket costs are related to drug list prices, lower list prices should translate to lower out-of-pocket costs. However, it is difficult to quantify how much savings beneficiaries will immediately see.
Limitations on Out-of-Pocket Costs: The bill includes several provisions aimed at reducing patient out-of-pocket costs, particularly costs in Medicare Part D. Specifically, the bill eliminates the 5% coinsurance requirement for spending above the Part D catastrophic coverage threshold beginning in 2024 and caps Part D out-of-pocket spending at $2,000 beginning in 2025. The bill also eliminates any cost-sharing on adult vaccines covered under Part D.
Limitations on Drug Price Growth: The bill aims to reduce spikes in drug prices by requiring manufacturers whose drug prices increase over the rate of inflation to pay rebates to the federal government. The rebates will only apply to drugs purchased for Medicare beneficiaries. The provision would take effect in 2023, with 2021 used as the baseline to calculate inflation rates.
The impact of high prescription drug prices on patient care has been one of ASHP’s highest and longstanding public policy priorities.
“ASHP will be closely monitoring the implementation of the bill at the agency level to ensure it is tailored to reduce patient out-of-pocket costs without disrupting established care delivery models or threatening patient access to medications,” said Tom Kraus, ASHP vice president of government relations.
Although the House of Representatives will still need to vote on the bill, it is expected to be signed into law. ASHP will be monitoring the bill’s progress and updating members on new developments.