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Policy

Last month, Nancy Pelosi announced the Lower Drug Cost Now Act, which was previously led by Representative Elijah Cummings, before his passing in October. The bill aims to tackle the current crisis plaguing Americans, astronomically high drug prices. Within H.R 3 is permission for the Health and Human Services Secretary to negotiate the prices of up to 250 brand-name drugs in Medicare that do not have competitors. Additionally, the secretary would then be able to impose harsh financial penalties on drug companies that fail to come to an agreement on lowering those prices. While the drugs within Medicare are the targets of lower pricing, Americans with private insurance, too, would be able to reap the benefits of this bill, not just Medicare beneficiaries.

The Lower Drug Cost Now Act also would cap out-of-pocket prescriptions costs for those covered under Medicare at $2,000 a year. A requirement of pharmaceuticals whose prices have surpassed inflation rates to reduce their prices, or to rebate the excess to the United States Treasury Department is one of the main goals of the bill.

Also included in the H.R. 3 is the creation of an international price index and reinvesting innovation. This International Price Index would be a reference tool to ensure that drugs sold internationally would be priced at the same rate in America as it is across the globe, to prevent the American population from being taken advantage of. The current state of pharmaceuticals is that a drug is being sold to another country and the people of that country pay far less for an identical medication. Such an index will create a maximum price for negotiated drugs, called the Average International Market (AIM) price, with the intention of increasing transparency and providing accountability. As mentioned, the bill also puts a new focus on reinvesting in research and innovations to pursue cures for diseases, disorders, and conditions. One of the main reasons why Big Pharma continues to make so much money is due to the fact that few cures have been found, therefore, the American population suffering from diseases, conditions and disorders will continue to line the pockets of Big Pharma for the duration of their lives, if nothing changes. When a focus is placed on finding cures, medications will no longer be necessary, and the crippling impact of drug prices will loosen the grip on Americans and their wallets.

Analysis:

This bill has been created to tackle the challenges faced by many Americans when filling prescriptions. The high price of drugs has left Americans stranded, some forgoing necessary medications, rationing medication to last longer, buying medication intended for pets as a supplement, or attempting to buy from outside the country, all with potentially deadly outcomes. Pelosi points to the price of insulin, a life-saving drug necessary in regulating sugar in people with diabetes, as the poster child for the outrageous price hikes of prescription drugs. Since its invention in 1922, insulin’s price has tripled between the 1990s and 2014, and the cost has nearly doubled from 2012 to 2016, from $2,864 to $5,705 annually. With this new bill, the Congressional Budget Office (CBO) estimates H.R. 3 would save the federal government $369 billion over 10 years.

With this saving, it seems as though few people can be displeased with this bill. However a majority of Senate Finance Committee Republicans opposed it in a committee vote, where it still passed. Republican and Senate FC Chairman Chuck Grassley is supporting a bill that crosses party lines in pursuit of lowering drug prices. Should Pelosi’s bill stall, Grassley has teamed up with Senator Ron Wyden in creating legislation to limit out-of-pocket costs for seniors in Medicare’s Part D to $3,100 annually. The Trump administration has its own proposal that would base the price of some Medicare drugs on an average of the lower prices paid by other countries, a common principle in Pelosi’s bill.

The American people have spoken and have made it clear that drug prices are too high, and something must be done. With many legislatures putting this issue at the forefront, it is likely a policy addressing these high prices will be passed shortly.

Engagement Resources:

This Brief was posted by USRESIST NEWS Analyst Taylor Jazmine-Smith

Photo by unsplash-logoJoshua Sukoff

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