WASHINGTON - Today Reps. Sander Levin (D-MI), Henry A. Waxman (D-CA), George Miller (D-CA), Jim McDermott (D-WA), and Robert E. Andrews (D-NJ) introduced the Medicare Drug Savings Act. The legislation reduces Medicare Part D drug costs to taxpayers by requiring drug manufacturers to provide rebates for drugs dispensed to low-income individuals under the Medicare prescription drug benefit program. The nonpartisan Congressional Budget Office (CBO) estimates that this bill will provide $141 billion in savings over the next decade. A companion bill is being introduced by Sen. Rockefeller and 18 other members of the Senate.
Prior to 2006, the government received substantial rebates on drugs used by “dual eligible" Medicare enrollees. However, beginning in 2006, the Medicare Part D law eliminated these rebates, dramatically raising prices for both the government and profits for manufacturers. The Part D deal resulted in a substantial drug manufacturer windfall at taxpayer expense. The Medicare Drug Savings Act eliminates the windfall and requires that manufacturers provide Medicare Part D with the same low prices for drugs used by low-income seniors that the manufacturers provide to a comparable population in the Medicaid program.
The text of the bill is available online here.
“Republicans shifted individuals eligible for both Medicare and Medicaid into the Medicare Part D program in 2006 without shifting the savings they were receiving from Medicaid’s lower drug costs. This bill restores those drug rebates, saves Medicare $141 billion and ensures continued access to the same prescription drugs beneficiaries currently use and depend on," said Rep. Levin, Ranking Member of the Ways and Means Committee. “While House Republicans push policies that would end Medicare’s guarantee and shift costs to seniors and people with disabilities, this bill achieves substantial savings in the Medicare program while protecting beneficiaries."
“This legislation saves taxpayers more than $140 billion by eliminating drug manufacturing windfalls and preventing overcharging for Medicare Part D drugs," said Rep. Waxman, Ranking Member of the Energy and Commerce Committee. “If we are serious about reducing the deficit, we should pass this legislation instead of making arbitrary, across-the-board cuts to key domestic priorities and defense programs."
“This bill will improve Medicare and Medicaid’s sustainability while still providing the needed benefits our nation’s citizens depend on. As the largest payer for senior’s drugs, it is absurd we do not use our bargaining power to negotiate drug discounts with the high profit pharmaceutical industry. Simply shifting costs onto seniors or states under the Republican plan is not real reform," said Rep. Miller, Ranking Member of the Committee on Education and the Workforce.
“The pharmaceutical industry got a huge windfall in 2006 at the taxpayer’s expense and it’s about time that we end it," said Rep. McDermott, Ranking Member of the Ways and Means Subcommittee on Health. “As we continue to look for ways to reduce the deficit and make Medicare a smarter shopper, this should be a no-brainer."
“This legislation is a win-win for America that not only protects seniors by continuing to provide the same level of benefits but also generates billions of dollars in taxpayer savings," said Rep. Andrews, Ranking Member of the Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions. “Members from both parties should come together to support this common sense solution that will reduce our deficit and ensure that Medicare and Medicaid remain sustainable for generations to come."
In 2007 and 2008, a series of investigative reports by then-Oversight Committee Chairman Waxman found that drug costs in the Medicare Part D program were substantially higher than costs for those same drugs under Medicaid. The legislation introduced today addresses that problem, by requiring that manufacturers reinstate the rebate for “dual-eligibles" to match the same low prices for prescription drugs provided to low-income patients in both Medicare and Medicaid.
The legislation would require prescription drug manufacturers to provide a rebate for drugs provided to dually eligible beneficiaries as well as enrollees in the low-income-subsidy (LIS) program in the Medicare Part D Prescription Drug Program.
Rep. Levin is the Ranking Member of the Ways and Means Committee; Rep. Waxman is the Ranking Member of the Energy and Commerce Committee; Rep. Miller is the Ranking Member of the Committee on Education and the Workforce; Rep. McDermott is the Ranking Member of the Ways and Means Health Subcommittee; and Rep. Andrews is the Ranking Member of the Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions.
