A new analysis shows H.R. 3 would bring the cost of common medications down significantly.
The cost of many common prescription drugs has outpaced the rate of inflation by more than 13 times, according to a new report by the Center for American Progress. According to the report, if Congress enacted a bill to allow bulk purchasing by the federal government and curb cost hikes, American patients and businesses could each save thousands of dollars annually.
The report, released Tuesday with the title "H.R. 3 Could Save Patients Thousands of Dollars on Prescription Drugs," found that in January 2021, the cost of 14 drugs increased by 7.9% and more. With Medicare beneficiaries forced to pay up to thousands of dollars per year for their medications under Medicare Part D plans, soaring prices can make those treatments unaffordable for many.
The report's authors examined how much H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, would reduce drug prices. That bill, introduced on April 22 by Rep. Frank Pallone (D-NJ), would require the federal government to negotiate the prices for certain drugs covered by Medicare with drug manufacturers and would require the manufacturers to provide a rebate on drugs whose price increases exceed the inflation rate.
If the Department of Health and Human Services were permitted to purchase 22 common drugs in bulk, the center's analysis found, people with diabetes could save between $28 and $176 a month on insulin. Patients taking the blood thinner Eliquis could save $98 a month.
The cost savings for the multiple sclerosis medication Acthar would be nearly $100,000 per three-week treatment.
"This analysis shows that negotiation could dramatically lower prices of expensive, commonly used drugs, like insulin — reducing premium expenses for businesses and the American people and lowering patients' out-of-pocket drug spending," Colin Seeberger, the center's director of media relations, said in an email.
In all, the Congressional Budget Office estimates, H.R. 3 would save the federal government nearly $500 billion over 10 years. A Centers for Medicare and Medicaid Services actuarial analysis of an earlier version of H.R. 3 in 2019 predicted American families would save $120.2 billion on premiums and out-of-pocket costs and businesses would save $43.1 billion over a decade.
The House passed a similar bill in 2019, with most Republicans voting against it — even some who had run on promises to support the idea. Then-Senate Majority Leader Mitch McConnell blocked the bill from even getting a vote in his chamber.
"Socialist price controls will do a lot of left-wing damage to the healthcare system. And of course we're not going to be calling up a bill like that," he told reporters that September.
Shortly after he made those comments, the Kentucky Republican received $50,000 in pharmaceutical industry contributions to his reelection campaign, though several of those donors denied any connection between McConnell's actions and their donations.
But according to a Congressional Budget Office estimate, such reductions would likely result in "approximately 8 fewer drugs" over the next 10 years and "about 30 fewer drugs over the subsequent decade."
The vast majority of Americans back requiring Medicare to negotiate lower drug prices. A 2019 Kaiser Family Foundation Health poll found 86% support for allowing such negotiations.
A survey released on July 7 of this year by the advocacy group Protect Our Care found that in 10 House districts represented by Democrats who told House Speaker Nancy Pelosi they wanted bipartisan support for any legislation and "buy-in from a majority of Americans and stakeholders in the public and private sectors," 77% of voters backed negotiations between Medicare and drug manufacturers.
Even Donald Trump ran in 2016 on a promise to negotiate with pharmaceutical companies to "save $300 billion" each year. "We don't do it. Why? Because of the drug companies," he said — before abandoning his pledge and threatening to veto H.R. 3 if it passed.
Each day, American families are forced into an impossible choice: to not take their medicine, to ration it, or to put food on the table and keep a roof over their head. As you know, pharmaceutical corporations are charging Americans prices that are three, four, and even ten times higher than what they charge for the same drugs in other countries – even though they admit they still make a profit overseas. Finally giving Medicare the power to negotiate drug prices to ensure that Americans are no longer price-gouged for life-saving medications is critical.
Published with permission of The American Independent Foundation.