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S.2011 / H.R.4138 - Medicare Drug Price Negotiation Act

To amend title XVIII of the Social Security Act to provide for the negotiation of lower covered part D drug prices on behalf of Medicare beneficiaries and the establishment and application of a formulary by the Secretary of Health and Human Services under Medicare part D, and for other purposes.



You might favor this bill if:
►  You believe that the government should have the ability to negotiate directly with drug companies to lower prices for Medicare beneficiaries, allowing to save tax payers over $145 billion over 10 years.

You might oppose this bill if:
►  You think that federal negotiations could increase drug prices rather than reduce them. The federal government's track record of negotiations often times does not side with tax payers.

Watch Sen. Sanders speak about the pharmaceutical industry in 2016


The Medicare Drug Price Negotiation Act would allow the government to negotiate directly with drug companies to lower prices for Medicare beneficiaries, much like the VA (Veteran Affairs) and Medicaid do today.

Current law prohibits the Secretary of Health and Human Services (HHS) from negotiating directly for lower prices in Medicare, even though Medicare paid for 29% of retail drug costs in 2015. The federal government could save between $15.2 billion and $16 billion a year if Medicare Part D paid the same prices as Medicaid or VA.

President Trump has warned that the pharmaceutical industry is “getting away with murder,” has criticized“outrageous” drug prices, and has pledged to create a “fair and competitive bidding process” that would result in prices “coming way, way, way down.” President Trump has also publicly acknowledged the “massive” spending and lobbying by the pharmaceutical industry have driven drug prices “through the roof.” Although President Trump has supported the idea, he has not acted on the subject.

According to Senator Sanders' press release on the legislation, the bill "would leverage the purchasing power of the government by using formularies to enhance competition and establish a fallback price—based on what other federal agencies and foreign countries pay—to kick in automatically if negotiations are unsuccessful." The bill would also preserve critical protections for patient access and strengthen patient appeals processes.

The legislation would restore rebates on drugs covered under Part D for low-income beneficiaries, which were eliminated when Part D was created. The rebates apply to both brand-name and generic drugs and extends rebates to all Medicare beneficiaries who are covered by the Low-Income Subsidy, in addition to those who are dually eligible for Medicare and Medicaid. According to the Congressional Budget Office, restoring these rebates for brand-name drugs alone would save taxpayers $145 billion over ten years.

The Secretary is to publish a report with the criteria assessed for every negotiation made. Each negotiation is to be made over the course of one plan year. If enacted, the first negotiation year would begin on January 1, 2019. Once a price is reached, that price will remain in effect for three years.

“While drug corporations make extraordinary profits, our people are dying and becoming sicker than they should because of outrageously high prices for the medicine that they need," says sponsor of the bill Senator Sanders. "This is unacceptable. It’s time for President Trump to follow through on his promises to the American people. We must join the rest of the industrialized world by implementing prescription drug policies that work for everybody, not just the CEOs of the pharmaceutical industry.”


“Before and after the election, President Trump said over and over again that drug companies were ‘getting away with murder’ and that he wanted to give the government authority to negotiate lower drug prices. That’s what our bill does. I know there have been a lot of distractions with the President—a LOT of distractions. But this is what the American people want us to be working on. They are sick of the tweeting, the insults, the infighting, and all the rest of it. They want us to work together to lower drug prices, and they want action now. We are doing our part. We hope President Trump will do his,” said ranking member and sponsor of the bill Rep. Cummings.


The legislation has been introduced to the Senate and currently sits on the Finance Committee. A companion bill has been introduced to the House and is currently referred to the Subcommittee on Health.

S.2011

Sponsored by: Sen. Sanders, Bernard [I-VT].

Cosponsored by: 0 Rep / 7 Dem.

See list of cosponsors.



H.R.4138

Sponsored by: Rep. Cummings, Elijah E. [D-MD-7].

Cosponsored by: 0 Rep / 18 Dem.

See list of cosponsors.


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