Last week on Thursday, October 17th the House Energy and Commerce Committee approved Speaker Nancy Pelosi's broad bill to reduce prescription drug costs, and added a couple of amendments that strengthened the bill. While the legislation has to be approved by other committees before it reaches the House floor, this is an encouraging step for advocates and consumers.
The bill is numbered HR 3 and formally titled the Lower Drug Care Costs Now Act. It was approved by the House Energy and Commerce Committee by 30-22, along party lines. The proposal gives Medicare the power to negotiate lower drug prices on as many as 250 of the most expensive drugs in the United States, and those lower prices will be applied to Medicare and private health plans across the country. If drug companies refuse to negotiate with the federal government or fail to reach an agreement, they will have to pay a substantial penalty, starting at 65% of the gross sales of the drugs in question.
The Congressional Budget Office (CBO) estimated that HR 3 will save Medicare $345 billion over seven years, and that it will lead to price reductions of 40 to 55% for drugs subject to negotiations.
Before the bill passed out of the committee, Rep. and Chairman Frank Pallone (D-NJ) added amendments improving the bill. HR 3 now includes a price cap for new negotiated drugs until they have at least two or more generic drugs competing with them, in a further attempt to lower costs and promote generic competition. It further increases the minimum number of drugs that Medicare has to negotiate lower prices for from 25 to 35.
HR 3's advance is a clear sign that despite Pelosi's support for Trump's impeachment, she is still determined to move forward and pass reforms to lower drug prices. There are major obstacles to this bill being passed, but Democratic leaders want to give it their best shot. This is most welcome news.
At the same time that Energy and Commerce was passing the bill, the House Ways and Means Committee also held a hearing on it. For hours, Democrats and Republicans debated HR 3, with Democrats praising the bill and Republicans claiming that it would harm innovation. Ways and Means Committee Chair Rep. Richard Neal acknowledged these concerns but declared that drug prices were too expensive and rising, and that the bill provided more investment in research at the National Institutes of Health. "I am proud of innovation," he said. "But what is the point of innovation if you can't afford it?"
We agree with Rep. Neal. The Ways and Means Committee and other committees should approve HR 3 and quickly send it to the House floor, and the House of Representatives should vote to pass it as soon as possible.