Elijah Cummings Lower Drug Costs Now Act

Last updated
Elijah Cummings Lower Drug Costs Now Act
Great Seal of the United States (obverse).svg
Long titleTo establish a fair price negotiation program, protect the Medicare program from excessive price increases, and establish an out-of-pocket maximum for Medicare part D enrollees, and for other purposes.
Enacted bythe 117th United States Congress
Sponsored by Frank Pallone (D- NJ)
Number of co-sponsors91
Legislative history

The Elijah Cummings Lower Drug Costs Now Act (H.R. 3) is proposed legislation in the 117th United States Congress. The bill is designed to lower prescription drug costs in the United States. Notably, the law gives the federal government the power to negotiate prescription drug prices. [1] The legislation takes the name of late Maryland Representative Elijah Cummings.

Contents

Background

The United States spends more money on prescription drugs than any other developed nation in the world. [2] [3] [4] In 2020 alone, the United States spent $358.7 Billion on prescription drugs. [5] The United States does not guarantee universal healthcare coverage to its citizens. This means that individuals that do not have health insurance or are underinsured will have to pay either the full price of the drugs, or a still large amount of the money. Most people who have health insurance still have to pay at least some money towards prescription drugs, and some drugs may not be covered by health insurance at all. [6]

Several polls have shown that a large share of the population has skipped filling drugs that were medically necessary because of the cost. [7] [8] [9] [10] [11] [12] [13] [14]

Insurance companies generally have pharmacy benefit managers negotiate discounts for drug prices on their behalf. It is unknown how much of the savings (if any) are given to the patients, as the details of these deals are generally not shared with the public. Even if the savings are passed on to the insurance company patients, it is unlikely that the savings would be extended to those who do not have insurance, meaning that they would still have to pay full price. Drug companies are willing to make deals on the prices of their drug with insurance companies because the insurance companies they negotiate lower drug prices with are more likely to have their patients use the company's drugs. [15] [16]

Key provisions

Drug price negotiation

The bill would require the Department of Health and Human Services (HHS) to negotiate certain drug prices. Under current federal law, the HHS is not allowed to negotiate the drug prices for any drug covered by the Medicare prescription drug benefit, even though other government agencies like the VA and Medicaid are allowed to do so. [17] [18] Specifically, the law would require the HHS to negotiate maximum drug prices for:

  1. Insulin Products (which are infamous in the United States for their high and increasing cost). [19] [20] [21] [22] [23] [24] [25] [26]
  2. At least 25 single-source brand name drugs that do not have any generic version to compete with them by fiscal year 2023. The 25 drug prices that are negotiated would have to be either amongst the 125 drugs that account for the most spending nation-wide, or be amongst the 125 drugs that account for the most spending under the Medicare prescription drug benefit and Medicare advantage.
  3. Starting in fiscal year 2024, 50 drugs with the same criteria as before would need to have their price negotiated.
  4. Any newly approved, single-source, brand name drugs that exceeds a price threshold that the HHS has set that was determined to likely to meet the spending criteria.

The negotiated drug prices would have to meet the following criteria:

  1. The negotiated drug price does not exceed than 120% of the drug's average price in Canada, the United Kingdom, Australia, Germany, France, and Japan.
  2. If that data is not available, then the price must not exceed 85% of the United States average manufacturer price.

The drug prices that are negotiated must be offered under both Medicare and Medicare Advantage. The drug prices that are negotiated may also be offered by private insurance companies, but the insurance companies can choose to opt out.

Any drug manufacturers that do not comply with the law's negotiation requirements may be fined or receive tax penalties. [27]

Medicare prescription drug inflation rebates

The law would require all drug manufacturers to give rebates to the CMS for drugs covered by Medicare for any drugs that cost $100 or more (average charge for one person to use the drug for a year), or for any drug that has an average manufacturer price that increasing faster than the rate of inflation. Companies that do not comply can be fined or receive tax penalties. [27]

Caps for out-of-pocket expenses

The bill would reduce the cap on out-of-pocket expenses that a person enrolled in certain Medicare programs would have to pay. The traditional Medicare plan does not have any limit on out-of-pocket expenses. However, the Affordable Care Act required out-of-pocket expense caps for Medicare Advantage health plans, [28] and such plans would have the cap reduced.

The bill extends these caps to Medicare Part D, which currently have no caps at all. Under Part D, when the costs of drugs rise, the person enrolled in Medicare must pay more in out-of-pocket expenses. This is known as cost-sharing. [29] [30]

All organizations that are contracted with the federal government to offer certain Medicare plans (known as Drug Plan Sponsors) [31] must allow certain people who are enrolled in Medicare to make co-insurance payments in installments. [27]

Drug price transparency

Drug companies would be required to report certain pieces of information on drugs that cost more than $100 and covered by Medicare or Medicaid based on the rate of price and spending increases, or face civil penalties. One provision of which would require that drug companies report certain drug price increases at least 30 days before the price increase takes effect. The HHS would then have to publish the information about the price increase on its website the day that the price is increased. [27]

Improvements for low-income people on Medicare

The bill increases the number of people eligible to receive subsidies for premiums and other medical expenses for people with a Medicare Part D plan. The two main expansions of edibility are:

  1. Allows people on Medicare to have higher incomes and still qualify for the subsidies.
  2. Makes it do that certain people who are in U.S. Territories will automatically qualify for the subsidies. [27]

Making Medicare cover dental, vision, and hearing

The bill would make the Medicare program also cover costs for

  1. Certain dental costs; specifically dentures and other basic and major treatments that the CMS deems necessary, and certain preventative-screenings.
  2. Certain hearing costs; specifically hearing aids and other treatments.
  3. Certain vision costs; specifically glasses, contacts (and the fitting of them), and eye-exams. [27]

Opioid and other funding

The bill provides funds for several programs related to public health, such as:

  1. Innovation projects at the NIH through fiscal year 2030.
  2. Innovation projects at the FDA through fiscal year 2029.
  3. Established an " Opioid Epidemic Response Fund" that supports HHS programs and initiatives to prevent opioid abuse.

The bill also mandates the HHS to cut administrative costs related to healthcare in half over a 10-year period, including costs in Medicare, Medicaid, and private insurance. The HHS would be required to start a grant program so states can establish commissions to target unnecessary administrative costs as well. [27]

Other healthcare program revisions

The bill makes some other changes to certain healthcare programs, and provides funds for other certain programs, such as:

  1. Expands issue rights on certain Medigap policies.
  2. Gives money for certain things to the Community Health Centers Fund through fiscal year 2025.
  3. Creates grant programs for trauma and mental health services in schools.
  4. Would require pricing models for Medicaid to be one that does not include profit or administrative expenses (known as a pass-through pricing model). [32] It would ban the use of the spread-pricing model, which includes profits and administrative expenses. [27] [33]

Drug advertising

The CMS would be directed to make a regulation that requires drug ads that air on television include information about how much a 30-day supply of the medication or a typical course of the treatment will cost. The CMS had planned to establish a similar rule, but a federal court had struck it down on the basis that they did not have the power to do so. [27] [34]

Cost

The Congressional Budget Office has estimated that the bill will save $345 Billion in federal spending over the course of 7 years, and the CMS found it could reduce out-of-pocket costs by $158 Billion over a decade. [35] [36] [37]

Legislative history

Summary

As of July 14, 2022

CongressShort titleBill number(s)Date introducedSponsor(s)# of cosponsorsLatest status
116th Congress Elijah Cummings Lower Drug Costs Now Act of 2019 H.R. 3 August 9, 2019 Frank Pallone

(D-NJ)

106Passed in the House (230-192) [38]
117th Congress Elijah Cummings Lower Drug Costs Now Act of 2021 H.R. 3 April 22, 2021 Frank Pallone

(D-NJ)

91Referred to Committees of jurisdiction.

116th Congress

The bill was introduced into the House of Representatives on September 19, 2019 during the 116th Congress by Rep. Frank Pallone (D-NJ). [27] The bill received 106 co-sponsors. [39] It passed the House on December 12, 2019 by a vote of (230-192). All Democrats voted for the measure, and all but 2 Republicans voted against it.

The bill was then sent to the Senate. The Senate, having been controlled by Republicans, did not bring the bill up to a vote.

See also

Related Research Articles

<span class="mw-page-title-main">Medicaid</span> United States social health care program for families and individuals with limited resources

In the United States, Medicaid is a government program that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by state governments, which also have wide latitude in determining eligibility and benefits, but the federal government sets baseline standards for state Medicaid programs and provides a significant portion of their funding.

<span class="mw-page-title-main">Medicare (United States)</span> U.S. government health insurance for the old and disabled

Medicare is a government national health insurance program in the United States, begun in 1965 under the Social Security Administration (SSA) and now administered by the Centers for Medicare and Medicaid Services (CMS). It primarily provides health insurance for Americans aged 65 and older, but also for some younger people with disability status as determined by the SSA, including people with end stage renal disease and amyotrophic lateral sclerosis.

Prescription drug list prices in the United States continually rank among the highest in the world. The high cost of prescription drugs became a major topic of discussion in the 21st century, leading up to the American health care reform debate of 2009, and received renewed attention in 2015. One major reason for high prescription drug prices in the United States relative to other countries is the inability of government-granted monopolies in the American health care sector to use their bargaining power to negotiate lower prices, and the American payer ends up subsidizing the world's R&D spending on drugs.

<span class="mw-page-title-main">Medicare Prescription Drug, Improvement, and Modernization Act</span>

The Medicare Prescription Drug, Improvement, and Modernization Act, also called the Medicare Modernization Act or MMA, is a federal law of the United States, enacted in 2003. It produced the largest overhaul of Medicare in the public health program's 38-year history.

<span class="mw-page-title-main">AARP</span> American nonprofit organization

AARP, formerly the American Association of Retired Persons, is an interest group in the United States focusing on issues affecting those over the age of fifty. The organization, which is headquartered in Washington, D.C., said it had more than 38 million members as of 2018. The magazine and bulletin it sends to its members are the two largest-circulation publications in the United States.

The Pharmaceutical Benefits Scheme (PBS) is a program of the Australian Government that subsidises prescription medication for Australian citizens and permanent residents, as well as international visitors covered by a reciprocal health care agreement. The PBS is separate to the Medicare Benefits Schedule, a list of health care services that can be claimed under Medicare, Australia's universal health care insurance scheme.

<span class="mw-page-title-main">Medicare Part D</span> United States prescription drug benefit for the elderly and disabled

Medicare Part D, also called the Medicare prescription drug benefit, is an optional United States federal-government program to help Medicare beneficiaries pay for self-administered prescription drugs. Part D was enacted as part of the Medicare Modernization Act of 2003 and went into effect on January 1, 2006. Under the program, drug benefits are provided by private insurance plans that receive premiums from both enrollees and the government. Part D plans typically pay most of the cost for prescriptions filled by their enrollees. However, plans are later reimbursed for much of this cost through rebates paid by manufacturers and pharmacies.

Express Scripts Holding Company is a pharmacy benefit management (PBM) organization. In 2017 it was the 22nd-largest company in the United States by total revenue as well as the largest pharmacy benefit management (PBM) organization in the United States. Express Scripts had 2016 revenues of $100.752 billion. Since December 20, 2018, the company has been a direct subsidiary of Bloomfield, Connecticut-based Cigna.

Health care prices in the United States of America describe market and non-market factors that determine pricing, along with possible causes as to why prices are higher than in other countries.

<span class="mw-page-title-main">Medicare for All Act</span> Proposed U.S. healthcare reform legislation

The Medicare for All Act, also known as the Expanded and Improved Medicare for All Act or United States National Health Care Act, is a bill first introduced in the United States House of Representatives by Representative John Conyers (D-MI) in 2003, with 38 co-sponsors. In 2019, the original 16-year-old proposal was renumbered, and Pramila Jayapal (D-WA) introduced a broadly similar, but more detailed, bill, HR 1384, in the 116th Congress. As of November 3, 2019, it had 116 co-sponsors still in the House at the time, or 49.8% of House Democrats.

In the United States, a pharmacy benefit manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans. According to the American Pharmacists Association, "PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims." PBMs operate inside of integrated healthcare systems, as part of retail pharmacies, and as part of insurance companies.

This article lists the healthcare statements of some candidates for president during the 2008 US presidential election.

In the United States, health insurance helps pay for medical expenses through privately purchased insurance, social insurance, or a social welfare program funded by the government. Synonyms for this usage include "health coverage", "health care coverage", and "health benefits". In a more technical sense, the term "health insurance" is used to describe any form of insurance providing protection against the costs of medical services. This usage includes both private insurance programs and social insurance programs such as Medicare, which pools resources and spreads the financial risk associated with major medical expenses across the entire population to protect everyone, as well as social welfare programs like Medicaid and the Children's Health Insurance Program, which both provide assistance to people who cannot afford health coverage.

Medicare Advantage is a capitated program for providing Medicare benefits in the United States. Under Part C, Medicare pays a sponsor a fixed payment. The sponsor then pays for the health care expenses of enrollees. Sponsors are allowed to vary the benefits from those provided by Medicare's Parts A and B as long as they provide the actuarial equivalent of those programs. The sponsors vary from primarily integrated health delivery systems to unions to other types of non profit charities to insurance companies. The largest sponsor is a hybrid: the non profit charity AARP using UnitedHealth.

Medication costs, also known as drug costs are a common health care cost for many people and health care systems. Prescription costs are the costs to the end consumer. Medication costs are influenced by multiple factors such as patents, stakeholder influence, and marketing expenses. A number of countries including Canada, parts of Europe, and Brazil use external reference pricing as a means to compare drug prices and to determine a base price for a particular medication. Other countries use pharmacoeconomics, which looks at the cost/benefit of a product in terms of quality of life, alternative treatments, and cost reduction or avoidance in other parts of the health care system. Structures like the UK's National Institute for Health and Clinical Excellence and to a lesser extent Canada's Common Drug Review evaluate products in this way.

Healthcare in the United States is largely provided by private sector healthcare facilities, and paid for by a combination of public programs, private insurance, and out-of-pocket payments. The U.S. is the only developed country without a system of universal healthcare, and a significant proportion of its population lacks health insurance.

Health care finance in the United States discusses how Americans obtain and pay for their healthcare, and why U.S. healthcare costs are the highest in the world based on various measures.

The 340B Drug Pricing Program is a US federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. The intent of the program is to allow covered entities to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Maintaining services and lowering medication costs for patients is consistent with the purpose of the program, which is named for the section authorizing it in the Public Health Service Act (PHSA) It was enacted by Congress as part of a larger bill signed into law by President George H. W. Bush.

The Affordable Care Act (ACA) is divided into 10 titles and contains provisions that became effective immediately, 90 days after enactment, and six months after enactment, as well as provisions phased in through to 2020. Below are some of the key provisions of the ACA. For simplicity, the amendments in the Health Care and Education Reconciliation Act of 2010 are integrated into this timeline.

<span class="mw-page-title-main">Sean Scanlon (politician)</span> American politician

Sean Scanlon is an American politician who is the current Comptroller of Connecticut. Scanlon previously served in the Connecticut House of Representatives from the 98th district.

References

  1. ↑ Stolberg, Sheryl Gay (2019-12-12). "House Votes to Give the Government the Power to Negotiate Drug Prices". The New York Times. ISSN   0362-4331. Archived from the original on 2019-12-12. Retrieved 2021-04-06.
  2. ↑ "Drug Prices". Bloomberg.com. Archived from the original on 2021-04-13. Retrieved 2021-04-05.
  3. ↑ Blumberg, Yoni (2019-01-14). "Here's why many prescription drugs in the US cost so much—and it's not innovation or improvement". CNBC. Archived from the original on 2021-04-30. Retrieved 2021-04-05.
  4. ↑ Ennis, Linda (2018-03-13). "Americans spend more on prescription drugs than other wealthy countries". STAT. Archived from the original on 2021-04-30. Retrieved 2021-04-05.
  5. ↑ "Prescription drug spending in U.S. 1960-2020". Statista. Archived from the original on 2021-04-08. Retrieved 2021-04-05.
  6. ↑ "When Insurance Won't Cover Drugs, Americans Make 'Tough Choices' About Their Health". NPR.org. Archived from the original on 2021-01-26. Retrieved 2021-04-07.
  7. ↑ Leonhardt, Megan (2020-02-27). "Americans are skipping medically necessary prescriptions because of the cost". CNBC. Archived from the original on 2021-04-10. Retrieved 2021-04-07.
  8. ↑ "Poll: Nearly 1 in 4 Americans Taking Prescription Drugs Say It's Difficult to Afford Their Medicines, including Larger Shares Among Those with Health Issues, with Low Incomes and Nearing Medicare Age". KFF. 2019-03-01. Archived from the original on 2021-03-25. Retrieved 2021-04-07.
  9. ↑ "Americans Struggle to Pay for their Medications, New Survey Shows - GoodRx". The GoodRx Prescription Savings Blog. 2018-11-26. Archived from the original on 2020-09-24. Retrieved 2021-04-07.
  10. ↑ LeWine, Howard (2015-01-30). "Millions of adults skip medications due to their high cost". Harvard Health Blog. Archived from the original on 2021-04-05. Retrieved 2021-04-07.
  11. ↑ Bunis, Dena. "People Aren't Taking Prescription Drugs Due to Costs". AARP. Archived from the original on 2021-04-26. Retrieved 2021-04-07.
  12. ↑ "Three issues Rx Fact Sheet National" (PDF). AARP. Archived (PDF) from the original on 2022-01-09. Retrieved 2021-04-07.
  13. ↑ Wilson, Ira B; Rogers, William H; Chang, Hong; Safran, Dana Gelb (August 2005). "Cost-related Skipping of Medications and Other Treatments Among Medicare Beneficiaries Between 1998 and 2000". Journal of General Internal Medicine. 20 (8): 715–720. doi:10.1111/j.1525-1497.2005.0128.x. ISSN   0884-8734. PMC   1490185 . PMID   16050880.
  14. ↑ "Products - Data Briefs - Number 184 - January 2015". www.cdc.gov. 2019-06-07. Archived from the original on 2021-03-18. Retrieved 2021-04-07.
  15. ↑ "How are prescription drug prices determined?". American Medical Association. Archived from the original on 2021-03-23. Retrieved 2021-04-06.
  16. ↑ Howard, David (2016). "Insurers Can Reduce Drug Prices, If Policymakers Let Them". Health Affairs Blog. doi:10.1377/forefront.20160714.055854.
  17. ↑ True, Sarah; Freed, Meredith (2019-10-17). "What's the Latest on Medicare Drug Price Negotiations?". KFF. Archived from the original on 2021-04-08. Retrieved 2021-04-08.
  18. ↑ "The Medicare Drug Price Negotiation Act of 2017 – Discussion Draft Summary" (PDF). House Oversight Committee. Archived (PDF) from the original on 2021-03-25. Retrieved 2021-04-08.
  19. ↑ Rajkumar, S. Vincent (2020-01-01). "The High Cost of Insulin in the United States: An Urgent Call to Action". Mayo Clinic Proceedings. 95 (1): 22–28. doi: 10.1016/j.mayocp.2019.11.013 . ISSN   0025-6196. PMID   31902423. Archived from the original on 2022-01-09. Retrieved 2021-04-08.
  20. ↑ "The human cost of insulin in America". BBC News. 2019-03-14. Archived from the original on 2021-04-10. Retrieved 2021-04-08.
  21. ↑ "2016 Access Survey - T1International". www.t1international.com. Archived from the original on 2021-03-03. Retrieved 2021-04-08.
  22. ↑ Cohen, Joshua. "Insulin's Out-Of-Pocket Cost Burden To Diabetic Patients Continues To Rise Despite Reduced Net Costs To PBMs". Forbes. Archived from the original on 2021-04-16. Retrieved 2021-04-08.
  23. ↑ "How Much Does Insulin Cost? Here's How 27 Brands and Generics Compare - GoodRx". The GoodRx Prescription Savings Blog. 2020-11-06. Archived from the original on 2021-04-05. Retrieved 2021-04-08.
  24. ↑ "Insulin prices are soaring, Ohioans are dying, and many are calling for capped costs". WEWS. 2021-03-11. Archived from the original on 2021-04-22. Retrieved 2021-04-08.
  25. ↑ Buchanan, Yassie. "Opinion | When you need insulin, you need insulin". The Daily Iowan. Archived from the original on 2021-04-07. Retrieved 2021-04-08.
  26. ↑ Mulcahy, Andrew W.; Schwam, Daniel; Edenfield, Nathaniel (2020-10-06). "Comparing Insulin Prices in the United States to Other Countries: Results from a Price Index Analysis". Archived from the original on 2021-04-21. Retrieved 2021-04-08.{{cite journal}}: Cite journal requires |journal= (help)
  27. 1 2 3 4 5 6 7 8 9 10 Pallone, Frank (2020-09-08). "H.R.3 - 116th Congress (2019-2020): Elijah E. Cummings Lower Drug Costs Now Act". www.congress.gov. Archived from the original on 2020-02-05. Retrieved 2021-04-06.
  28. ↑ Barry, Patricia. "Medicare - Limits on Out-of-Pocket Costs". AARP. Archived from the original on 2020-09-26. Retrieved 2021-04-06.
  29. ↑ "Beneficiary Cost-Sharing in Part D". oig.hhs.gov. 2020-07-15. Archived from the original on 2021-03-20. Retrieved 2021-04-06.
  30. ↑ "Cost Sharing - HealthCare.gov Glossary". HealthCare.gov. Archived from the original on 2021-04-07. Retrieved 2021-04-06.
  31. ↑ "What Is a Plan Sponsor". Excelsior. October 19, 2019. Archived from the original on May 18, 2021. Retrieved April 5, 2021.
  32. ↑ "Law Insider". Law Insider. Archived from the original on 2022-01-09. Retrieved 2021-04-06.
  33. ↑ "Law Insider". Law Insider. Archived from the original on 2022-01-09. Retrieved 2021-04-06.
  34. ↑ "U.S. appeals court rejects rule requiring drug prices in TV ads". Reuters. 2020-06-16. Archived from the original on 2020-10-30. Retrieved 2021-04-06.
  35. ↑ The Editorial Board (2019-11-02). "Opinion | The American Way of Paying for Drugs Isn't Working". The New York Times. ISSN   0362-4331. Archived from the original on 2021-01-28. Retrieved 2021-04-06.
  36. ↑ "Re: Effects of Drug Price Negotiation Stemming From Title 1 of H.R. 3, the Lower Drug Costs Now Act of 2019, on Spending and Revenues Related to Part D of Medicare" (PDF). Congressional Budget Office. October 11, 2019. Archived (PDF) from the original on March 30, 2021. Retrieved April 6, 2021.
  37. ↑ "Financial Impact of Titles I and II of H.R 3, "Lower Drug Costs Now Act of 2019"" (PDF). Centers for Medicare and Medicaid Services. October 11, 2019. Archived (PDF) from the original on November 13, 2020. Retrieved April 6, 2021.
  38. ↑ Willis, Derek (12 August 2015). "Gives Government Power to Negotiate... - H.R.3: To establish a fair price negotiation program,..." ProPublica. Archived from the original on 2021-04-14. Retrieved 2021-04-12.
  39. ↑ Pallone, Frank (2020-09-08). "Cosponsors - H.R.3 - 116th Congress (2019-2020): Elijah E. Cummings Lower Drug Costs Now Act". www.congress.gov. Archived from the original on 2021-04-13. Retrieved 2021-04-07.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.