Grassley on Misinformation on Prescription Drug Price Bill
Remarks by U.S. Senator Chuck Grassley of Iowa
here today to again promote common-sense entitlement reform.
the past year, we’ve seen a flurry of drug pricing proposals.
encouraged by the efforts from my colleagues here in the Senate, especially
Ranking Member Wyden, my friends over in the House and the President, who has
made lowering prescription drug costs one of the core principles of his
paid attention to each of the pieces of legislation that have been proposed,
and looked at their pros and cons closely.
so far there’s only one bipartisan proposal that cuts prescription drug
spending, protects innovation, lowers what seniors will pay at the pharmacy
counter, and includes entitlement reform.
Prescription Drug Pricing Reduction Act of 2019, responsibly reduces
Medicare part D costs.
as with any widely encompassing piece of legislation, there has been some
spirited debate surrounding the different provisions of our bill.
here today to clear up some of the confusion surrounding a phrase I’ve heard
thrown around in this debate: price setting.
scare tactic associated with the price setting claim is centered on one
particular policy in our bill, matching the growth of the government subsidies
that drug manufacturers receive to the rate of consumer inflation.
I set out at the beginning of this year to create a piece of bipartisan
legislation that had real and meaningful change, I knew that the focus had to
be on individual Americans.
why we capped out-of-pocket costs so that seniors can see relief.
why we banned spread pricing which games the health care system to the
detriment of the beneficiary and taxpayer.
why we created a new way of paying for lifesaving, but costly, Medicaid drugs.
that’s why we capped the growth of government subsidies in Medicare Part to the
rate of inflation.
other proposals, the Senate Finance policy does not tie the launch price to an
artificially low price.
doesn’t stop a drug company from recouping their research and development costs
leading to more innovation.
the Part D inflationary rebate does is very simple.
launching, if a drug manufacturer chooses to raise its price above the rate of
inflation, it has to return the difference for the drugs paid by Medicare.
policy limits government subsidies to provide predictability for the Medicare
program and protection for the American taxpayer.
subsidies that pharmaceutical companies would have received from an exorbitant
raise in price is returned to Americans, not to line pharma’s pockets.
inflation rebate incentivizes companies to stabilize their pricing and the
taxpayers’ money is used more prudently and efficiently.
one of the nation’s leading libertarian and free market organizations, praised
the bill for its significant cost savings for taxpayers.
anyone really think a libertarian organization would endorse price controls?
its analysis, CATO said the bill “would not impose price controls” and “would
reduce wasteful Medicare spending.”
also acknowledged that these “commonsense tweaks to a bloated entitlement
program are encountering strong opposition…mostly from those who would not make
quite as much money off the taxpayers.”
all know that Medicare’s finances are worsening.
program is projected to become insolvent within the next six years if we
continue on the same path.
Grassley-Wyden bill will ensure that the federal government is using Medicare’s
budget to pay for life-saving treatments in a fiscally responsible manner.
goal is not without precedent.
the American health care system, the government has at one time or another set
up different ways to constrain high and rising costs.
example, states are not allowed to pay Medicaid providers at a rate that is
higher than Medicare.
example is in the Medicare program.
Part A pays for the operating costs associated with acute inpatient care using
the inpatient prospective payment system or the IPPS.
enacted the IPPS to constrain the growth of Medicare’s inpatient hospital
payments by providing incentives for these facilities to provide care more
also requires that the concept of “budget neutrality” be applied to a number of
Medicare payment systems, including provider payments.
one provider gets an increase, another provider is reduced.
the Center for Medicare and Medicaid Innovation within CMS, is required by
statute to enforce financial controls on total Medicare spending.
Center can only test different ways to pay for services in Medicare or Medicaid
if they are expected to lower costs while maintaining quality.
idea of using taxpayer dollars responsibly and in a targeted manner exists in
many facets of the American health care system.
point is, while some call the inflationary rebate in Part D a price control, I
urge you to consider how Congress is using measures to contain costs currently.
all, it is not what hospitals, doctors, or pharmaceutical companies may charge,
it is about what the American taxpayer will pay for services.
not a price control.
the markup for my prescription drug bill, the director of the independent Congressional
Budget Office even agreed with me.
could continue giving examples of budgetary tools in the toolbox that Congress
uses in an attempt to be fiscally responsible in Medicare and Medicaid.
I could also continue to provide examples of outrageous drug costs.
the bottom line is that The Prescription Drug Pricing Reduction Act of 2019 is
a win for Americans across the board.
will pay less out of pocket, taxpayers will know their money is being used
appropriately, and drug manufacturers will continue to be able to innovate.
is what Ranking Member Wyden and I strove to achieve since the beginning, and I
urge all my colleagues to support this legislation.