ICYMI: Bipartisan Bill Would Help Lower Rx Drug Prices
February 10, 2020
By Anthony Kern
The Trump administration recently announced its support for a bipartisan bill that would help curb prescription drug prices. The Prescription Drug Pricing Reduction Act—introduced by Senators Chuck Grassley, R-IA, and Ron Wyden, D-OR—would shield vulnerable senior communities on Medicare from rising drug costs and penalize pharmaceutical corporations for price gouging. In the past few years, pharmaceutical behemoths, facing little competition, doubled, tripled, and quadrupled the price of their prescription drugs.
The Prescription Drug Pricing Reduction Act (PDPRA) would penalize insulin manufacturers and other pharmaceutical manufacturers that raise their prices faster than the rate of inflation. In other words, companies with little competition would have an incentive to not hike their prices. Otherwise, what would stop monopolistic pharmaceutical companies from price gouging?
Many people are hesitant about government intervention in the marketplace. But Medicare isn’t the marketplace; it is a program through which the government effectively subsidizes pharmaceutical companies. Medicare is the pharmaceutical industry’s second-largest customer, spending $126 billion on prescription drugs in only one year.
And, as drug prices rise, taxpayers will be footing even higher bills. This bill would not impose “price controls,” as pharmaceutical companies would remain free to charge whatever they want in the private market. What this bill does is impose a cap on the growth in taxpayer subsidies to pharmaceutical companies. In total, the PDPRA’s measures would save taxpayers over $100 billion dollars.
Americans want their lawmakers to pass legislation that curbs prescription drug prices. A poll found that eight in ten voters think Congress should take action to lower drug costs. The PDPRA would ensure that Americans can afford their needed prescriptions.
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