The Senior Citizens League Legislative Update for Janaury 10, 2020

The Senior Citizens League Legislative Update for Janaury 10, 2020

Because they could not reach a deal to lower prescription drug prices last year, members of Congress are feeling the pressure this year to get something done to accomplish that goal.  But that runs headlong into the fact that an election year is a very difficult time to get any significant legislation passed.

Nonetheless there are indications they are going to try.  And you can be sure that we at TSCL are going to redouble our lobbying efforts to keep the pressure on them to get the costs of prescription drugs down.

As we have been writing about for so long, the two main legislative measures aimed at lowering drug prices are the Pelosi bill (H.R. 3), which was passed by the House last year and has been sent to the Senate for action, and the Grassley-Wyden bill in the Senate.  However, Senate Majority Leader Mitch McConnell (R-Ky.) has said he does not intend to bring either bill up for consideration.

The Senate bill is the one introduced by Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and the top Democrat on that committee Ron Wyden of Oregon.  However, even though the bill has been co-authored by one of the most senior and powerful Republican members of the Senate (Grassley), McConnell continues to refuse allowing it to be considered by the full Senate.

The two most likely times for legislation to make headway will be after the impeachment trial of the President in the Senate until sometime in May, and then after the November elections until sometime in December.  If nothing happens by then we will have to start all over at the beginning of next year.

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Despite McConnell’s refusal to consider legislation to lower drug costs, new information has come out that may increase the pressure on him.  News that the major drug companies have raised the prices of their drugs once again came out just this week.

Reports have said that around 85 drug companies increased the prices of at least 324 drugs by an average of 5.1 percent in the first few days of 2020.  And as we reported previously, the drug companies have been spending millions of dollars to lobby Congress to try and prevent legislation that would lower drug prices.

This all comes even though the President and the Congress committed to pass some kind of legislation to lower prices even though the Senate Majority Leader is putting a stop on things right now.

We should add that people with insurance generally pay much less than the list price of a drug although someone, somewhere pays for the increased drug prices.

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On top of all this news comes another new report that the Trump administration is considering an action that would make it even more difficult to pass the Grassley-Wyden bill.

The proposal would tie Medicare reimbursements to foreign countries’ drug prices.  In other words, the proposal would match payments for drugs administered in a doctor’s office more closely with what other countries pay.

Without getting into too much detail, legislation that would cost money is always sent to the Congressional Budget Office (CBO) for an estimate of its cost.  That gives lawmakers the information they need to make a judgement about how to pay for the new cost.

There are rules that govern how CBO estimates the costs.  One of those rules is to include in the estimate how much money the bill will save.  The more money a bill would save taxpayers the less new money Congress has to find to pay for it.  Therefore, if a bill doesn’t save the government enough money it hurts its chances of passing.

The rest of the explanation gets really complicated from here, but the very brief version is that the Trump administration proposal would mean the Grassley-Wyden bill would save taxpayers less money than if the Trump proposal were not put into effect.  Thus, that would be likely to reduce the amount of support the Grassley bill could get in the Senate.

There are reports that Grassley’s staff asked the administration not to publish its proposed rule because they say it would kill the legislative effort.

So far the administration has complied with that request but there are indications it is prepared to move forward with the proposed rule on drug pricing if bipartisan efforts in Congress lag or collapse.

The advanced version of the Trump administration’s proposed rule said it would be phased in over five years and is estimated to provide about 30% savings in total spending for the selected drugs.

The initial version of the Grassley-Wyden bill was projected by the CBO to save taxpayers $85 billion and save beneficiaries $27 billion over a decade. The administration’s proposed rule, if published, would require that Grassley get a new cost estimate from the CBO before moving forward with the legislation, further delaying the process.

As an indication of how controversial the Grassley-Wyden bill is among Republicans, the Senate Finance Committee in July approved the first version of the legislation but nine of the Republicans on the committee opposed it.

The support among Senators for the Grassley-Wyden bill is fragile as a result of opposition from McConnell and drug companies and releasing the administration’s proposed rule could blow up the current coalition of supporters. Grassley’s camp is hoping that they can get enough support to get McConnell to bring the legislation to a Senate floor vote.

TSCL will be working hard to push Senators to support the bill if for no other reason than to get something passed in the Senate so negotiations with the House can begin with the hope that eventually some kind of bill to lower drug prices will pass.

For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit the Bill Tracking section of our website or follow TSCL on Twitter.