New Senate Bill would Lower Drug Prices – Extend Social Security
Last week we told you that Senate Democrats have revealed they will make one last try to pass a bill to lower prescription drug costs before Congress goes on its annual August recess. That effort starts this week when both houses of Congress return to Washington after their July 4th recess to begin a 4-week marathon to finish as much important legislation as they can prior to August 8, the scheduled beginning of that August recess.
Since President Biden’s plan to lower prescription drug prices was announced nearly a year ago the main problem has been a few members of his own party in the Senate – mainly Sen. Joe Manchin of West Virginia, but also 1 or 2 others.
Because the Senate is evenly divided and no Republican will vote for Biden’s plan, every Democratic vote is needed and Manchin, until now apparently, has refused to agree to support the plan.
However, Senate Majority Leader Charles Schumer (D-N.Y.) has been working with Manchin to try and produce a bill Manchin can support.
According to reports, they have reached a tentative agreement on legislation to lower drug costs and extend the solvency of Social Security, but it is part of a larger bill that still is not finalized. That bill contains contentious details on energy spending and tax provisions that are still being negotiated, but Democrats hope to unveil deals on those this week.
The new bill is expected to raise about $1 trillion in revenue, half of which would be used on new spending and half on cutting the deficit over a 10-year period.
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Social Security Solvency
Extending the solvency of Social Security, along with lower prescription drug prices, has been at the top of TSCL’s agenda for several years so we are pleased the Senate is addressing those issues in this bill.
The way the bill would extend solvency is complicated and has to do with closing a tax loophole frequently used by law firms and other partnerships.
Under current law, the Medicare hospital trust fund is to become insolvent by 2028. Reportedly, this new legislation would provide funding to extend that to 2031. While that is better than nothing, it falls far short of the kind of solution that is really needed to protect and preserve Social Security for years to come.
Once the new bill is released TSCL will carefully review it to determine whether we will support it.
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Insulin Costs Not Included in New Bill
One of the goals of many members of Congress has been to lower the cost of insulin. However, the latest bill to lower prescription drug prices removes a provision to cap patients’ insulin costs at $35 per month.
That was done because there is some question as to whether the insulin cap could comply with the complicated Senate rules governing the process for bypassing what most expect to be a Republican filibuster of the legislation to lower prescription drug costs.
Democratic leaders say the bill to lower insulin costs will be handled in a separate bi-partisan bill authored by Sens. Jeanne Shaheen (D-N.H.) and Susan Collins (R-Maine), which is moving forward and could get a vote in the Senate this month.
Because of Senate rules, the Shaheen-Collins bill will require support from at least 10 Republican senators to clear a filibuster and pass. However, it is far from clear that 10 Republicans can be found to support the bill. Some are citing fears of interfering with the free market as the reason for their opposition to the bill.
Democrats also claim the Republicans will attempt to block any bill to lower drug costs to deny them a legislative victory in this election year when control of Congress is on the line.
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Government Agency may Join Effort to Lower Drug Prices
The Federal Trade Commission (FTC) is considering the use of a rarely used anti-price discrimination law to potentially crack down on dominant companies’ unfair use of market power. The Federal Trade Commission is ramping up enforcement against illegal bribes and rebate schemes involving pharmacy benefits managers, it announced in a June enforcement policy statement.
It gave as an example the sky-rocketing cost of insulin. In its statement it explained its action this way:
“We [are taking this action] by highlighting insulin, which many have cited as one prominent example of a prescription drug impacted by high rebates and fees to PBMs and other intermediaries. Insulin is a life-sustaining treatment for roughly 8 million Americans who rely on it to control diabetes. Research indicates that the wholesale price of insulin nearly tripled between 2009 and 2017, increasing out-of-pocket costs for both insured and uninsured patients. The list price for a year’s supply of insulin has risen to nearly $6,000, with out-ofpocket costs for insulin alone averaging $1,288 for uninsured patients and $613 for insured patients as of 2017.
Patients with diabetes have described how rising insulin costs have rendered this essential product unaffordable and harmed them in different ways. 10 The increased cost of insulin has caused many patients to ration it, 11 causing suffering, severe illness, and death.
In addition to other factors, some have suggested that high rebates and fees to PBMs and other intermediaries may incentivize higher list prices for insulin and discourage coverage of the lowest-cost insulin products.”
TSCL hopes that between legislative action in Congress and regulatory actions by various parts of the Executive branch, the costs of prescription drugs will finally begin to come down.
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As we continue moving toward a new normal in dealing with the Covid 19 pandemic, TSCL remains constant in our fight for you to protect your Social Security, Medicare, and Medicaid benefits.
For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit our website at www.SeniorsLeague.org or follow TSCL Facebook or on Twitter.