Proposed Legislation to Reduce Drug Costs

drugs next to bills; proposed legislation to reduce drug costs

Drug costs are rapidly climbing in the United States, especially for life-sustaining drugs like insulin. After outcry from the public rising to deafening levels over the past few years, government officials are finally listening. Several members of Congress have introduced legislation in order to combat these perpetually increasing drug costs. Here are a few of the most promising pieces of legislation that could affect insulin prices and drug costs in the United States as a whole.

Reduce PBM rebates

Pharmacy benefit managers (PBMs) act as middlemen between drugmakers and insurers. When PBMs negotiate the price of an expensive, brand-name prescription drug and guarantee it will be covered by a drug plan, the PBM then receives large amounts of undisclosed money from the drugmaker in the form of rebates. These PBM rebates are also referred to as kickbacks.

This negotiation allegedly lowers the cost of the brand-name drug and makes it more likely for a consumer to select that drug as opposed to a generic version or one offered by a competitor. However, it’s a controversial aspect of the American prescription drug industry because the amount of the rebates is kept secret, thus incentivizing both parties to keep drug prices high.

The Trump administration is attempting to do away with or significantly limit the amount of money PBMs can receive in rebates. The proposed measure would also reroute savings to patients at the pharmacy counter instead of benefiting PBMs with secretive kickbacks.

Allow prescription drug imports

Canadians with diabetes pay ten times less for their insulin compared to Americans with diabetes. Senators Chuck Grassley (R-IA) and Amy Klobuchar (D-MN) have introduced legislation that would permit Americans to buy prescription drugs from Canadian pharmacies and bring them into the U.S. for personal use.

A more ambitious bill of similar nature was co-authored by Senators Cory Booker (D-NJ) and Bob Casey (D-PA) which would allow U.S. wholesalers, pharmacies, and individual consumers to import drugs from Canada. After two years under the law, prescription drugs from other countries would be permitted into the country as well.

Of the two, the Grassley-Klobuchar bill is more likely to pass. As Chair of the Senate Finance Committee, Grassley has a great deal of influence on the matter and has voiced his support for the import of prescription drugs in the past.

Either bill would certainly make insulin more affordable and likely save lives as a result.

Fix U.S. drug costs to those abroad

Senators Bernie Sanders (I-VT), Elijah Cummings (D-MD), Ro Khanna (D-CA), and other leading Democrats have thrown their support behind the Prescription Drug Price Relief Act, which intends to close the gap between what Americans pay for prescription drugs compared to other countries.

The bill proposes adjusting U.S. drug costs to match the median prices of drugs from Canada, the United Kingdom, France, Germany, and Japan. The measure doesn’t have much hope of passing, but the Department of Health and Human Services is currently exploring a similar idea to fix prices of Medicare-covered drugs to more closely resemble those in a dozen countries.

Remove barriers to access cheaper generic insulin

Another bill proposed by Senators Grassley and Klobuchar, the Preserve Access to Affordable Generics Act would bring down the cost of generic insulin, but perhaps not by much. Of all the proposed legislation to cut drug costs, this is among the most likely to be passed.

This bill attempts to crack down on the pharmaceutical industry method of “pay-for-delay,” meaning drugmakers whose patents are about to expire will pay competitors to not produce cheaper generic versions of their drug, also known as biosimilars.

What’s important to note about this bill is that biosimilars which have already entered the market, specifically insulin, have only had a marginal price cut. For example, the insulin Basaglar is only 15 percent cheaper than its biosimilar brand-name drug, Lantus.

This bill is one of the least radical measures on the table, which might make it more appealing to Republicans in the Senate.

Additional measures

Additional measures include one from Elizabeth Warren (D-MA), which would allow the United States government to produce generic versions of insulin, and one proposed by Bobby Rush (D-IL) to eliminate all out-of-pocket payments for insulin for diabetic patients covered under Medicare and Medicaid.

Regardless which of these bills (if any) passes through Congress, the point remains that Congress members are eager to significantly cut drug prices and bring financial relief to patients with diabetes across the country.

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