Limiting the inflation rebates to just Medicare means that drug makers can still annually raise prices for the two-thirds of Americans younger than 65 who have private health insurance. The bill would still allow Medicare to negotiate the prices for drugs it provides under Part B and Part D for the first time, would apply a tax to companies failing to comply with the negotiated price and apply a $2,000 cap on annual out-of-pocket expenses for people enrolled in Medicare Part D. MacDonough found that under Senate rules the inflation provisions of the bill were not primarily budgetary in nature. Now, the legislation will not count commercial markets, which cover roughly 180 million Americans. The parliamentarian ruled earlier Saturday that energy tax credits, including for the purchase of electric vehicles, can be allowed in the bill.ĭemocrats originally designed the bill to require drug makers to pay the government revenue earned from raising the price of their products at more than the US inflation rate, calculated by units sold in both Medicare and commercial markets. With midterm elections looming in November, the tax, climate and spending package is on track for passage after a year of wrangling with moderate holdout senators Joe Manchin and Kyrsten Sinema over the contents.
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“I am disappointed that the calculation for the Medicare inflation rebate that included commercial units sold was ruled out of compliance, but the legislation nevertheless puts a substantial check on Big Pharma’s ability to price gouge,” Senate Finance Committee Chairman Ron Wyden said in a statement.ĭemocrats may try to leave the full insulin cap in the bill and challenge Republicans to vote to remove it.
The ruling on the inflation price penalty suggests the Senate official is likely to strike the cap in the private market as not closely related to the federal budget. The inflation rebate is allowed to be applied to Medicare prices, but not in the commercial market according to two people familiar with the ruling. Yet the Senate rules official disallowed some provisions meant to stop drug companies from raising prices at a rate faster than inflation.
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“Democrats have received extremely good news: for the first time, Medicare will finally be allowed to negotiate prescription drug prices, seniors will have free vaccines and their costs capped, and much more,” Senate Majority Leader Chuck Schumer said in a statement. The drug price provisions are part of a budget bill that the Senate plans to begin debating later Saturday, representing a slimmed-down version of President Joe Biden’s multi-trillion dollar domestic agenda. The Senate parliamentarian, Elizabeth MacDonough, ruled that most of the drug-price bill is eligible for a fast-track budget process whereby Democrats, who have a narrow majority in the chamber, can pass legislation without the threat of a Republican filibuster. The rulings are a partial victory for drug makers, who could try to make up their lost profits in Medicare on private insurers.
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