HHS Secretary Becerra Praises Senate’s Action on Prescription Drug Costs
On Sunday, August 7, immediately after the U.S. Senate passed the Inflation Reduction Act (H.R. 5376), the Department of Health and Human Services (HHS) released a statement on behalf of Health and Human Services Secretary Xavier Becerra, praising the legislation.
In the statement, posted to the HHS website, Becerra said, "We all have the right to high-quality, affordable health care. As the Secretary of HHS, I am proud that because of the American Rescue Plan and other Biden-Harris Administration efforts, more people than ever before have health insurance coverage. Today, with Senate passage of the Inflation Reduction Act, we are on the cusp of even more relief for America's families when it comes to affording the health care they rely on and deserve. With this bill,” he added, “millions of Americans will see lower health care costs. The Inflation Reduction Act locks in premiums that save 13 million people an average of $800 per year. For anyone who relies on Medicare, the bill will put a $2,000 cap on their out-of-pocket costs for the prescription drugs that they need. In addition, it will do something that we have tried – and failed – to do in Washington for decades – allow Medicare to negotiate a better deal on prescription drugs. No one should have to go without health care or a prescription they need because they can't afford it,” he added.
The Inflation Reduction Act, which has major provisions in three areas—healthcare, climate and energy, and taxation—was passed on a party-line vote, 50-50, with all Democrats in the Senate voting for it, and no Republicans doing so, and Vice President Kamala Harris breaking the tie. It now goes to the House of Representatives, where Democrats currently hold 220 seats and Republicans, 210. The bill is expected to pass there along party lines as well, and then to go to President Joe Biden for his signature, sometime in the next couple of weeks.
On Saturday, August 6, as the bill was going through debate on the Senate floor, the White House released a statement attributed to the Office of Management and Budget (OMB) in the Executive Office of the President. It included the following statement about the bill: “The bill would lower the costs of prescription drugs for millions of Americans and reduce federal spending on prescription drugs by allowing Medicare to negotiate lower prices. And, the bill would lower health care costs for millions of Americans – locking in health care premiums that save 13 million people an average of $800 a year.”
With regard to its healthcare provisions, CNN’s Alex Rogers, Clare Foran, Ali Zaslav and Manu Raju wrote on Sunday that “The bill would empower Medicare to negotiate prices of certain costly medications administered in doctors’ offices or purchased at the pharmacy. The Health and Human Services secretary would negotiate the prices of 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number would rise to 20 drugs a year for 2029 and beyond. This controversial provision is far more limited than the one House Democratic leaders have backed in the past. But it would open the door to fulfilling a longstanding party goal of allowing Medicare to use its heft to lower drug costs,” they wrote.
“Democrats are also planning to extend the enhanced federal premium subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way, they wouldn’t expire just after the 2024 presidential election.” And, the CNN reporters wrote, “To boost revenue, the bill would impose a 15% minimum tax on the income large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies with profits over $1 billion.”
Also on Sunday, the Washington Post’s Tony Romm wrote that “The prescription drug pricing reforms aim to help cut costs for seniors enrolled in Medicare. It caps their out-of-pocket costs at $2,000 annually, while allowing the U.S. government to negotiate the price of a small set of medicines beginning in 2026. The landmark proposal is expected to save elderly Americans money and achieve billions in savings for Washington over the next decade. Pharmaceutical giants, which forcefully opposed the bill, also would be required to pay ‘rebates’ to the federal government if they raise Medicare drug prices beyond the rate of inflation. But Democrats did not accomplish everything they sought. An attempt to lower and cap the price of insulin, for example, faltered after Republicans on Sunday stripped it from the bill. Their opposition appeared to doom the plan for the remainder of the year, because a bipartisan attempt to reduce the cost of the lifesaving diabetes drug previously failed to secure GOP support,” Romm wrote.
Consumer advocacy groups were quick to praise the passage of the Inflation Reduction Act by the Senate. On Sunday, Frederick Isasi, executive director of the Washington, D.C.-based Families USA, said in a statement posted to the organization’s website, that “David may just triumph over Goliath. Stopping Big Pharma’s price gouging and lowering the cost of prescription drugs is a huge victory for families across this nation. Senators passed a strong and wildly popular bill that will take on the drug industry’s pricing abuses and curb health insurance premium spikes at a time when working families need it the most. We remain committed to pursuing other opportunities to address the critical issues that are absent from the Senate deal. In particular, we must ensure that our most vulnerable families living in states that have refused to extend Medicaid have coverage that protects their health and financial security. We must also finish the work to ensure people who are covered under Medicare can have their oral health needs met and moms and new babies have access to post-partum health care, key policies that were part of earlier versions of this legislation,” Isasi added. On its website, the association describes itself thus: “Families USA, a leading national, non-partisan voice for health care consumers, is dedicated to achieving high-quality, affordable health care and improved health for all. Our work is driven by and centered around four pillars: value, equity, coverage, and consumer experience. We view these focus areas — and the various issues unique to each area — as the cornerstones of America’s health care system.”
Meanwhile, Ezekiel Emanuel, M.D., Ph.D., who is the vice provost for global initiatives and co-director of the Health Transformation Institute at the University of Pennsylvania, and who was a key White House adviser to President Barack Obama during the development of the Affordable Care Act (ACA) in the numerous months leading up to the passage of that landmark legislation in March 2010, told Healthcare Innovation that “You had almost a 33-percent increase” in individuals accessing health insurance through the ACA exchanges “because of the COVID subsidy; you went from 10 million to 14.5 million. And those subsidies will be positive. On drugs, we’ve got the camel’s nose under the tent; we’ve started on the road and taken the first step,” Dr. Emanuel said, regarding the Medicare program’s ability to negotiate directly with pharmaceutical manufacturers, under the Inflation Reduction Act. “Those of us in the policy world should be clear: we’re talking about 10 drugs in 2026 to start, and going up to 20 drugs within the next decade. It’s a first step. But if it’s relatively painless and works, I think we will go to the next step; we’ll do more, and we’ll do cost-effectiveness analysis to go forward. That’s all down the line. And we’ve heard from Senator Ron Wyden, wisely, that this is the start, it’s not the end, but we’ll make progress.”