HR 5150 Bill to Strengthen Medicare, Reduce Drug Costs for Patients

Mar 1, 2018 Issues: Health Care

WASHINGTON, D.C. - Today, Representative Sandy Levin (D-MI), the Ranking Member of the Ways and Means Subcommittee on Health, introduced the Protecting Medicare from Excessive Price Increases Act. The bill will require prescription drug manufacturers to pay a rebate when the price of their Part B drug increases faster than inflation.

“Medicare currently has no protection against excessive price increases for prescription drugs covered through Part B,” said Rep. Levin. "This leads to unnecessary growth in program spending and higher costs for beneficiaries. Informed by recommendations of the nonpartisan Medicare Payment Advisory Commission, this bill is an important step that will help strengthen the Medicare program and reduce out-of-pocket costs for seniors.”

Although most prescription drugs are covered by Medicare under Part D, there are many categories of outpatient drugs covered through Part B. These include injectable medicines, cancer treatments, certain vaccinations, and other medications administered directly in a physician's office or in a hospital outpatient department. Total spending on Part B drugs was $25.8 billion in 2015, of which approximately $5 billion was paid out-of-pocket by beneficiaries.

Under current law there is essentially no limit on manufacturers’ authority to set and raise prices for medications covered by Part B. Spending on such drugs has grown on average by 9 percent annually since 2009.

In response to a request made by Rep. Levin and former Rep. Jim McDermott (D-WA) to investigate the matter, the Department of Health and Human Services’ Office of the Inspector General indicated that implementing an inflation rebate program for the 64 most expensive Part B drugs could protect the federal government and Medicare beneficiaries from significant drug price increases to the tune of $1.4 or $1.8 billion dollars in 2015 alone.