NJ 6th District Congressman Unveils Legislation Building on Medicare Drug Price Negotiation Ahead of November 30th Deadline for CMS to Announce Next Round of Negotiated Prices

Washington, D.C. – Today, Pallone along with House Democratic Health Committee leaders introduced updated legislation to lower prescription drug prices for American families, close loopholes in President Trump’s Big Ugly Bill, and rein in pharmaceutical price gouging ahead of the November 30th deadline for the Trump Administration to announce the latest round of negotiated prescription drug prices for seniors. The Administration has yet to make any announcements.

The updated Lowering Drug Costs for American Families Act was introduced by Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), Ways and Means Committee Ranking Member Richard E. Neal (D-MA), and Education and Workforce Committee Ranking Member Robert C. “Bobby” Scott (D-VA).

The Inflation Reduction Act gave Medicare—for the first time in the program’s history—the power to negotiate lower drug prices for America’s seniors. It was a historic achievement by Democrats that lifted restrictions on negotiation put in place by Republicans nearly 20 years before. The law also capped out-of-pocket prescription drug costs at $2,000 annually for Medicare beneficiaries, capped the price of insulin at $35 per month for seniors, and penalized pharmaceutical companies for unfairly raising prices.

The Lowering Drug Costs for American Families Act builds on this important progress, including by allowing Medicare to negotiate more drug prices each year, making those lower prices available to the commercial insurance market, capping people’s annual out-of-pocket costs on prescription drugs and insulin at $35 per month, and closing loopholes made by the Trump Administration that allow manufacturers to avoid negotiating prices for years.

“Democrats gave Medicare the power to negotiate prescription drug prices, but there’s more that we can do to lower more prices sooner,” Energy and Commerce Committee Ranking Member Pallone said. “While President Trump claims to care about reining in prices at the pharmacy counter, he’s actually signing laws to undermine negotiation and enriching himself with the TrumpRx scam. It’s time for Republicans to stop playing games and start working with Democrats to build on the progress of Medicare price negotiation. It’s time we make these lower prices available to everyone with private insurance, cap drug costs for more patients, and undo the harm Republicans caused in their Big Ugly Bill.” 

The Lowering Drug Costs for American Families Act builds on the drug pricing provisions Democrats passed in the Inflation Reduction Act and closes new loopholes created by Trump’s Big Ugly Bill that allow pharmaceutical companies to avoid or delay negotiation longer on lifesaving drugs. Specifically, the bill would:

• Extend the historic drug price negotiation program to all Americans with private coverage. This includes over 164 million workers and their families who get health coverage through their jobs and more than 24 million individuals with Affordable Care Act coverage;
• Stop drug companies from raising prices faster than inflation by ensuring that the inflation rebates enacted under the Inflation Reduction Act also apply to individuals covered by private health plans. Extending the inflation rebates to privately-covered American workers can save as much as $40 billion over the next decade alone;
• Strengthen the drug price negotiation program to deliver more savings to the American people by increasing the annual number of prescription drugs selected for negotiation from 20 to 50;
• Protect patients from high out-of-pocket costs by extending the annual $2,000 out-of-pocket cap on prescription drugs to people with private health insurance;
• Limiting out-of-pocket costs for insulin at $35 per month for people with private health insurance;
• Close the drug price negotiation loophole created by Trump’s Big Ugly Bill, which allows pharmaceutical companies to avoid negotiating prices for years by claiming an orphan drug designation on widely used drugs; and
• Emphasize that Americans should not pay 3 to 5 times more for the same drug as those in other countries by requiring the Secretary of the Department of Health and Human Services to consider the international price for the drug when negotiating prices.

In 2019, Pallone, Neal, and Scott worked with then Speaker Nancy Pelosi (D-CA) to introduce H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act. The bill passed on the House Floor in December 2019 and later served as the blueprint for the drug pricing provisions included in the Inflation Reduction Act, which President Biden signed into law in 2022.

A section-by-section is available HERE.

Bill text is available HERE.