One Build Back Better proposal that didn’t make it into President Biden ’s reconciliation bill ‘ framework ’ is to allow federal government negotiation for …
One Build Back Better proposal that didn’t make it into President Biden ’s reconciliation bill ‘ framework ’ is to allow federal government negotiation for prescription drugs in the Medicare Part D program. A framework isn’t legislation and this provision could still emerge as a compromise in the final bill. Termed a “pay-for,” repealing the current structure of Medicare Part D price negotiation could pay for the massive expansion of other federal programs included in the Build Back Better agenda. One Congressional Budget Office (CBO) estimate for Medicare Part D government price negotiation was at least $345 billion in savings from 2023 to 2029. Another estimate showed $581 billion in federal cost savings by 2030. Since its implementation in 2006, Medicare Part D has been a successful and popular program among seniors. According to a 2014 study, obtaining prescription drug insurance through Part D was linked to an 8 percent reduction in hospital admissions resulting in a 7 percent decrease in Medicare cost savings. As it is currently structured prescription drug prices in Part D are negotiated between pharmaceutical manufacturers and prescription drug plans which have been successful at negotiating rebates, while giving doctors more freedom to prescribe what they believe is best for their patients. The program’s success is largely due to a provision called the noninterference clause, which specifically bars the secretary of Health and Human Services from interfering in prescription drug pricing and leaves negotiations for such pricing to insurers and pharmacy benefit managers.
