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Lowering Drug Costs for American Families Act
1/4/2025, 11:12 AM
Summary of Bill HR 4895
The key provisions of the bill include:
1. Allowing the Secretary of Health and Human Services to negotiate drug prices with pharmaceutical companies for Medicare Part D beneficiaries. This provision aims to lower drug costs for seniors and individuals with disabilities who rely on Medicare for their prescription drug coverage. 2. Requiring drug manufacturers to provide rebates to Medicare if they increase the price of their drugs faster than inflation. This provision is intended to hold pharmaceutical companies accountable for price increases and prevent them from unfairly raising prices. 3. Establishing a $2,000 out-of-pocket cap on prescription drug costs for Medicare beneficiaries. This cap would provide financial relief for individuals who face high drug costs and help ensure that they can afford the medications they need. 4. Requiring drug manufacturers to provide more transparency on their pricing practices, including disclosing the costs of research and development, marketing, and profits for each drug. This provision aims to increase transparency in the pharmaceutical industry and help consumers better understand why drug prices are so high. Overall, the Lowering Drug Costs for American Families Act seeks to address the issue of high prescription drug prices by increasing transparency, promoting competition, and providing relief for Medicare beneficiaries. The bill is currently being considered by the House Energy and Commerce Committee.
Congressional Summary of HR 4895
Lowering Drug Costs for American Families Act
This bill expands the Medicare Drug Price Negotiation Program to include additional drugs and drugs that are covered under private insurance. It also extends certain rebate requirements for covered drugs under Medicare to drugs that are covered under private insurance.
Current law requires the Centers for Medicare & Medicaid Services (CMS) to negotiate maximum prices for brand-name drugs that do not have other generic equivalents and that account for the greatest Medicare spending; the CMS must eventually negotiate the prices of 20 drugs that are covered under Medicare in 2029 and each year thereafter.
The bill requires the CMS to negotiate the prices of 50 drugs beginning in 2029. It also applies the negotiated maximum prices under the program to drugs that are covered under private health insurance, unless the insurer opts out. The CMS, Department of Labor, and Department of Treasury must publish a list of insurers that choose to opt out; insurers must also publicly disclose their decision to opt out.
Current law also requires drug manufacturers to issue rebates to the CMS for brand-name drugs without generic equivalents under Medicare that cost $100 or more per year per individual and for which prices increase faster than inflation. The bill extends these requirements to drugs that are covered under private insurance.
