Senate Democrats advance plan to give Medicare drug price negotiation powers: 6 notes

U.S. Senate Democrats reached a legislative agreement June 6 that would allow Medicare to negotiate the cost of prescription drugs starting next year.

Though unlikely to receive Republican support, Democrats are aiming to use a budget reconciliation process that allowed them to pass the $1.9 trillion American Rescue Plan Act last year. Republicans used the same process to pass a 2017 tax cuts package and an attempted repeal of the ACA, according to the Nevada Current.

The reconciliation process avoids the Senate's 60-vote threshold and requires approval from the Senate parliamentarian. If approved, the legislation would go to the Senate floor for debate, amendments and a final vote.

Senate Majority Leader Chuck Schumer said his goal is to hold a vote as early as this month. AARP has said it is in favor of the proposal.

Six things to know:

  1. Starting in 2025, there would be monthly caps on cost-sharing amounts for prescription drugs under Medicare Advantage and Part D plans.

  2. There would be a $2,000 cap on Medicare enrollees' annual out-of-pocket costs.

  3. HHS would choose 10 drugs eligible for negotiation in 2026, 15 drugs in 2027 and 20 drugs in 2029. 

  4. The deal would repeal a Part D rebate rule and replace safe harbor rebate exemptions with point-of-sale chargeback discounts.

  5. For single-source drugs and biologicals that have prices rising faster than inflation, a cap on Part B and D manufacturer rebates would go into effect.

  6. The deal would provide vaccines to Medicare recipients at no cost and expand copay assistance for some low-income recipients.

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