Brown Outlines Three-Point Plan to Reduce Deficit Through Negotiation of Rx Drug Costs, Reimportation of Rx Drugs from Canada, Increasing Access to Less Expensive Generic Drugs
WASHINGTON, D.C. – Today, U.S. Senator Sherrod Brown (D-OH) held a news conference outlining his three-point plan to reduce the deficit by lowering prescription drug costs for consumers and taxpayers. Brown, who chairs the Finance Subcommittee on Social Security, Pensions and Family Policy, also released a county-by-county report showing how reforms made through the health law have already saved nearly 179,000 Ohio seniors a combined $138.5 million on their prescription drug costs in 2012, with the average beneficiary saving $774. Since 2010, Ohio seniors have saved a combined $278,731,176.
“There is no reason why we can’t make prescription drugs more affordable for every Ohioan and reduce Federal spending at the same time,” said Brown. “I will continue to fight for common sense solutions to lower the national deficit while reducing consumer costs and increasing access to high quality prescription drugs.”
Brown’s three point plan to reduce the deficit by lowering prescription drug costs for consumers and taxpayers includes:
1. Allowing the Department of Health and Human Services to negotiate volume discounts on prescription drugs for Medicare, saving the Federal government $240 billion over 10 years.
- In 2011, Medicare spent $67 billion subsidizing prescription drugs as a part of the Part D program. If applied to Medicare, the negotiating tactics used by other federal agencies, including the Department of Veterans Affairs, would significantly lower the cost of prescription drugs. A recent study found that the Department of Veterans Affairs was able to get the 10 most prescribed drugs at costs that were nearly 50 percent lower than what Medicare pays for them.
2. Allowing the safe reimportation of prescription drugs from Canada and Australia which would reduce federal direct spending by $5.4 billion.
- The safe reimportation of prescription drugs from countries with rigorous safety standards such as Canada and Australia represent steps that would reduce Medicare costs while strengthening the program. According to a 2007 Congressional Budget Office report, enacting the Pharmaceutical Market Access and Drug Safety Act would increase federal revenues by $5.2 billion – and reduce federal direct spending for prescription drugs by $5.4 billion.
3. Reducing the exclusivity period for biologic drugs could save consumers and the American health care system more than $3.5 billion over the next decade.
- Unlike chemical drugs, biologic drugs refer to a category of drug derived from a living organism – which treat conditions like breast cancer, multiple sclerosis, and rheumatoid arthritis – and are often significantly more expensive. For example, Avastin, which treats cancers, reportedly costs more than for $4,400 for one month’s treatment, while the Centers for Medicare and Medicaid Services (CMS) spends approximately $2 billion per year on Epogen, a drug used to treat anemia. Biologic drugs also represent the fastest growing subset of pharmaceuticals, expected to make up half of the drugs on the world’s top 100 drugs list within the next five years. Until the health law, there was no pipeline for the approval of generic version of biologic drugs, and the final provision contained in the health law gave an overly-generous exclusivity period to name-brand drug manufacturers. By reducing the monopoly period that name-brand manufacturers receive from 12 years to seven years, we could save more than $3.5 billion over the next decade.
Brown has been a leader on efforts to ensure that Ohioans can afford needed prescription drugs. He is also a cosponsor the Prescription Drug and Health Improvement Act which could save up to $24 billion annually. In 2011, Medicare spent $67 billion subsidizing prescription drugs as a part of the Part D program. The legislation would allow Medicare to adopt negotiating tactics used by other federal agencies, including the Department of Veterans Affairs; a recent study found that the agency was able to get the 10 most prescribed drugs at costs nearly 50 percent less than Medicare.
Also participating in the news conference was Marlette Louisin, a senior from Akron who discussed her family’s prescription drug costs and the money she has saved by having her donut hole partially closed thanks to the health law.
“I thank Senator Brown for continuing his efforts to provide me and my family high-quality and affordable prescription drugs,” said Louisin. “This new report is an example of the work Senator Brown is doing in Congress on behalf of all Ohioans. Because of health reform my donut hole has closed by half and will be fully closed by 2020.”
Brown released a county-by-county report from CMS which outlined savings in drug costs for Americans who enter the drug coverage gap in private Medicare Part D coverage, also known as the “donut hole.” Until the passage of the health law, seniors who entered the donut hole by exceeding the prescription drug coverage limit were left responsible for paying 100 percent of their drug costs until catastrophic coverage kicks in. Since the Coverage Gap Discount Program began on January 1, 2011 as a part of the ACA, CMS has been analyzing data to understand the total number of beneficiaries receiving a reduction in out of pocket drug costs in each state and for how much.
Brown held several events in 2011 educating seniors about new prescription drug benefits available to them through the health care reform law. In 2011, the law provided Medicare beneficiaries with a 50 percent discount on brand-name prescription drugs and biologics if they enter the donut hole. Discounts increase every year until 2020, when the donut hole will be completely closed and beneficiaries will only be responsible for the plan’s copayment or co-insurance payment rather than the full 100 percent that they were paying prior to 2011.
In January 2011, Brown and a bipartisan group of U.S. Senators urged the Food and Drug Administration (FDA) to ensure timely access to generic biologic drugs for consumers and reject efforts to further block or delay affordable generic competition. The Senators asked the FDA to disregard efforts which, if implemented, would needlessly delay consumers’ access to generic biologics – drugs that make up an increasingly-large share of the market and treat diseases and conditions such as cancer, Multiple Sclerosis, and rheumatoid arthritis. The letter, sent to FDA Commissioner Margaret Hamburg, was led by U.S. Sen. Sherrod Brown (D-OH) and signed by Senators John McCain (R-AZ), Charles Schumer (D-NY), and Tom Harkin (D-IA).