American workers and families with private health insurance will be able to save on prescription drugs thanks to a little-known provision in President Joe Biden’s broad social agenda bill. Its objective is to break the cycle of annual increases in the prices of the most used drugs.
The provision would force drug companies to pay reimbursements to the federal Medicare program if their drug prices rise above the rate of inflation. Medicines sold in private plans would include the penalty as if it were a tax on the price increase. The issue is dividing business groups in a strong political pressure battle.
Business groups focused on affordable employee benefits want to keep the language the way it is, so that it provides protection against price increases for businesses and their workers, and not just for Medicare enrollees. Other groups, such as the influential Chamber of Commerce, support the pharmaceutical industry’s initiative to block price restrictions, including inflation caps, claiming they would stifle innovation.
House Democrats approved the roughly $ 2 trillion social agenda proposal on Friday and sent it to the Senate. The initiative restores national priorities on issues ranging from climate to family life and faces increased scrutiny in the equally divided upper house. Prescription drugs are just one component, and most of the attention has focused on Medicare provisions to reduce out-of-pocket costs for the elderly and allow the program to negotiate prices for a limited number of drugs. .
But inflation caps would have a far-reaching impact on as many as 180 million Americans with private insurance.
“Many people don’t realize that the bill applies and will help private policyholders,” said Shawn Gremminger, director of health policy at the Purchaser Business Group on Health. “But that is not a sure thing. As currently structured, that would be the scenario. But we’ve been concerned and will continue to worry that that will change. ‘ His coalition represents almost 40 large companies that cover more than 15 million workers, retirees and their families.