CBO: Pelosi bill to lower drug prices saves Medicare $345 billion

A preliminary analysis from the nonpartisan Congressional Budget Office (CBO) finds that the core provision of Speaker Nancy PelosiNancy PelosiGiuliani pens op-ed slamming 'unprecedented' impeachment inquiry Brindisi, Lamb recommended for Armed Services, Transportation Committees Overnight Health Care: Top health official defends contract payments to Trump allies | Vaping advocates confident Trump will turn from flavor ban | Sanders gets endorsement from nurses union MORE’s (D-Calif.) signature bill to lower drug prices would save Medicare $345 billion between 2023 and 2029.

Democrats quickly touted the projected savings to show that their bill would effectively lower drug prices. 

ADVERTISEMENT
House Democrats are steaming forward on the bill, and hope to bring it to a vote in the House as soon as the end of the month. The measure is one of their top priorities, and one they have touted as showing they are focused on kitchen table issues even as they pursue an impeachment inquiry against President TrumpDonald John TrumpTrump faces high stakes in meeting with Erdoğan amid impeachment drama Democrats worry they don't have right candidate to beat Trump Trump threatening to fire Mulvaney: report MORE

The analysis is preliminary and does not take into account the entire bill, but it does analyze its main provision, which would allow the secretary of Health and Human Services to negotiate lower prices on up to 250 drugs per year, with savings applied to both Medicare and people on private insurance plans. 

Republicans countered by pointing to another part of the CBO’s analysis, which found that the measure would reduce research and development of new drugs. The CBO estimate that drug companies’ revenues would be reduced by between $500 billion and $1 trillion over 10 years, leading to eight to 15 fewer new drugs coming to market over the next 10 years, out of about 300 total new drugs over that period.

“In the short term, lower prices would increase use of drugs and improve people’s health,” the CBO wrote. “In the longer term, CBO estimates that the reduction in manufacturers’ revenues from title I would result in lower spending on research and development and thus reduce the introduction of new drugs.”

The resulting effect is not certain, the agency wrote. “The overall effect on the health of families in the United States that would stem from increased use of prescription drugs but decreased availability of new drugs is unclear,” the CBO wrote. 

The bill would also likely result in lower premiums for people with private insurance, the CBO wrote, though it said it is still working on a more complete analysis of the bill. 

“This initial analysis proves that H.R. 3 will effectively rein in the soaring cost of prescription drugs and level the playing field for American patients,” three House Democratic chairmen, Reps. Frank Pallone Jr.Frank Joseph PalloneDemocrats demand FCC act over leak of phone location data Democrats say they're waiting for nearly 50 requests for Trump info on science, environment Trump pressed to follow through on vaping crackdown MORE (N.J.), Richard NealRichard Edmund NealJudge sides with NY officials in Trump tax return lawsuit On The Money: US paid record .1B in tariffs in September | Dems ramp up oversight of 'opportunity zones' | Judge hints at letting House lawsuit over Trump tax returns proceed Judge hints at letting House lawsuit over Trump tax returns proceed MORE (Mass.) and Bobby ScottRobert (Bobby) Cortez ScottEducation Department finalizes new regulations to relax college-accreditation requirements Trump admin gave over million in aid to students at unaccredited for-profit colleges CBO: Pelosi bill to lower drug prices saves Medicare 5 billion MORE (Va.) said in a statement, referring to the bill’s formal title. “Not only will H.R. 3 save consumers money, it will also provide tremendous savings to American taxpayers.”

In addition, an analysis of the bill from the federal Centers for Medicare and Medicaid Services' actuary found that the bill would save American households $158 billion over 10 years through lower premiums and out of pocket spending on drugs, and that total U.S. spending on health care would decline by $480 billion under the bill.

Rep. Kevin BradyKevin Patrick BradyHow centrist Dems learned to stop worrying and love impeachment On The Money: Senate passes first spending package as shutdown looms | Treasury moves to roll back Obama rules on offshore tax deals | Trade deal talks manage to weather Trump impeachment storm White House talking new tax cuts with GOP MORE (Texas), the top Republican on the Ways and Means Committee countered Friday: “CBO’s report confirms House Democrats’ ‘dictate or destroy’ price controls only serve to hurt the development of future cures and damage American innovation.”

Congressional Republicans have said they want to work with Democrats on much smaller drug pricing legislation, for example speeding the introduction of cheaper generic drugs. Rep. Greg WaldenGregory (Greg) Paul WaldenMicrosoft embraces California law, shaking up privacy debate Hillicon Valley: Schumer questions Army over use of TikTok | Federal court rules against random searches of travelers' phones | Groups push for election security funds in stopgap bill | Facebook's new payment feature | Disney+ launch hit by glitches Retirements pose threat to cybersecurity expertise in Congress MORE (R-Ore.), the top Republican on the House Energy and Commerce Committee, said there are other bills "already agreed to by Republicans and Democrats" that could pass. Republicans have denounced Pelosi’s measure, in contrast, as “socialist.”

Pelosi is still hoping that if Trump, who has railed against high drug prices, endorses the bill, it would put pressure on congressional Republicans. Still, the measure faces dim hopes in the Senate, where Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellMcConnell protege emerges as Kentucky's next rising star Hillicon Valley: Schumer questions Army over use of TikTok | Federal court rules against random searches of travelers' phones | Groups push for election security funds in stopgap bill | Facebook's new payment feature | Disney+ launch hit by glitches McConnell, GOP leaders say they won't be watching House impeachment hearing MORE (R-Ky.) has vowed to block it.