Drug Price Increases

Some recent proposals to lower prescription drug costs would require drug manufacturers to pay a rebate to the federal government if their prices for drugs covered under Medicare Part B and Part D increase by more than the rate of inflation. This proposal is included in recent legislation passed by the Senate Finance Committee (S. 2543, Prescription Drug Pricing Reduction Act of 2019) and introduced by Speaker Pelosi in the House of Representatives (H.R. 3, Lower Drug Costs Now Act of 2019). The Administration's FY2020 budget includes a related proposal that applies only to drugs covered under Part B. (See Table 1 for a comparison of these proposals.) The Medicaid program currently has a similar policy in place.