Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) joined U.S. Senator Ron Wyden (D-Ore.) to support two pieces of legislation that will help increase transparency in drug pricing and to rein in the skyrocketing costs of prescription drugs. The Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act would require drug manufactures to publicly justify large price increases in prescription drugs. The Reducing Existing Costs Associated with Pharmaceuticals for Seniors (RxCAP) Act would protect seniors in Medicare from high costs in Part D plans by eliminating all cost-sharing for beneficiaries above the current $7,500 out-of-pocket spending threshold.
“Rising drug prices are hurting Nevada families, children and seniors who are struggling to afford the medications they need to stay healthy. Drug manufacturers need to be held accountable for outrageous price increases, and seniors on Medicare deserve the same protection from high out-of-pocket expenses that those with other types of coverage receive. These laws are common sense steps that will increase transparency in prescription drug pricing and help patients across the country afford life-saving medicine and care.”
BACKGROUND:
The Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act would require manufacturers to report detailed information to the Secretary of the Department of Health and Human Services (HHS) for certain drugs if their prices exceed certain thresholds. Drug manufacturers would be required to submit a justification that explains the causes of a price increase or high launch price, which could include information on expenses pertaining to developing, manufacturing, licensing, and marketing the drug. In a Senate Finance Committee hearing in February, pharmaceutical executives indicated to Senator Cortez Masto that they would be supportive of increased price transparency of this nature. In 2017, the State of Nevada passed similar legislation which requires drug manufactures to publically justify price increases on insulin.
The Reducing Existing Costs Associated with Pharmaceuticals for Seniors (RxCAP) Act would eliminate all cost-sharing for Medicare beneficiaries once they reach the catastrophic phase. Thanks to the Affordable Care Act, out-of-pocket costs are capped in most commercial health insurance plans. However, there is no limit to out-of-pocket costs in traditional Medicare. In 2015, over a million seniors paid more than $3,000 in Part D, and 100,000 seniors paid more than $5,200. Under Sen. Wyden’s bill, a senior enrolled in a Part D prescription drug plan who takes exclusively brand name drugs would hit the new out-of-pocket limit for prescription drugs after spending roughly $2,650 during the calendar year. Seniors would not pay anything above that amount.
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