March 15, 2017
The Honorable Al Franken
309 Hart Senate Office Building
Washington, DC 20510
Dear Senator Franken:
On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I write to endorse your legislation, S.348, the Prescription Drug and Health Improvement Act of 2017. Recent polling conducted for the National Committee by Lake Research Partners confirms popular support for your legislation. Our poll found overwhelming bipartisan approval for allowing Medicare to negotiate with drug manufacturers to lower prescription drug costs. Ninety-three percent of likely voters support providing this authority to the Medicare program.
Among other things, your proposed legislation:
- permits Medicare to negotiate directly with manufacturers;
- allows the Secretary of the Department of Health & Human Services to obtain the same prices for drugs as the Department of Veterans Affairs (or other government programs that use the Federal Supply Schedule) when negotiations with drug manufacturers fail; and
- allows prescription drug plan and Medicare Advantage (MA) plan sponsors to negotiate lower drug prices than what the Secretary obtains if they can.
These provisions would arm Medicare with powerful tools to bring down rising Part D drug costs and provide seniors with some relief from high out-of-pocket costs. According to the Department of Health and Human Services Office of the Inspector General (OIG), federal payments for catastrophic coverage—which begins once beneficiaries’ costs exceed the donut hole—more than tripled from 2010 to $33 billion in 2015. According to the OIG, this hike was due in part to a small number of very high cost specialty drugs. It is not just Medicare that pays for costs above the catastrophic cap; Part D enrollees pay 5% of the costs of drugs in the catastrophic phase. Some specialty drugs cost hundreds of thousands of dollars. As a result, beneficiaries taking one extremely high-cost drug or multiple specialty drugs can be hit with tens of thousands of dollars in out-of-pocket costs even while covered under Part D’s catastrophic benefit.
The National Committee enthusiastically supports the Prescription Drug and Health Improvement Act because it would help seniors with high drug costs and reduce costs for Medicare. Thank you for your leadership on this vital issue.
President and CEO