The National Committee to Preserve Social Security and Medicare has endorsed the Medicare Drug Savings Act introduced today by Senators Jay Rockefeller (D-WV), Tammy Baldwin (D-WI), and Angus King (I-ME). This legislation would require drug manufacturers to pay rebates to the federal government for the drugs provided by Medicare to low income seniors. Drug manufacturers provided rebates for the dual eligible population prior to the enactment of the Medicare Modernization Act of 2003.

“Reinstating drug rebates, which existed for America’s low-income beneficiaries prior to the creation of Part D, is a common sense reform.  It’s a win-win proposal which provides $141 billion in savings to the federal government, according to the Congressional Budget Office (CBO).  At a time when too many in Washington are proposing draconian benefit cuts to seniors who can least afford it, this proposal stands out as a reform which tackles the issue of cost beyond simply shifting those expenses to seniors.” …Max Richtman, NCPSSM President/CEO

Specific provisions included in the Medicare Drug Savings Act are:

Participation.  Drug manufacturers would enter into rebate agreements with Medicare, beginning January 1, 2015.  They would be required to participate in the rebate program in order for their drugs to be covered by Part D. 

  • Rebate Determination.  Drug manufacturers would pay the difference between the lowest current rebate they are paying to private Part D drug plans, and the percentage of Average Manufacturer Price (AMP) that they are currently paying under Medicaid.  They would pay an additional rebate if prices rise faster than inflation.  These rebates would not be used to calculate the Medicaid best price or Average Manufacturer Price.
  • Reporting.  Drug manufacturers would have to adhere to reporting requirements for the determination and payment of their rebates.  There would be penalties for non-compliance.
  • Deposits.  Drug manufacturers’ rebates would be deposited into the Medicare Part D prescription drug account.



The National Committee, a nonprofit, nonpartisan organization acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the Board of Directors and professional staff. The work of the National Committee is directed toward developing better-informed citizens and voters.


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Pamela Causey 202-216-8378/202-236-2123

Kim Wright 202-216-8414