One proposed alternative that could comply with the Byrd rule is to impose an excise tax on drug companies that set prices in the employer market above the negotiated rate. (Photo: Shutterstock)
A plan by Senate Democrats to lower prescription drug prices may not include the roughly 150 million people with employer-provided health insurance, "The Hill" reported.
The secretary of Health and Human Services would be allowed to negotiate lower drug prices under the legislation, which is part of a proposed $3.5 trillion spending package. The House bill would apply these prices not only to seniors on Medicare but also to workers who get health insurance through their employers. In the Senate, however, the so-called "Byrd rule" requires that provisions have a sufficient impact on the federal budget. Lowering drug prices for people with private insurance does not have as direct of an impact on the federal budget as lowering Medicare prices.
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Excluding employer-provided care is raising concern among both progressive and employer organizations.
"Limiting the benefits of drug price negotiation to Medicare beneficiaries would leave tens of millions of Americans at the mercy of drug corporations' monopoly pricing," said Steve Knievel of Public Citizen.
James Gelfand, senior vice president for health policy at the ERISA Industry Committee, said employers would oppose the drug provisions in the bill unless the lower drug prices extend to the employer market. "If you can't find a way to protect the private sector, then the bill could mean explosive drug price increases for employers and working families," he said.
One alternative that his group is pushing that could comply with the Byrd rule is to impose an excise tax on drug companies that set prices in the employer market above the negotiated rate. Senate Finance Committee Chairman Ron Widen of Oregon, who is leading the Senate's drug pricing effort, has expressed support in the past for extending lower prices to the employer-sponsored insurance market. He is navigating delicate politics as he tries to find a balance between moderate and progressive Democrats in a 50-50 Senate, where the party cannot lose a single vote on the measure.
The Senate bill also is likely to leave out a provision to use the prices paid on drugs in other countries as a benchmark in the United States, an idea known as "international reference pricing." The bill instead could use a "domestic reference price," although the details on that proposal are not clear.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
