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AHIP Issues Statement On Senate Finance Committee Drug Pricing And Coverage Proposals

posted by AHIP

on July 23, 2019

WASHINGTON, D.C. –  Matt Eyles, president and CEO of America’s Health Insurance Plans (AHIP), issued this statement as the Senate Committee on Finance considers prescription drug pricing and coverage proposals, such as establishing a “maximum out of pocket” limit (MOOP) for Medicare beneficiaries covered by Part D plans:

“All patients and consumers should be able to get the prescription drugs they need at a cost they can afford, especially seniors and people with disabilities who rely on Medicare. That’s why health insurance providers support proposals like capping out-of-pocket costs in Medicare Part D. We applaud the Committee for coming together in a bipartisan way, and we are encouraged by their efforts to advance policies that could save Medicare beneficiaries thousands of dollars a year while seeking to limit the impact on Part D premiums and taxpayer costs.

“We look forward to reviewing the details of the proposals and how they would impact the Medicare and Medicaid programs. Everyone knows one simple fact: Drug prices are out of control because Big Pharma alone sets launch prices, and they alone decide to raise those prices. They want to move as many seniors into the Part D catastrophic phase as quickly as possible, where drug makers currently pay nothing for the high prices they impose on seniors and taxpayers.

“Giving Big Pharma meaningful liability and accountability for their high drug prices is essential for keeping premiums low for seniors and reducing costs for taxpayers.  It’s time to give drug makers some more skin in the game and eliminate the perverse incentives to set their prices high – and keep them high.

“We are ready to work with all members of Congress and the Administration on this and other proposals to protect seniors and taxpayers from out-of-control drug costs.”

About the Part D Catastrophic Phase and a MOOP

The Part D “catastrophic” phase was designed to protect enrollees who aren’t eligible for low-income subsidies. Once they reach a certain spending threshold ($6,350 in 2020), they only pay 5% of their drug costs the rest of the year. Fewer than 10% of seniors with Part D enter the catastrophic phase each year. But drug prices continue to rise, with prices for branded drugs that can exceed tens of thousands or hundreds of thousands of dollars. In addition, new drugs are coming to market with price tags of $1 million or more. A MOOP would put a hard cap on how much Part D enrollees pay in a year for their medications.