Generic Drugs Lawsuit

This file photo shows prescription drugs in a glass flask at the state crime lab in Taylorsville, Utah.  (AP Photo/Rick Bowmer, File)

On Thursday, the U.S. House of Representatives passed by a vote of 230-192 the Elijah E. Cummings Lower Drug Costs Now Act, which seeks to reduce drug prices by empowering the federal government to negotiate directly with manufacturers.

Among Colorado’s representatives, all four Democrats voted yes, while the three Republicans voted no. The bill is named after the late Democratic congressman from Baltimore who died this fall.

The U.S. Secretary of Health and Human Services would bargain with pharmaceutical companies over selected drugs, such that the price paid does not exceed 120% of that paid in six reference countries, which include the United Kingdom, France and Canada. Drug companies that refuse to participate would pay a tax.

Among other drugs not covered by the negotiation, there would also be a new mechanism to control the increase in drug prices, with manufacturers paying a rebate to the federal government if they exceed the rate. That provision stemmed from the Freedom from Price Gouging Act, a piece of legislation that U.S. Rep. Jason Crow introduced separately in October.

“If this legislation is passed, up to 300,000 Coloradans will pay one-third on their insulin medications from what they’re paying now,” Crow said on a conference call with reporters earlier in the week. “We also know that the 400,000 Coloradans who suffer from asthma are going to pay one-fifth of what they’re currently paying for drugs.”

He said that the rebate money would go toward innovation of new drugs. In a related transparency provision, drug companies would have to report on the amount they spent developing the drug, as well as their profits.

The Congressional Budget Office found that the legislation would decrease the federal deficit by $5 billion over 10 years.

Seniors on Medicare would also have their prescription drug out-of-pocket costs capped at $2,000 annually. U.S. Rep. Ben Ray Luján, D-N.M., when asked on the call why that cap would not apply to all Americans, said that “there’s always more that we can do. But in the end, the constituents across America will all benefit from lower negotiated drug costs overall.”

In other miscellaneous provisions, the bill would provide $9 billion in drug research and development money, as well as $10 billion for the government’s response to the opioid epidemic.

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