March 2, 2024

A Senate lawmaker scaled back a Democratic plan to curb drug prices but left it largely intact Saturday, Democrats said, as party leaders prepared to begin moving their sweeping finance bill through the chamber.

Elizabeth MacDonough, the chamber’s rules arbitrator, said provisions that would force pharmacists to pay rebates if their prices rise above inflation for products they sell to private insurers should be removed.

But drug companies would have to pay those penalties if their prices for drugs bought by Medicare rise too much.

Other parts of the legislation, such as letting Medicare negotiate the cost of the drugs it buys, capping seniors’ costs and providing free vaccines, all survived.

“This is an important victory for the American people,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement. “While there was an unfortunate decision that the inflation discount is more limited in scope, the overall program remains intact and we are one step closer to finally taking on Big Pharma and lowering Rx drug prices for millions of Americans.”

Eliminating penalties on pharmaceutical companies for raising prices on private insurers will reduce incentives for pharmaceutical companies to limit the prices they charge. That would increase costs for patients and reduce the $288 billion in 10-year savings estimated to be generated by the Democrats’ comprehensive drug restrictions.

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