Waxman and Stark Urge Support for Legislation to Save More than $100 Billion in Medicare Drug Costs

Jul 28, 2011

Today Representatives Henry A. Waxman and Pete Stark sent a letter to their Congressional colleagues urging support for the Medicare Drug Savings Act of 2011. The letter responds to a number of false claims by the bill’s opponents and urges for support for the legislation that would save the government billions by reducing Medicare Part D drug costs for taxpayers. The bill would save more than $100 billion – without resorting to the Republicans’ reckless proposal to double seniors’ health care costs by 2022 by dismantling Medicare.

The Medicare Drug Savings Act of 2011 (H.R. 2190) will eliminate a sweetheart deal for brand-name drug manufacturers that allows them to charge Medicare higher prices for millions of low-income enrollees in the Medicare Part D program.  Prior to 2006, the government received substantial rebates on drugs used by “dual eligible” Medicare and Medicaid enrollees.  However, beginning in 2006, the Republicans’ Medicare Part D law eliminated these rebates, dramatically raising prices for the government and profits for manufacturers.  The Part D deal resulted in a substantial drug manufacturer windfall.  The bill eliminates the windfall and requires that manufacturers pay the rebates for dual eligible and low-income Part D enrollees, ensuring that taxpayers and the Medicare program do not overpay for Part D drugs.   

The letter sent to Congressional colleagues is below and available for download here.

See also, an additional letter here in support of the Medicare Drug Savings Act of 2011 from Dr. Gerard Anderson, Director of Johns Hopkins Center for Hospital Finance and Management.