Menendez advocates to reduce prescription drug costs for seniors during finance markup on Better Mental Health Care, Lower-Cost Drugs, & Extenders Act
During the markup, the Senator also addressed the importance of addressing the growing national physician shortage by increasing the number of Medicare-funded GME positions
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.) Wednesday participated in a Senate Finance Committee open Executive Session to consider the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act, which seeks to reduce the cost of prescription drugs for senior adults on Medicare among many other policy objectives.
Sen. Menendez partnered with Sen. James Lankford (R-Okla.) to offer an amendment, a tailored version of their Ensuring Access to Lower-Cost Medicines for Seniors Act, to the bill that would address the Pharmacy Benefit Manager (PBM) practice of placing lower cost drugs on the same price “tier” or a less preferred “tier” than their name-brand counterpart, which keeps costs high for senior adult patients at the counter by blocking their access to these lower-cost products.
“Under the current PBM and Medicare Part D plan structure, often a biosimilar drug – which should come with a lower price tag at the pharmacy counter – actually costs as much or more than the brand name drug product. That is, if the drug is even covered by insurance at all. Currently, many contracts explicitly block coverage for the most affordable biosimilars. That’s just not right,” Menendez said. “My amendment with Senator Lankford will ensure seniors can finally benefit from lower-cost biosimilars instead of being forced to pay for higher-priced drugs solely because of pricing tactics used by the drug pricing administration. I also appreciate the Chair and Ranking Member’s commitment to including these provisions in the PBM package the Committee moves to the floor.”
“Based on the evidence that we have seen going through this from the HHS OIG and from others that have examined this, I expect this policy to actually come back and save the government money because it drives down patient costs, and it continues to drive down net prices as the branded price has to compete with the lower-cost biosimilar,” Lankford said. “Simply stated, this would allow for when a new biosimilar comes on board, if its net price is significantly cheaper – and we’re basing that off what’s called the wholesale acquisition cost – it allows that to actually be on the formulary so we’re actually increasing the competition, rather than biosimilars being forced out to the benefit of branded higher-price drugs that we actually increase competition. It’s the basic principle of: we want more competition, not less. We want more options for seniors, not less on this.”
Earlier this year, Sens. Menendez and Lankford introduced the Ensuring Access to Lower-Cost Medicines for Seniors Act to ensure that patients can finally benefit from lower-cost products instead of being forced to pay for higher-priced drugs solely because of pricing gimmicks used by PBMs, the drug pricing middlemen. Both senators will continue working with Senate Finance Chairman Ron Wyden (D-Ore.) and Ranking Member Mike Crapo (R-Idaho) to ensure that the bill is ultimately added to the final PBM package the Committee moves to the Senate floor.
During Wednesday’s markup, Sen. Menendez also spoke about several efforts he’s leading alongside several of his Senate colleagues to reduce the growing national physician shortage by increased Medicare-supported graduate medical education (GME) positions. The Senator has long led bipartisan efforts to address the ongoing doctor shortage, which was only further exacerbated by the COVID-19 pandemic. Sen. Menendez also spoke the importance of extending funding levels for Family-to-Family Health Information Centers, which provide critical services for families of children with disabilities or special health care needs.
Sen. Menendez has long advocated for creating a more affordable health care system for every New Jerseyan and Americans across the country. Last year, he helped pass the Inflation Reduction Act, which capped the price of insulin at $35 a month for seniors on Medicare, and he authored a provision that also capped Medicare beneficiaries’ out-of-pocket costs at $2,000 a year.
In June, Sen. Menendez, alongside Sens. Marsha Blackburn (R-Okla.), Ron Wyden (D-Ore.), Mike Crapo (R-Idaho), Jon Tester (D-Mont.), and Roger Marshall (R-Kan.), led the introduction of the Patients Before Middlemen (PBM) Act that will delink the compensation of PBMs from drug prices in order to better align incentives that will help lower the cost of prescription drugs for Medicare Part D beneficiaries. In July, they successfully advanced the legislation out of the Senate Finance Committee as part of the Modernizing and Ensuring PBM Accountability (MEPA) Act.
In March, Sen. Menendez questioned witnesses during a Senate Finance Committee about the impact PBMs have on the prescription drug supply chain and how their warped incentive structure drives up prices for patients and consumers. The Senator emphasized how PBMs prefer prescription drugs with a higher list price versus those with a lower list price because they can obtain larger rebates. PBMs do this even though the patient would pay significantly less if they selected the drug with the lower list price.
