The Senate Finance Committee voted down an amendment that would have forced pharmaceutical companies to offer the government a rebate on prescription drugs for some seniors—a move that would close a so-called “doughnut hole,” while freeing up $106 billion over 10 years.
Finance Committee rejects move for drug rebates
Under the amendment drafted by Sen. Bill Nelson (D-Fla.), drugmakers would have had to offer the federal government a rebate for beneficiaries who are poor enough to qualify for Medicaid but also old enough for Medicare. There are about 7.5 million of the so-called “dual eligibles” who qualify for the program. Three Democrats, including Committee Chairman Max Baucus of Montana, joined all 10 Republicans in killing the amendment, 10-13.
Nelson said he would bring it up again on the Senate floor, adding that if passed, it would create a $50 billion surplus—money that could offset the cost of a broad health reform bill now being debated by the committee.
The 2003 Medicare allowed those who received drugs within Medicaid to get a discount from the pharmaceutical companies. But if that person qualified as a dual eligible, the discount was lost, Nelson said.
Under a deal struck with Baucus and the White House, the pharmaceutical industry agreed to take $80 billion in cuts over the next decade. Part of that money would go to offer steep discounts for drugs in the coverage gap.
Sen. Chuck Grassley of Iowa, the senior Republican on the committee, said that drug manufacturers would have passed the cost off on consumers by charging higher prices for new drugs.
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