Wide range of US drug cost savings proposed in Bill introduced by Senator Kohl

US Senator Herb Kohl (Democrat, Wisconsin), Chairman of the US Senate Special Committee on Aging, last week introduced legislation seeking a wide range of drug cost cuts, including a proposal to require drug manufacturers to provide Medicare Part B with the same discounts Medicaid receives, saying his: “Prescription Drug Cost Reduction Act provides a number of opportunities to significantly reduce the cost of health care without pushing those costs onto consumers or limiting access to care.”

Sen Kohl’s Bill includes six cost-cutting policies that were considered as part of a Senate Special Committee on Aging hearing in July as well as language that would require drug manufacturers to provide Medicare Part B with the same rebates Medicaid receives. However, Sen Kohl’s Bill would apply to fewer drugs than other Democratic proposals. While lawmakers including Representative Henry Waxman (Democrat, California) have proposed major cuts in the cost of drugs under Medicare Part D, while Sen Kohl's bill would cut costs for drugs administered by a doctor.

According to an analysis done by Department of Health and Human Services Office of Inspector General (HHS OIG) at Sen Kohl’s request, up to $2.4 billion would have been saved on just the 20 costliest drugs last year if the manufacturers of Medicare Part B drugs had been required to pay the same rebates required under Medicaid. These savings represent up to 26% of the $9.2 billion that Medicare and its beneficiaries paid for the 20 drugs in 2010. The HHS OIG analysis can be found here.