President Biden has taken historic action to reduce prescription drug costs for seniors and for working-age people who get health insurance through their jobs. Meanwhile, Congressional Republicans are actively fighting to roll back the reforms the President signed into law and to keep Big Pharma’s taxes low.
Congressional Republicans’ agenda for Big Pharma giveaways includes:
Repealing prescription drug inflation rebates. The Inflation Reduction Act (IRA) cuts costs for Medicare and seniors by requiring pharmaceutical companies to pay a rebate to Medicare if they increase prices faster than inflation. Dozens of Republicans have signed onto legislation that would revoke the rebate requirement.
By 2031, repealing this provision would:
- Cost seniors $5 billion per year.
- Increase federal deficits by $7 billion per year.
- Give away over $10 billion per year to pharmaceutical companies.
Taking away Medicare’s ability to negotiate prescription drug prices. The IRA finally gave Medicare the authority to directly negotiate with drug companies on the high prices they charge for prescription drugs. Republican Chairs and Ranking Members of the committees with jurisdiction over Medicare have publicly committed to repealing this authority, which would allow Big Pharma to go back to charging seniors exorbitant prices for life-saving drugs.
By 2031, repealing this provision would:
- Cost seniors $7 billion per year.
- Increase federal deficits by $14 billion per year.
- Give away over $20 billion to pharmaceutical companies per year.
Opposing caps on insulin prices. Monthly insulin costs for Medicare beneficiaries are now capped at $35—providing certainty and critical cost savings for seniors who in some cases were paying as much as $400 for a month’s supply of insulin. The Republican Study Committee budget, as well as the House Budget Committee-passed budget plan, propose to repeal this and other IRA drug price reforms.
Repealing this provision would mean the 1.5 million Medicare beneficiaries who use insulin could see their annual costs rise by an average of $500.
Protecting Big Pharma’s ability to avoid paying taxes. President Biden negotiated a historic agreement with over 130 countries that would enable the U.S. and its partners to ensure Big Pharma and other multinationals pay at least a minimum tax rate and has proposed that the U.S. implement that agreement with a 21% minimum tax rate on multinationals. Congressional Republicans are not only blocking the U.S. from implementing the global minimum tax agreement and vowing to never raise taxes on Big Pharma and other multinationals by implementing it, they also traveled to Europe this summer to try to persuade other countries to withdraw from the global agreement and keep taxes low for Big Pharma and other multinationals.
Blocking implementation of the President’s international tax reform proposals means:
- Protecting a system in which Big Pharma can lower its taxes to under 12% by shifting profits offshore.
- The U.S. would lose out on hundreds of billions in savings from adopting the President’s proposals to implement the international agreement. Based on a PhRMA-funded analysis, nearly $100 billion of the savings – or almost one-fifth of the total revenue – from implementing the President’s 21% minimum tax proposal would come from cracking down on pharmaceutical industry tax avoidance.
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