Welch-Championed Policy Will Lower Prescription Drug Prices

Press Release

The Centers for Medicare and Medicaid Services (CMS) at the Department of Health and Human Services (HHS) has finalized new policies to provide more affordable access to prescription drugs for the 53 million Americans enrolled in Medicare Part D plans. Rep. Peter Welch (D-VT) has long-championed these bipartisan commonsense policy reforms to create cost-savings for Medicare enrollees. These changes will also create savings for local community pharmacies, which provide essential services in rural communities.

The policy requires that Medicare Part D plans pass along price concessions received from pharmacies at the point of sale. Currently, pharmacy direct and indirect renumeration (DIR) fees are applied arbitrarily after the point of sale and increase patients' out-of-pocket costs for drugs. Pharmacy DIR fees have grown at the hands of third-party "middlemen" (Pharmacy Benefit Managers) by more than 107,400 percent between 2010 and 2020. Bringing these fees to the point-of-sale is expected to reduce seniors' out of pocket prescription drug costs by $21.3 billion over 10 years.

"It is unacceptable that 18 million Americans struggle to afford their prescriptions," said Rep. Welch. "No one should have to go without vital medication because they can't afford it. But that happens every day in Vermont and across the country. This policy change will create real savings for Medicare enrollees and ensure more folks can afford the medications they need to stay healthy and well. There's more work to do to ensure all Americans get the care they need, and I'll keep fighting for more common-sense policies that increase health care access and affordability."

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