H.R. 1588, the "Medicare Drug Savings Act of 2013"

On April 16, 2013, Democratic leaders, Reps. Henry A. Waxman, Sander M. Levin, George Miller, Jim McDermott, and Robert E. Andrews introduced the Medicare Drug Savings Act.  The legislation would require prescription drug manufacturers to provide rebates for drugs provided to Medicare Part D low-income subsidy beneficiaries, including those who are dually eligible for Medicare and Medicaid.  The nonpartisan Congressional Budget Office (CBO) estimates that this bill would provide $141 billion in savings over the next decade.

Prior to 2006, the government received substantial rebates on drugs used by “dual eligible” Medicare enrollees.  However, beginning in 2006, the Medicare Part D law eliminated these rebates, dramatically raising prices for both the government and profits for manufacturers.  The Part D sweetheart deal resulted in a substantial drug manufacturer windfall at taxpayer expense.  The Medicare Drug Savings Act would eliminate the windfall and require that manufacturers provide Medicare Part D with the same low prices for drugs used by low-income seniors that the manufacturers provide to a comparable population in the Medicaid program.