Workers and families with private health insurance would reap savings on prescription drugs from a little-noticed provision in President Joe Biden’s sweeping social agenda bill. It’s meant to break the cycle of annual price increases for widely used medicines.
That provision would require drug companies to pay rebates to Medicare if they increase prices above the rate of inflation. Drugs sold to private plans would count in calculating the penalty, like a tax on price increases. The issue is dividing business groups in a fierce lobbying battle.
Corporate groups focused on affordable employee benefits want to keep the language as is so it would provide price-increase protection for companies and their workers and not just Medicare enrollees. Other groups such as the influential U.S. Chamber of Commerce are backing the pharmaceutical industry’s drive to block restraints on pricing, including inflation caps, saying they would stifle innovation.
House Democrats passed the