A tiny provision in the budget deal takes on soaring generic drug prices, which would hit companies that have been heavily criticized for raising prices.
The proposed budget deal announced Tuesday by Congress and the White House would include a provision that requires generic drug makers to rebate Medicaid if the cost of their drugs outpaces inflation. The deal would raise the debt limit until March 2017 and provides $90 billion in new spending through 2017.
To help offset the cost of the deal, it included the drug rebate provision, which would generate $12.2 billion over the next 10 years, according to the nonpartisan Congressional Budget Office.
The deal’s provision comes as Americans are increasingly frustrated with rising prices for generic and brand name drugs.
Turing Pharmaceuticals ignited a public outrage last month after it raised the price of its anti-parasite treatment Daraprim from $13.50 a pill to $750.
Valeant Pharmaceuticals also got into hot water over its pricing as lawmakers targeted recent spikes of more than 200 percent for two heart drugs.
The drug makers are able to raise the prices so much because the drugs are old and there is no competition, experts say.
The budget provision would require generic drug makers to pay the same inflation-based rebate as brand drug makers.
The generic drug industry, obviously, is not happy with the provision.
The proposal, which needs to clear the House and Senate, “will reduce patient access to affordable generic medicines,” said Chip Davis, president and CEO of the Generic Pharmaceuticals Association.
The generics trade group said the proposal could “eviscerate already strained state budgets and limit patient access to lower-cost generics.”
