Oct. 14 (UPI) -- A Democratic House proposal to reduce the cost of prescription drugs would save Medicare a total of $345 billion over 10 years, starting in 2023, an analysis by the nonpartisan Congressional Budget Office says.
The bill, titled the Lower Drug Costs Now Act, would reduce federal Medicare spending by that amount, the CBO report said. The proposal, however, still needs approval from the House, Senate and President Donald Trump.
House Speaker Nancy Pelosi and other Democratic leaders have worked on the proposal for months, and they expect a vote on the House floor as early as this month.
Under the plan, the health secretary would choose dozens of drugs each year from a list of the 125 most expensive medications for negotiation under Medicare Part D. If passed this year, the plan would take effect in 2023.
Insulin would be among the drugs for which prices would be negotiated in the first year, the proposal states.
The CBO said the plan would save $9 billion in the first year -- savings that would grow to $93 billion in 2028.
"The lower drug prices under the bill would immediately lower current and expected future revenues for drug manufacturers, change manufacturers' incentives, and have broad effects on the drug market," CBO Director Phillip Swagel sad in the report. "A manufacturer that was dissatisfied with a negotiation could pull a drug out of the U.S. market entirely, though CBO expects that would be unlikely for drugs already being sold in the United States."
The Democratic bill would reduce the price of prescription drugs by requiring manufacturers to negotiate prices with the health secretary.
The negotiated prices "could not exceed 120 percent of the average price in certain other countries," the CBO said in the analysis. There would also be price limits on drugs that aren't on the international market. If drug makers fail to meet requirements, they could face an excise tax of up to 95 percent.
"Under current law, the secretary of HHS may not interfere in negotiations between drug manufacturers and prescription drug plans that deliver the (Medicare) Part D benefit," Swagel noted.
The report estimated that the Democratic bill would "improve people's health" in the short term by lowering drug prices, which the CBO added would increase affordability and use.
Over the long term, the analysis notes, reductions of pharmaceutical revenues would reduce spending on research and development for new drugs.
"The overall effect on the health of families in the United States that would stem from increased use of prescription drugs but decreased availability of new drugs is unclear," Swagel wrote.
President Donald Trump signed an executive order this month called Protecting Medicare from Socialist Destruction, but later re-titled it Protecting and Improving Medicare for Our Nation's Seniors.
The order pledges to improve private Medicare plans in contrast with proposals submitted by Democratic presidential candidates.