Explaining the Prescription Drug Provisions in the Build Back Better Act
By Juliette Cubanski, Tricia Neuman, and Meredith Freed
Kaiser Family Foundation
On November 19, 2021, the House of Representatives passed H.R. 5376, the Build Back Better Act (BBBA), which includes a broad package of health, social, and environmental proposals supported by President Biden. The BBBA includes several provisions that would lower prescription drug costs for people with Medicare and private insurance and reduce drug spending by the federal government and private payers. These proposals have taken shape amidst strong bipartisan, public support for the government to address high and rising drug prices. CBO estimates that the drug pricing provisions in the BBBA would reduce the federal deficit by $297 billion over 10 years (2022-2031).
The key prescription drug proposals included in the BBBA would:
– Allow the federal government to negotiate prices for some high-cost drugs covered under Medicare Part B and Part D
– Require inflation rebates to limit annual increases in drug prices in Medicare and private insurance
– Cap out-of-pocket spending for Medicare Part D enrollees and other Part D benefit design changes
– Limit cost sharing for insulin for people with Medicare and private insurance
– Eliminate cost sharing for adult vaccines covered under Part D
– Repeal the Trump Administration’s drug rebate rule
This brief summarizes these provisions and discusses the expected effects on people, program spending, and drug prices and innovation. We incorporate the estimated budgetary effects released by CBO on November 18, 2021, and to provide additional context for understanding the expected budgetary effects, we point to past projections of similar legislative proposals from CBO and others. This summary is based on the legislative language included in the House-passed bill that may be modified as it moves through the Senate.
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