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Sanders and Cummings Introduce Legislation to Require Drug Company Rebates for Generic Drugs

Nov 20, 2014
Press Release

Washington, D.C.—Today, Senator Bernard Sanders, Chairman of the Subcommittee on Primary Health and Aging, Senate Committee on Health, Education, Labor and Pensions, and Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, introduced legislation in the Senate and House to require drug companies to reimburse Medicaid if they raise the prices of their generic drugs more quickly than inflation.

Current law requires drug companies to pay rebates to Medicaid when they increase the prices of brand name drugs more quickly than inflation.  The Medicaid Generic Drug Price Fairness Act, S. 2948 and H.R. 5748, would amend the law to extend this rebate provision to generic drugs.

The Congressional Budget Office has concluded that this proposal would save the Medicaid program $500 million over the next ten years.  

“This bill is a great first step in our efforts to help people who are facing staggering price increases for generic drugs and save half a billion dollars for the Medicaid program in the process,” Cummings said.  “I will continue to work with Chairman Sanders to ensure that Americans are not burdened by these outrageous price hikes that prevent them from receiving the medicines they desperately need.”

“The bill will require generic drug companies to provide a rebate to Medicaid if their drug prices rise faster than inflation,” said Sanders. “Brand-name drugs are required to pay this rebate if their drugs go up faster than inflation, but generic drug companies are exempt. Congress should fix this loophole immediately.”

Last month, Cummings and Sanders launched an investigation into recent price increases for generic drugs used to treat everything from common medical conditions to life-threatening illnesses and to identify measures to help reduce costs for patients, healthcare providers, and hospitals across the country.

Today, Sanders called a hearing on this issue, where Cummings testified alongside several other witnesses. 

Click here to see a copy of the bill.

113th Congress