Congressman Butterfield Introduces Bipartisan Bill to Fix Medicaid Penalty for Low-Cost Generics

Oct 6, 2020
Press Release

WASHINGTON, D.C. – Today, Congressman G. K. Butterfield (D-NC) with Congressman Billy Long (R-MO) and Congressman Tony Cardenas (D-CA) introduced the Protecting Access to Affordable Medicines Act of 2020. The 2015 Bipartisan Budget Act applied an inflation penalty originally designed for branded drugs to generic drugs as well, despite significant differences between the branded and generic markets. While appropriate in instances where manufacturers drastically increase the price of branded drugs, the inflation penalty in the generic market could apply in cases where a price is increased by just a few cents. This disincentivizes market entry and threatens the ability of existing manufacturers to continue producing affordable generic medicines. The Protecting Access to Affordable Medicines Act would set a floor at $1, so drugs that cost less than a dollar would be exempt from the penalty. This will help ensure that generic drug manufacturers stay in the market, generic drug shortages are avoided, and beneficiaries have access to quality and affordable medications.

“It is imperative that drug prices are affordable and accessible to patients in need. The inflation penalty for generic drugs as currently written is triggered with even the most minor fluctuations in the price of generic drugs, even in cases where the manufacturer did not raise the price,” said Congressman Butterfield. “This has unintentionally deterred generic manufacturers from entering the market and has caused some to leave—increasing the likelihood of drug shortages and threatening access to generic drugs for patients. Many vulnerable populations depend on access to these low-cost generics, so I am proud to stand with my colleagues to introduce this vital piece of legislation to increase access to affordable medicines.”

“Many Americans depend on affordable generic drugs, which is why it is critical that these medications are accessible,” said Congressman Long. “By fixing the inflation penalty for low-cost generics, this bill will prevent many drugs from leaving the market and will help ensure that Americans have access to affordable prescription drugs. I’m proud to work with my colleagues in a bipartisan fashion to find a common sense fix.”

“Families should not be forced to choose between buying groceries or medicine for their children," said Congressman Cárdenas. "Fixing the inflation penalty for generic drugs will allow Americans to access affordable prescription drugs. This is a commonsense fix that will help working families and I am proud to join my colleagues in introducing this bipartisan bill."