Chairman’s News | Newsroom | The United States Senate Committee on Finance


August 07.2022

Historic legislation would cut carbon emissions, lower prescription drug costs

Washington, DC – Legislation authored by Senate Finance Committee Chair Ron Wyden, D-Ore., today passed the Senate as part of the historic Inflation Reduction Act.

The linchpin of the Inflation Reduction Act‘s clean energy package is Wyden’s Clean Energy for America Actfirst introduced in 2015, which reforms the energy tax code to encourage emissions reductions rather than specific technologies.

The Clean Energy for America Act would reduce carbon emissions in the power sector by about 70 percent over the next decade, and is the main driver of the overall 40 percent reduction in emissions achieved by the Inflation Reduction Act.

“This historic clean energy package has been a decade in the making. When clean energy legislation failed in 2010, we regrouped to ensure success the next time Democrats had an opportunity,” said Wyden. “We turned to emissions-based, technology-neutral tax incentives, and spent nearly a decade preparing this bill. My lodestar has been achieving the greatest emissions and cost-savings possible with 50 votes. That’s why the Inflation Reduction Act’s clean energy tax package is about 90 percent of the Clean Energy for America Act that the Senate Finance Committee approved in May 2021. We built the support needed over time.

Wyden continued, “This bill will reduce energy costs, secure our energy independence, and drastically cut carbon emissions. For the first time, the tax code is going to reward emissions reductions, and encourage the development of new clean energy technologies as soon as they come online. No longer will Congress need to legislate technology by technology, making it easier to innovate and bring new technologies to market. Importantly, this is permanent energy policy. Congress will no longer need to extend these incentives every few years, giving companies and states certainty to plan clean energy projects and create jobs. This is among the most consequential bills of my service in the Senate.”

On health care, the Inflation Reduction Act includes the culmination of Wyden’s work on the Finance Committee to address the high cost of prescription drugs.

The bill would finally allow Medicare to negotiate lower drug prices, particularly for the most expensive drugs that have no competition after being on the market for years. The bill also includes an inflation rebate that limits Big Pharma’s ability to price gouge year after year, and it creates strong protections for seniors including a $2,000 per year out-of-pocket cap.

“For too long, Medicare has been forced to contend with Big Pharma with one hand tied behind its back – that ends when this bill is signed into law,” said Wyden. “Ever since I became the top Democrat on the Finance Committee, I have been spotlighting how the drug pricing system is broken top to bottom. At last, the Senate has begun to redefine the relationship between Medicare and Big Pharma. That work began last Congress on a bipartisan basis, and virtually the entirety of the Finance Committee’s work two years ago is included in the Inflation Reduction Act. Democrats have taken the critical next step by lifting the curse that has prevented Medicare from negotiating lower prices.

“Medicare negotiation is the centerpiece of the Inflation Reduction Act‘s drug pricing reforms. No longer will drug companies be able to string Medicare over for years or even decades while taxpayers foot the bill. This policy targets the most expensive, most used drugs that have had zero competition for years on end. It lowers prices in a way that is fair and designed to promote innovation, not stifle it. Those negotiations will begin next year. It creates a limit on Big Pharma’s ability to price gouge with the Medicare inflation rebate, requiring drug companies to pay a fee to Medicare if they raise their prices faster than inflation. Critically, the bill will protect seniors from high out-of-pocket costs in less than a year and a half with a $2,000 out-of-pocket cap on drug costs, which will spare more than a million seniors from financial peril. Taken together, these policies represent a seismic shift in how Medicare pays for medicine, and it does so in a way that will greatly lower costs for seniors and taxpayers.”

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