The drug-pricing bill proposed by House Speaker Nancy Pelosi, D-Calif., could save Medicare up to $345 billion over seven years, according to a new estimate by the Congressional Budget Office.
The bill, introduced in September, would allow the HHS secretary to negotiate with drug manufacturers the prices of up to 250 drugs annually. It also would set an upper limit on drug prices, only allowing them to reach up to 120 percent of the average price paid in other economically similar countries.
If drugmakers refuse to negotiate, their gross sales would be taxed starting at 65 percent.
The CBO estimates the proposal would bring big savings to U.S. taxpayers and have wide-ranging effects on the drug industry, including a hike in drug prices in other countries to compensate for lower prices in the U.S.
Drugmakers could also introduce medications at higher prices to try to offset any discounts and decrease new drug development, the CBO said.
Read the full estimate here.