President’s News | Press room | The United States Senate Committee on Finance

August 07, 2022

Landmark legislation would reduce carbon emissions and lower prescription drug costs

washington d.c. – Legislation drafted by Senate Finance Committee Chairman Ron Wyden, D-Ore., was passed by the Senate today as part of the historic Inflation Reduction Act.

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

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

“This historic clean energy package took ten years to prepare. When clean energy legislation failed in 2010, we banded together to ensure success the next time Democrats have the chance,” Wyden said. “We turned to emissions-based, technology-neutral tax incentives, and spent nearly a decade preparing this bill. My lodestar achieved the greatest emissions and cost savings possible with 50 votes. This is why the Inflation Reduction Act the clean energy tax package accounts for around 90% of the Clean Energy Act for America which the Senate Finance Committee approved in May 2021. We have built the necessary support over time.

Wyden continued, “This bill will reduce energy costs, ensure our energy independence and significantly reduce carbon emissions. For the first time, the tax code will reward emissions reductions and encourage the development of new clean energy technologies as soon as they come online. Congress will no longer need to legislate on a technology-by-technology basis, making it easier to innovate and bring new technologies to market. Above all, it is a permanent energy policy. Congress will no longer need to extend these incentives every few years, giving businesses and states the certainty to plan clean energy projects and create jobs. This is one of the most important 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, especially 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 raise prices year after year, and it creates strong protections for seniors, including a cap of $2,000 per year.

“For too long, Medicare has been forced to face Big Pharma with one hand tied behind its back – it ends when this bill is signed into law,” Wyden said. “Since becoming the top Democrat on the finance committee, I have shed light on how the drug pricing system is broken from top to bottom. Finally, the Senate began redefining the relationship between Medicare and Big Pharma. This work began last Congress on a bipartisan basis, and almost all of the work of the Finance Committee two years ago is included in the Inflation Reduction Act. Democrats have taken the crucial next step by lifting the curse that has prevented Medicare from negotiating lower prices.

“The negotiation of health insurance is the centerpiece of the Inflation Reduction Actdrug price reforms. Pharmaceutical companies will no longer be able to shackle health insurance for years, or even decades, while taxpayers foot the bill. This policy targets the most expensive and widely used drugs that have had no competition for years. It lowers prices in a way that is fair and designed to promote innovation, not stifle it. These negotiations will begin next year. This creates a limit on Big Pharma’s ability to raise prices with Medicare inflation reimbursement, forcing drug companies to pay fees to Medicare if they raise prices faster than inflation. Importantly, the bill will protect seniors from high out-of-pocket costs in less than a year and a half with a $2,000 cap on drug costs, saving more than a million seniors from financial peril. Taken together, these policies represent a seismic shift in how Medicare pays for drugs, and does so in a way that will significantly reduce costs for seniors and taxpayers.


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