Close Up Of Pills Pouring Out Of A Prescription Medication Bottle; Image credit: Getty Images

U.S. House Democrats have agreed to drug pricing reform agreement that would, for the first time, allow Medicare Part D to negotiate directly with drug companies, possibly resulting in huge cost savings for seniors.

The deal would allow Medicare to begin negotiating the prices of 10 common drugs starting in 2023 and up to 20 drugs by 2028, according to the Washington Post. It would also limit insulin costs to $35 per month for older Americans, and cap annual out-of-pocket spending for seniors at $2,000, the news outlet reported. 

The agreement also would keep drug prices from increasing more than inflation, lawmakers said. Pharmaceutical companies would have to reimburse the U.S. government if prices are raised any higher.

An additional proposal would have pharmacy benefits managers (PBMs) face more transparency requirements, according to medical news outlet STAT. This may address changes long-sought by many long-term care pharmacy operators. 

PBMs serve as middlemen between insurance companies and pharmaceutical companies. Independent pharmacies including LTC pharmacy operators have argued that lack of oversight into PBM business practices contribute to unnecessarily high drug prices and make it difficult for them to do business. 

Progressives in Congress were forced to make major compromises on the overall agreement. But the final budget agreement should have a major impact, Senate Majority Leader Chuck Schumer (D-NY) told reporters Tuesday.

“This deal will directly reduce out-of-pocket drug spending for millions of patients every time they visit the pharmacy or doctor,” Schumer said, according to the Los Angeles Times.