By Thomas M. Burton 

WASHINGTON -- The Senate Finance Committee's highest-ranking members are pushing legislation to restrain drug-price increases by placing some caps on out-of-pocket spending in the federal Medicare program.

Committee Chairman Sen. Chuck Grassley (R., Iowa) and ranking member Ron Wyden (D., Ore.) said their bill could save the government $85 billion on the Medicare program over 10 years, based on a Congressional Budget Office Analysis.

The budget office analysis also said that Medicare beneficiaries could save $27 billion in out-of-pocket costs over the same ten-year period, as well as another $5 billion in federal Medicare premiums.

The bill generally would cap Americans' drug costs at a fixed level in the Medicare drug-benefit program called Part D. It also would cap the growth of government subsidies in the program at the consumer inflation rate.

The legislation is among an array of competing proposals offered by various members of Congress and by the Trump administration. Sen. Grassley's office said Tuesday the Republican administration now is supporting this legislation.

In a tweet Tuesday, a White House spokesman said, "The White House is encouraged by the bipartisan work of Chairman Grassley and Senator Wyden to craft a comprehensive package to lower outrageously high drug prices, and today we are engaging with coalitions to help build support."

This bill, if it gains sufficient congressional support, is among those that could have the greatest impact on prices, but it is expected to be opposed by the drug industry.

PhRMA, which represents the drug industry in Washington, criticized the bill. "The Senate Finance Committee package fails to meet the fundamental test of providing meaningful relief at the pharmacy counter for the vast majority of seniors. The legislation would siphon more than $150 billion from researching and developing new medicines while giving those savings to the government, insurers and PBMs -- not seniors," said PhRMA President and Chief Executive Stephen J. Ubl.

Aaron S. Kesselheim, a Harvard medical professor who has been prominent in U.S. drug-safety and pricing issues, called the bill "an important step forward."

"Caps on price increases for drugs could be significant," he said. "It does not seem reasonable that pharmaceutical manufacturers should have carte blanche to raise prices each year based on what the market will bear without bringing any relevant new information to the market about the value of the drug."

Peter Maybarduk, of the consumer group Public Citizen, called the bill "a serious effort."

"This can help beneficiaries and provide a meaningful start to the work our government needs to do to make medicine affordable," said Mr. Maybarduk.

Medicare is the federal insurance program for Americans 65 and older.

Write to Thomas M. Burton at tom.burton@wsj.com

(END) Dow Jones Newswires

July 23, 2019 15:50 ET (19:50 GMT)