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Congressional Leaders Reintroduce Competing Drug Pricing Bills

House of Representatives

In April 2021, House committee leaders reintroduced their signature drug pricing proposals, setting up another partisan showdown on how best to lower the cost of Americans’ prescriptions. House Democrats, led by Energy and Commerce Committee Chairman Frank Pallone (D-NJ), Ways and Means Committee Chairman Richard Neal (D-MA), and Education and Labor Committee Chairman Bobby Scott (D-VA) reintroduced H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act. First introduced in 2019, the bill includes the following key provisions:

  • Allow the Secretary of Health and Human Services to negotiate Medicare prescription drug prices for at least 25 drugs in 2024 and 50 drugs in 2025 and years thereafter; prices are not to exceed the average international market (AIM) price across six countries – Australia, Canada, France, Germany, Japan, and the United Kingdom – and may be extended to the commercial market; manufacturers would be subject to severe financial penalties for noncompliance (see the Part B Access for Seniors and Physicians [ASP] Coalition statement)
  • Impose new mandatory rebates on manufacturers that increase list prices above an established inflation threshold in Medicare Parts B and D
  • Redesign the Medicare Part D benefit by creating a $2,000 beneficiary out-of-pocket cap and increasing manufacturer and plan liability in the catastrophic phase
  • Impose new drug price transparency measures on pharmaceutical manufacturers including price increase justifications
  • Provide $22 billion in public health funding to the NIH and FDA, with $10 billion set aside for opioid epidemic response

The same week Democrats filed H.R. 3 staking out their position on drug pricing issues, Republicans also reintroduced H.R. 19, the Lower Costs, More Cures Act. Sponsored by Energy and Commerce Committee Ranking Member Cathy McMorris Rodgers (R-WA), Ways and Means Committee Ranking Member Kevin Brady (R-TX), and Education and Labor Committee Ranking Member Virginia Foxx (R-NC), this legislation includes the following provisions:

  • Establish a tiered reimbursement structure for Medicare Part B drugs whereby average sales price (ASP) reimbursements vary based on the relative cost of the drug; ASP-based add-on payments would be capped at $1,000 for most drugs and up to $2,000 for select immunotherapies
  • Require site neutral payments for the administration of Medicare Part B drugs; reimbursements are to be based on the lower physician fee schedule rate rather than the rate higher hospital rate (see Alliance for Site Neutral Payment Reform statement)
  • Require manufacturers to refund Medicare Part B for drug wastage in single-dose containers and single-use package drugs
  • Redesigns the Medicare Part D benefit by creating a $3,100 beneficiary out-of-pocket cap and increasing manufacturer liability throughout the benefit
  • Expands drug price transparency reporting and comparison tools

Senate

On June 22, the U.S. Senate laid down diverging markers on drug pricing. Senate Finance Committee Chairman Ron Wyden (D-OR) first unveiled a set of principles to guide drug pricing reform. The principles highlight Democratic priorities, but lack detail, demonstrating the challenge of finding consensus on the issue. The five principles include:

  • Equipping Medicare with the authority to negotiate with pharmaceutical manufacturers, especially when competition and market practices fail to hold down drug prices
  • Ensuring Americans pay less in out-of-pocket costs
  • Requiring rebates for drugs whose prices increase faster than inflation
  • Extending drug pricing reforms to all Americans, not just Medicare beneficiaries
  • Rewarding scientific innovation through the continued support of federal R&D funding for groundbreaking treatments, while cracking down on gaming of the patent system

On the same day, Republican Ranking Members Mike Crapo (R-ID) of the Finance Committee and Richard Burr (R-NC) of the Health, Education, Labor, and Pensions (HELP) Committee reintroduced the Lower Costs, More Cures Act in the Senate (S. 2164). Similar to the House Republican bill, H.R. 19, the Senate legislation would create a tiered system for Part B drug reimbursement, create a maximum add-on payment of up to $1,000 for most drugs and biologics ($2,000 for biologics), implement site neutral payments for Part B drug administration, and redesign the Medicare Part D benefit, among other provisions.