Congress

Democrats bow to critics, expand scope of drug price bill

The changes by House Democratic leaders were made to appease progressives who pushed for more aggressive action

Speaker of the House Nancy Pelosi, D-Calif., points to sign that reads “lower drug costs now” as she departs from a press conference at the Capitol in Washington on September 19, 2019. Democratic leaders unveiled changes to Pelosi’s drug pricing bill ahead of markups Thursday. (Caroline Brehman/CQ Roll Call)

House Democratic leaders unveiled changes to Speaker Nancy Pelosi’s drug pricing bill ahead of markups Thursday, seeking to appease progressives who pushed for more aggressive action.

The chamber is expected to vote on the bill this month.

[Scope of drug pricing bill could thwart Democrats’ hope for political win]

The legislation, introduced last month, would require the Department of Health and Human Services to negotiate lower prices for the most expensive drugs under Medicare and the health care system, tying the prices to those paid by other wealthy countries. The bill would also require manufacturers to offer those prices to commercial plans and cap price hikes at inflation rates.

Energy and Commerce Chairman Frank Pallone Jr., D-N.J., and Education and Labor Chairman Robert C. Scott, D-Va., introduced changes that would bump the number of drugs required for negotiation from 25 to 35, phasing in the higher number by 2033. The bill would also mandate that HHS negotiate a ceiling price for new drugs that lack competition, which would remain in place until there are at least two generic competitors.

House leaders are seeking to solidify support from progressives for the bill, which represents one of the party's top domestic priorities and a major campaign issue.

“I want to stress that this is a floor,” Pallone said Wednesday of the minimum number of drugs required to be negotiated by the bill. “The secretary can do a lot more and hopefully will.”

The Energy and Commerce amendment would also eliminate generic drug copays for low-income Medicare patients and allow patients who hit a $2,000 deductible with a single prescription to pay their bill in installments. The amendment also raises the qualifying income threshold for low-income Medicare subsidies beginning in 2022.

Additionally, patients in U.S. territories would qualify for the subsidy, and Medicaid patients who meet the income requirement would be automatically enrolled for the Medicare subsidy when they turn 65.

The amendment also would require drug manufacturers to report certain drug price increases to HHS 30 days before the change takes effect. Those reports would also include information on costs for research and development as well as advertising, and the bill would levy a $75,000 daily penalty for noncompliance. The measure is similar to bills from the Energy and Commerce and Ways and Means panels.

More changes are likely as the bill makes its way through three committees. In addition to recently scheduled markups in the Energy and Commerce and the Education and Labor committees Thursday morning, the Ways and Means Committee will hold a hearing the same day. Ways and Means Chairman Richard E. Neal, D-Mass., said Wednesday that his committee will mark up the bill next week.

Reaction

Initial reactions indicate that progressives are not yet completely satisfied.

Mark Pocan, D-Wis., said the list of requests from the Congressional Progressive Caucus “hasn’t changed much.”

Pocan said he hasn't gotten an answer on why the legislation should not require price cuts for more drugs.

“If one person would give me that answer, I would be very happy,” said Pocan.

Ways and Means Health Subcommittee Chairman Lloyd Doggett, D-Texas, also expressed similar concerns.

“These tweaks to a narrow negotiation bill do not yet address making it legal to negotiate prices for drugs like EpiPen, assuring reasonable prices for drugs developed with taxpayer money, protecting most Americans from high price spikes, effectively addressing sky-high new drug launch prices, guaranteeing any relief for the uninsured, or ever negotiating down prices on more than a relatively small group of drugs,” he said in a statement.

Zain Rizvi, a law and policy researcher with the advocacy group Public Citizen, noted that a new exception in the bill would allow HHS to exempt drugs from price increase limits if it determines the drug is “essential” to the health of Medicare patients.

“If the secretary determines the availability of a drug is essential, that's a pretty sweeping exception,” Rizvi told CQ Roll Call.

Republicans, meanwhile, are still upset over the process and accelerated timetable. House Energy and Commerce top Republican Greg Walden of Oregon said Republicans plan to offer more than 200 amendments during the markup.

“We’re serious about bringing down the high cost of drugs and join the president in that effort,” he said. “We were on a path to do that in a bipartisan way until the speaker’s office got in the middle of it.”

He also condemned the committee’s decision to skip a subcommittee markup after Health Subcommittee Chairwoman Anna G. Eshoo of California said one would take place.

But both Walden and Ways and Means ranking member Kevin Brady, R-Texas, declined to say whether they would oppose the bill if President Donald Trump endorsed it.

They also declined to offer their views on drug pricing legislation by Senate Finance Chairman Charles E. Grassley, R-Iowa, saying they were “still reviewing” the language. Grassley has presented his bill as a conservative alternative to Pelosi’s, although a number of Republicans oppose a provision restricting price increases to inflation.

The fight continues amid increased pressure from drug industry groups. The Pharmaceutical Research and Manufacturers of America held a roundtable with reporters last week outlining how they anticipate the bill would undercut research on innovative drugs.

A partial, preliminary Congressional Budget Office estimate projects the bill would reduce federal spending in Medicare Part D by $345 billion over 10 years, while slashing drugmakers’ revenues by up to $1 trillion. CBO projects there would be between eight and 15 fewer new drug introductions as a result, noting that it could not calculate how innovative or effective the foregone drugs would have been.

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