prescription-drug
  • Prescription Drug
  • Original Analysis

Prescription Drug Pricing Tracker

October 30, 2019

McDermott+Consulting

Introduction to Prescription Drug Pricing Tracker

The rising costs of prescription drugs has been a focus of Congress and the Administration. Since January 2019, approximately 100 bills have been introduced to address prescription drug costs. Additionally, the Administration released its Blueprint To Lower Drug Prices and has pursued several regulations to lower prescription drug costs.

Despite the number of bills that have been introduced in the Senate and the House, very few have advanced in the legislative process. The bills that have advanced are considered low-hanging fruit. For example, H.R. 1503, the Orange Book Transparency Act of 2019, and H.R. 1520, Purple Book Continuity Act of 2019, both passed out of House. H.R. 1503 would codify current regulations and practice regarding the types of patent and exclusivity-related information listed in the Orange Book. H.R. 1520 would codify publication of the Purple Book by the Food and Drug Administration, require that the agency include more detailed information in the compendium, make the data available in a searchable electronic format, and update it every 30 days. Although these bills are important transparency measures, they do not make fundamental changes to reduce prescription drug costs.

Other bills that have passed the House include the CREATES Act of 2019, the BLOCKING Act, and the Protecting Consumer Access to Generic Drugs Act of 2019. In general, these bills have received bipartisan support. However, these bills were packaged into the larger H.R. 987, the Strengthening Health Care and Lowering Prescription Drug Costs Act, which includes other bills targeting the Trump Administration’s actions towards the Affordable Care Act (ACA). H.R. 987 ultimately passed the House, but did not receive support from Republicans as the other ACA related bills were tied to the package. These ACA bills are a nonstarter in the Republican-controlled Senate. As a result, the bipartisan prescription drug bills will likely be included in another package.

Most recently, the House passed two transparency and data reporting bills. The first bill, HR 1781, Payment Commission Data Act of 2019, would give MedPac and MACPAC access to drug pricing and rebate data to help Congress better understand how the drug market is operating. The second bill, HR 2115, Public Disclosure of Drug Discounts and Real-Time Beneficiary Drug Cost Act, would require the Centers for Medicare & Medicaid Services (CMS) to publish certain payment information regarding pharmacy benefit managers and prescription drugs.

In the Senate, prescription drug pricing reforms are included in the Senate Committee on Health, Education, Labor and Pensions (HELP)’s Lower Health Care Costs Act. The Lower Health Care Costs Act is a large package focused on addressing surprise billing. However, it includes provisions of the CREATES Act, the Orange Book Transparency Act of 2019, and the BLOCKING Act. On June 26, 2019, the HELP Committee marked up and reported it to the full Senate. One of the amendments adopted in the markup was Senator Baldwin’s FAIR Act, which would require drug makers to justify certain price increases. Much of the continued debate on the Lower Health Care Costs Act does not focus on the prescription drug pricing measures, but rather the surprise billing components.

The two most significant prescription drug pricing packages come from the Senate Finance Committee and the Speaker’s Office. On July 23, 2019, the Senate Finance Committee posted a description of the Chairman’s mark of the Prescription Drug Pricing Reduction Act of 2019addressing prescription drug pricing. It is a robust package that includes comprehensive changes to Medicare Part B, Medicare Part D, and Medicaid. The Senate Finance Committee marked up the legislation on July 25, 2019. It passed in a vote of 19-9. Senators Grassley, Portman, Cassidy, Young, and Daines were the Republicans that voted in favor of the bill. All of the Democrats voted yes. A number of amendments were included in the modification to the Chairman’s mark.

Following that, on September 19, 2019, Speaker of the US House of Representatives, Nancy Pelosi (D-CA), released a much- anticipated proposal to contain federal and individual spending on prescription drugs. The Lower Drug Costs Now Act of 2019 (H.R.3) includes the following provisions:

  • Medicare prescription drug pricing negotiation.
  • An inflationary rebate, in which manufacturers would have to pay a rebate back to the US Treasury if they increased the price of Medicare Part B or D prescription drugs above the rate of inflation.
  • A $2,000 beneficiary annual cap on out of pocket costs for prescription drugs under Medicare Part D.
  • Structural changes to the Medicare Part D benefit’s catastrophic phase.

In mid-October, three House Committees, the Energy and Commerce Committee, the Ways and Means Committee, and the Education and Labor Committee, all marked up and advanced H.R. 3, making some changes to the original language. Most notably, the three committees included a change that was pushed by progressive Democrats, which would increase the number of drugs subject to government price negotiation. Currently, it is expected that the House will vote on H.R. 3 in December. However, it is unlikely to gain traction in the Senate.

The Administration has signaled its support of the Senate Finance Committee package and the President signaled that he welcomed the Pelosi package. The Administration wants a win in the space. The Administration has rolled out four different drug pricing proposals; however, most of these have been cut back or withdrawn. (We are still waiting for the Administration to publish the International Pricing Index proposed rule.)

Although there is significant overlap between the Senate Finance Committee, Pelosi, and the Administration, achieving prescription drug pricing reform likely requires President Trump and Speaker Pelosi to support agreements from their parties. The ongoing impeachment inquiry significantly lowers the possibility of the two of them reaching consensus on controversial changes. While the most controversial drug pricing proposals are unlikely to become law this year, that does not mean all drug pricing is off the table. More bipartisan drug pricing measures, like the CREATES Act, could still get done. We watch to see how Democrats and Republicans come together after the House moves H.R. 3 and if there is room for compromise.

There are a lot of moving parts when it comes to prescription drug cost reform. Keep up-to-date with our tracker!

Download the tracker here (Updated November 18, 2019).


For more information, please contact Rachel Stauffer or Katie Waldo.

Previous Post
beakernav X1E2BFA62-BFCE-43C1-B777-27E3E5216018medical bagoriginal analysis +external linkpdf downloadstethoscope