Drug Pricing Bills Move Forward

You may have noticed a flurry of proposals coming out of Washington, D.C., aimed at reducing drug prices and patients’ out-of-pocket drug costs.

In July, the Senate Finance Committee voted narrowly in favor of penalizing drug companies whose prices outpace inflation; if enacted, that bill would also increase reimbursement for biosimilars to average sales price (ASP) plus 8% (from +6, pre-sequester). It would also modify how ASP is determined by recalculating it to a lower number based on co-pay coupons used in the commercial market, which is potentially very concerning for infusion providers. The ACR has communicated this concern to the Senate. Finally, this bill would cap patients’ out-of-pocket costs for Medicare Part D.

A second Senate bill, still in committee, would revamp the pharmacy benefit manager (PBM) payment system, which is widely known to motivate price hikes, by requiring PBMs to pass 100% of rebates through to plans rather than splitting the rebate with the pharmaceutical company.

This week, the House of Representatives released a long-anticipated plan led by Speaker Nancy Pelosi (D-CA) that is more extensive than the Senate plans. It contains provisions to reduce U.S. drug prices according to an international price index. This mirrors the idea floated this past fall by the Trump administration, but with two key differences for rheumatologists: no vendor model and no flat fee for Part B drugs. Thus, doctors would remain able to provide buy-and-bill services to patients.

Instead of relying on vendors to contract at lower rates, the House plan would impose a high, escalating tax on companies that fail to meet the price target. It would also require manufacturers that have increased prices faster than inflation to either lower prices to 2016 levels or pay back the extra cost above inflation since 2016. Similar to the Senate bill, this plan would also cap out-of-pocket costs for patients in Part D.

In addition to these legislative plans, the Trump administration has promised to release a plan soon that would reduce drug prices according to some type of international pricing model. The White House is pushing agencies to increase transparency in the drug pricing system.

What will emerge from this drug pricing debate? Stay tuned. During the 2019 Advocates for Arthritis fly-in event, the ACR took the opportunity to highlight for Congress our drug pricing principles:

• Protect patient access to treatment;
• Reduce and streamline utilization management, such as step therapy;
• Provide access to drugs given in monitored settings;
• Promote use of guidelines; and
• Support safe, effective biosimilars.