October 18, 2019
An amended version of the Lower Drug Costs Now Act (H.R. 3), which would save employers $46 billion over the next ten years according to the Office of the Actuary for the Centers for Medicare and Medicaid Services while potentially limiting the development of new drugs, has advanced through both the House Education and Labor Committee and the Energy and Commerce Committee on party-line votes.
The bills would:
An amendment that was adopted regarding employer health plans in the Education and Labor Committee, would require HHS and the Treasury to submit a feasibility report to Congress on a system for having drug-makers refund to employers the portion of price hikes that exceed the rate of inflation.
Potential later addition on rebates: A proposal by Rep. Phil Roe (R-TN) to require pharmacy benefit managers to pass 100% of drug-makers' rebates through to group health plans was not adopted but Committee Democrats expressed a willingness to work with Rep. Roe on a provision that could later be added to the bill when it goes to the House floor.
Drug negotiations and Medicare inflation rebates will save American households $158 billion from 2020 to 2029, according to the CMS Office of the Actuary.
Republicans say the bill will limit innovation and the ability of Americans to get life-saving drugs. The Congressional Budget Office projects approximately 8 to 15 fewer new drugs would be brought to market over the next 10 years.
Outlook: There is strong bipartisan support for addressing the drug pricing issue, but the details are creating divisions both within and between the parties. The House Ways and Means Committee is expected to vote on the legislation next week. The aim is to have a floor vote in the next few weeks, though there are still concerns from both progressive and centrist lawmakers. The full House will likely pass the measure before Thanksgiving, but the House version has virtually no chance of being taken up in the GOP-controlled Senate. A bipartisan drug pricing bill that is substantially different from the House measure has passed the Senate Finance Committee, but deep divisions in the GOP caucus about whether and how to proceed with the package raise serious questions about its ultimate passage, despite White House support.