drugs and money

Major U.S. Congressional Actions in 2018 – Drug Pricing

pillClosed the Medicare Part D Donut Hole Early

  • Added into the February omnibus bill.
  • Requires pharma manufacturers to pay 70% of the brand-name drug costs for beneficiaries in the coverage gap.

Passed an Opioid-Related Group of Bills

  • Gives Medicare and Medicaid recipients access to more addiction and mental health services.
  • Requires Medicaid to use opioid monitoring programs.
  • Allows nurse practitioners and physician assistants to prescribe Buprenorphine.

Repealed Pharmacist “Gag Orders”

  • Bans contracts between pharmacy benefit managers and insurance companies that don’t allow pharmacists to tell beneficiaries how they could pay less for medicine.

Investigated Opioid Manufacturers and Marketers

  • The House Energy and Commerce Subcommittee on Oversight and Investigations held multiple hearings investigating major pharma companies, distributors, and makers of overdose reversal drugs.

Trump Administration 2018 Recap: Drug Pricing 

scaleProposed International Drug Pricing Index

  • Called the “International Pricing Index” or IPI.
  • Certain drugs covered by Medicare Part B would be indexed to the average price of other developed countries.
  • The Advanced Notice of Proposed Rulemaking (ANPRM) suggests the actual rule will be proposed in spring 2019 and take effect in spring 2020, lasting for five years.

play buttonProposed Requirement of Drug Prices on Advertisements

  • Requires advertisements to show the list price of medicine in any direct-to-consumer TV advertisements.
  • Would apply to any drug or biologic which is available under Medicare or Medicaid.
  • Comments were due on December 17, 2018, but no timeline for a final rule has been announced.

Medicines with growing chart, 3D rendering isolated on white background

Finalized 340b Penalty Starting Date

  • Under the Affordable Care Act, manufacturers will receive penalties if they “knowingly and intentionally” charge more than a ceiling price for an outpatient drug.
  • The original rule was finalized in the last days of the Obama administration, but implementation was delayed five times under President Trump.
  • After a lawsuit, the Department of Health and Human Services (HHS) announced that the rule will become final on January 1, 2019.

 “We will not wait for an industry with so many conflicting and perverse incentives to reform itself.”

— HHS Secretary Alex Azar

Potential 2019 Drug Pricing Agenda Items for Congress

Potential legislation reintroduced in 2019

CREATES Act: S. 974/H.R. 2212, “Creating and Restoring Equal Access to Equivalent Samples Act”

  • Co-sponsored by incoming Senate Finance Chairman Chuck Grassley (R-IA).
  • Seeks to quicken the delivery of generics to the market by requiring innovator companies to make available enough samples that other drug companies can develop biosimilars or generics.

FAIR Drug Pricing Act: S. 1131/H.R. 2439, “Fair Accountability & Innovative Research Drug Pricing Act”

  • Requires drug companies to give notice and justification for raising the price of a drug more than 10% at one time or more than 25% over three years.

Right Rebate Act: S. 3702

  • Sponsored by the incoming chair and ranking member of the Senate Finance Committees.
  • Addresses overpayment of rebates to drug companies that participate in the Medicaid Drug Rebate Program. 

Increased Oversight of the Trump Administration and Drug Companies

  • The Trump administration proposed multiple measures to lower drug prices in 2018.
  • The Democratic House will have subpoena power to call HHS officials before Congress if the administration does not act quickly enough on the proposed rules.
  • Both the Republican Senate and Democratic House seem intent on continuing hearings into the opioid crisis as well as drug pricing.

“The president keeps saying he wants to address the high cost of prescription drugs, but he doesn’t do anything, and the Republican majorities don’t do anything.”

— Rep. Frank Pallone (D-NJ)

Potential 2019 Drug Pricing Agenda Items for the Trump Administration

Finalize Proposed Rules

  • The Trump administration plans to officially propose an international pricing index rule in spring 2019.
  • The rule requiring list prices to be posted on TV advertisements could be posted in early 2019 to be implemented by the end of the year.

Safe Harbor Rule Revamp

  • Current rules protect rebates paid by drug makers to pharmacy benefit managers from penalties under federal anti-kickback laws.
  • HHS Secretary Azar has testified that the Trump administration wants to remove or reduce these rebates.
  • HHS sent a proposed rule to the White House for review in July, but a rule has not been formally announced.

“Everyone involved in the broken system — the drug makers, insurance companies, distributors, pharmacy benefit managers and many others — contribute to the problem.”

— President Trump

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