We've reported in previous weeks about H.R. 3, the legislation in the House of Representatives being referred to as the 'Pelosi bill.' It is the top bill in the House, authored by House Speaker Nancy Pelosi (D-Calif.), that would allow Medicare to negotiated drug prices in order to bring the costs down. Speaker Pelosi had been hoping that President Trump might support her bill because he has said one of his top goals is to reduce the cost of prescription drugs.
There were even indications that the House would vote on the Pelosi bill this week and then send it to the Senate for action, even though Senate Majority Leader Mitch McConnell (R-Ky.) is opposed to the bill and has said he would not bring it up in the Senate.
Much to Speaker Pelosi's disappointment, the President indicated this week that he will not support the Pelosi bill but instead will support a bi-partisan bill in the Senate co-authored by Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Senator Ron Wyden (D-Ore.)
The name of the Grassley-Wyden bill is the Prescription Drug Pricing Reduction Act of 2019 (S.2543). It's purpose is to lower prescription drug prices in the Medicare and Medicaid programs, improve transparency related to pharmaceutical prices and transactions, lower patients' out-of-pocket costs, and ensure accountability to taxpayers, and for other purposes.
Unfortunately, earlier this week Sen. John Thune (R-S.D.), the Senate’s No. 2 Republican, said that it is unlikely the Senate will pass legislation to lower drug prices before the end of the year.
Then just yesterday Senator Grassley announced in a speech that the Senate is short of the 60 votes it will need to pass a prescription drug pricing bill even though the bill is the only one in Congress that enjoys bipartisan support.
When they announced their bill this past July, the Senators said “The cost of many prescription drugs is too high. Without action, we’re on an unsustainable path for taxpayers, seniors and all Americans. A working class family shouldn’t have to pick between making their rent or mortgage payment and being able to afford their kids’ medications. A single mother with diabetes shouldn’t have to pick between groceries and insulin. A senior citizen who’s paid into the system their entire life shouldn’t have to cut pills in half to be able to make it to the next refill. The time to act on prescription drug prices is now.
“We’ve been working on a bipartisan basis for more than six months to craft legislation that begins to address the broken prescription drug supply chain. Pharmaceutical companies play a vital role in creating new and innovative medicines that save and improve the quality of millions of American lives, but that doesn’t help Americans who can’t afford them. Similarly, pharmacy benefit managers and insurance companies have the opportunity to negotiate lower prices, but the American people don’t know how much these middlemen pocket for themselves. This legislation shows that no industry is above accountability. Passing these reforms, especially those that will affect some of the most entrenched interests in Washington, is never easy. But Americans are demanding action and reform is long overdue. We’re looking forward to working with our colleagues on the Finance Committee and with other committees in Congress to pass this prescription drug pricing overhaul very soon.”
Regarding Medicare, the Senators said their legislation would:
1) Modernize and improve the successful Part D program by
*Simplifying the program’s design;
*Protecting beneficiaries with high costs and providing peace of mind through an on out-of-pocket spending cap;
*Improving incentives to increase negotiation between prescription drug plans and manufacturers;
*Protecting the program from rampant manufacturer drug price increases; and
*Benefiting patients and taxpayers through lower government spending, premiums, and out-of-pocket costs.
2) Increase transparency into pharmacy benefit manager (PBM) practices and manufacturer drug pricing decisions;
3) Improve how Medicare calculates Part B prescription drug payment amounts to lower spending and beneficiary out-of-pocket costs; and
4) Eliminate excess Part B drug payments that drive up beneficiary and program costs.
Regarding Medicaid it would:
1) Increase transparency and make manufacturers more accountable to federal taxpayers;
2) Allow Medicaid to pay for gene therapies for rare disease through new risk-sharing value-based agreements, which will increase access to life-saving, miracle treatments for the most vulnerable;
3) Apply pressure on manufacturers to lower list prices and report more accurate calculations of their rebate obligations; and
4) Prevent spread pricing and gaming in the Medicaid program by PBMs to ensure that beneficiaries, states and the federal government are getting the best deal possible.
According the The Hill newspaper, in spite of the fact that the bill is co-authored by a Republican, Majority Leader McConnell has declined to support the bill.
“The legislation cleared the Senate Finance Committee over the summer largely with the support of Democrats, and Grassley is continuing trying to build support among his Republican colleagues for the measure. He has argued if Congress and the president are serious about tackling drug costs, his legislation is much more preferable to Pelosi’s. But many Republican senators object to a provision in that bill that would force drug companies to pay the money back to Medicare if their prices rose faster than inflation.”
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Congress managed to put off a government shutdown for another month by passing legislation earlier this week to extend funding and keep the government open until December 20. President Trump signed the bill yesterday.
As we've reported in the past, funding the federal government for fiscal year 2020 is something that was supposed to have been done by October 1, when the 2020 fiscal year began. However, it has become virtually commonplace during the past ten years that Congress is unable to meet that deadline regardless of which party is in control.
Congress now has less than a month to try and reach an agreement on funding for the rest of the fiscal year. However, they will be on break during Thanksgiving week next week so that leaves them only about 3 weeks to reach a final agreement. If they don't, we'll be in the same situation, facing either a government shutdown or under another temporary funding bill.
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One of the solutions to the high cost of prescription drugs has been thought to be making more generic drugs available to patients. However, a Wall Street Journal article this week that called into question whether that would actually be true. Here's what the article said:
“Record numbers of generic drugs for cancer, heart ailments and other conditions have received U.S. approval in recent years, raising hopes that the new competition would reduce high drug costs. But many of the lower-price medicines haven’t hit the market, a Wall Street Journal review found. The result: Many patients are forced to take high-price medicines, and a widely touted remedy for reining in drug costs has failed to live up to its promise.”
TSCL still believes more generics would lower drug costs but this article raises some questions. After all, the premise of the free market economy is that more competition should result in lower prices. The first of those questions is “Why aren't those generic drugs that have been approved by the FDA been put on the market?”
Another question is why isn't the FDA or other federal agency investigating this? And why hasn't Congress held hearings on this in light of the strong desire by both parties in Congress to try and get drug prices lowered?
We will be watching this issue as part of our continuing efforts to get prescription drug costs down.
