Drug Prices Congressional Legislation Overview
While the intense focus in Congress last week was the passage of the American Healthcare Act, millions of Americans continue to struggle with the cost of prescription medications. In 2016, 45 million Americans did not fill a prescription because of cost, and a recent poll commissioned by Prescription Justice shows that 75% Americans agree with President Trump that they drug companies are getting away with murder.
Not just individual patients but federal and state governments face an uphill budget battle as well. Public programs like Medicare, Medicaid and the Department of Veteran’s Affairs continue to grapple with dramatic price increases that are crippling their budgets.
Congress has introduced several bills in 2017 to address the crisis of high drug prices. Here’s a summary:
On March 29, S. 771, The Improving Access to Affordable Prescription Drugs Act (Act), was introduced by Senator Al Franken (D-MN) and fifteen Democratic co-sponsors. A companion bill (HR 1776) was also introduced in the House by Representative Jan Schakowsky (D-IL) with four Democratic co-sponsors.
The Act, a very comprehensive set of policies, seeks to lower prescription drug costs through transparency and accountability, innovation, increasing access and affordability of prescriptions, and increasing choice and competition.
The Senate bill is currently in the Senate Committee on Finance. The House version is in the Subcommittee on Health.
Significant provisions of the Act include:
The Act requires drug manufacturers to disclose information such as manufacturing and marketing costs, acquisitions, federal investments, revenues, sales and other factors that may influence drug prices. This information would be reported to the Secretary of the Health and Human Services (HHS). The Act would also look at patient assistance programs and the extent to which drug makers are using independent charity assistance programs to drive up profits. The independent charity assistance programs would be required to disclose to the IRS the total amount of patient assistance provided to patients who are prescribed drugs manufactured by any contributor to the program. It also requires a study on the impact of patient assistance programs on prescription drug pricing and expenditures.
Access and Affordability
The Act would permit the Secretary of HHS to negotiate with drug manufactures to lower drug prices procured through Medicare. The Medicare Part D prescription coverage gap would be closed in 2018 and require pharmaceutical companies to pay a greater portion of costs during the coverage gap.
Prescription drug rebates would be restored for people eligible for both Medicare and Medicaid, and rebates would be extended to other Medicare patients in low-income subsidy plans.
Also, beginning in the year 2019, prescription drug cost sharing would be capped at $250 per month for individuals and $500 per month for families enrolled in qualified health plans.
The Act would also permit importation from foreign wholesale distributors and licensed pharmacies, which would need to register with the FDA, beginning with Canadian pharmacies. After two years, importation could expand to other countries of the Organization for Economic Cooperation and Development (OECD) if they meet standards comparable to U.S. standards.
The language on importation was taken from the Affordable and Safe Prescription Drug Importation Act of 2017, which is covered in this summary as well.
Choice and Competition
The Act would prohibit brand name and generic drug manufacturers from entering into reverse payment agreements, commonly known as “pay-for-delay” deals, in which brand name manufacturers pay generic manufacturers to keep less expensive generic versions off the market. Such deals would be deemed anticompetitive and thus illegal under the Act.
The Act would encourage innovation through a $2 billion prize fund for entities that develop superior antibiotics to treat serious and life-threatening bacterial infections and to fund research to advance treatments.
S.469, sponsored by Senator Bernie Sanders (I-VT) was introduced alongside companion bill, HR1245, sponsored by Representative Elijah Cummings (D-MD). The bills make it lawful for wholesalers, pharmacies and individuals to import lower cost medications, first from Canada, and then after two years, potentially from other OECD countries with systems of pharmaceutical regulation comparable to the U.S.
Extensive safety protocols are built into this legislation. For instance, only products manufactured in FDA-registered establishments would qualify. Otherwise lawfully-manufactured medications sold in Canadian pharmacies but not made in an FDA registered establishment would be off limits.
Canadian pharmacies that could register with the FDA who are selling medications online through their websites would, initially, not be allowed to process orders with partner pharmacies in other countries, as many currently do now.
S. 469 was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee for consideration. HR 1245 was referred to the Subcommittee on Health by the House Energy and Commerce Committee.
Increasing Competition in Pharmaceuticals Act (S. 297)
The Increasing Competition in Pharmaceuticals Act, introduced by Senator Susan Collins (R-ME), would prioritize certain generic drug applications and create a priority review voucher program to incentivize the development of new generics.
S. 297 would require that the FDA decide on abbreviated new drug applications (ANDAs) no later than 150 calendar days after the date of the submission if the generic “has been introduced into interstate commerce by not more than one manufacturer or sponsor, as applicable, in the last 3 months” or if it’s on FDA’s drug shortage list. It would also waive User Fees for some priority ANDAs.
The bill was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee for consideration.
Lower Drug Costs Through Competition Act (HR 749)
This bi-partisan bill, introduced by Representatives Kurt Schrader (D-OR) and Gus Bilirakis (R-FL), would amend the Food, Drug and Cosmetic Act to increase competition and boost generic product development through incentives that encourage competition in market areas where it does not normally exist. For example, if enacted, this bill would speed the approval times for new generic entrants requiring FDA to approve or deny the application within six months.
This bill has been referred to the House Energy and Commerce Subcommittee on Health.
S.41, introduced by Senator Amy Klobuchar (D-MN) in the Senate and companion bill, HR 242 was introduced by Representative Peter Welch (D-VT) in the House. The bills would amend title XVIII (Medicare) of the Social Security Act to require the Secretary of HHS to negotiate with pharmaceutical manufacturers on drug prices covered under the Medicare Part D prescription drug benefit. The current law prohibits the federal government from negotiating drug pricing for Medicare.
S.41 has been referred to the Committee on Finance. HR 242 has been referred to the House Energy and Commerce Subcommittee on Health.
S.64, introduced by Senator John McCain (R-AZ) and companion bill HR 1480, introduced by Representative Chellie Pingree and (D-ME), would amend the Federal Food, Drug and Cosmetic Act to allow for the personal importation of lower cost prescription drugs from approved pharmacies in Canada. If enacted, a qualifying prescription drug would have to be purchased from an approved Canadian pharmacy that is registered with the FDA, dispensed by a licensed Canadian pharmacist, require a valid prescription from a U.S. provider and have the same active ingredients, route of administration, dosage and strength as an FDA-approved prescription drug.
S.64 has been referred to the Committee on Health, Education, Labor, and Pensions. HR 1480 has been referred to the House Energy and Commerce Subcommittee on Health.
Short on Competition Act (S. 183)
The Short on Competition Act, a bipartisan bill introduced by Senator Amy Klobuchar (D-MN) and sponsored by Senator Mike Lee (R-UT), authorizes the Secretary of HHS to expedite reviews of ANDAs and permits temporary importation of prescription drugs when there are fewer than five competitors for drugs that have been on the market for at least 10 years.
The bill is currently in the Health, Education, Labor and Pension committee.