ASH Drug Pricing Update

Drug Pricing Debate Heats Up in Congress

During the second week in May, two key House Committees held hearings to consider drug pricing legislation. The hearings before the House Energy and Commerce Committee and a subcommittee of the Education and Labor Committee featured patients, patient advocates, economists, and legal experts testifying on the high cost of brand name drugs. House Democrats are pushing for enactment of H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, which would allow the federal government to directly negotiate for lower prices on some pharmaceuticals in Medicare. President Biden highlighted Medicare negotiation of drug prices during an address to Congress in early May. However, H.R. 3 is likely to meet with opposition from House Republicans who are pushing their own approach to lower prescription costs. ASH will continue to closely monitor the drug pricing debate and related legislation.

Elijah Cummings Lower Drug Costs Now Act (HR 3)— On April 22, 2021, Energy and Commerce Committee Chairman Frank Pallone (D-NJ), Ways and Means Committee Chairman Richard Neal (D-MA), and Education and Labor Committee Chairman Bobby Scott (D-VA) reintroduced the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3). (The House passed a similar version of H.R. 3 in the last Congress.) H.R. 3 bill empowers the Secretary of Health and Human Services (HHS) to negotiate the cost of prescription drugs in Medicare and make those prices available to commercial health insurance plans. Under this approach, the Secretary is required to identify and publish a list of 125 negotiation-eligible drugs with the greatest total cost to Medicare and the U.S. health system. From the list of 125 negotiation-eligible drugs, the Secretary selects at least 25 drugs to be subject to negotiation for the first year. The bill also caps Medicare beneficiaries out-of-pocket (OOP) costs to $2,000 cap on and requires drug manufacturers to pay rebates if prices increase faster than inflation. The bill also includes provisions requiring more transparency from the drug industry regarding costs and financial relationships.

Lower Costs, More Cures (H.R. 19)— On April 21, Energy and Commerce Committee Ranking Member Cathy McMorris Rodgers (R-WA), Ways and Means Committee Ranking Member Kevin Brady (R-TX), and Education and Labor Committee Ranking Member Virginia Foxx (R-NC) reintroduced the Lower Costs, More Cures Act Lower Costs, More Cures Act which is the GOP’s answer to H.R. 3. This bill requires reporting on excessive price hikes and public disclosure of drug discounts. This bill includes reforms to Medicare Part B such as applying variable ASP percentages based on the cost of the drug, capping maximum add-on payments for certain drugs and biologics, and requiring a site-neutral payment for the administration of a Part B drug at the lower physician fee schedule rate rather than the rate paid to hospitals. H.R. 19 includes provision to ban the “pay-for-delay” practice whereby drug companies enter agreements with generic and biosimilar manufacturers to delay a competing drug from coming to market. The bill also caps OOP costs for Medicare beneficiaries to $3,100. Unlike Democratic proposals, Republicans do not impose penalties on drug manufacturers for increasing pricing faster than inflation nor empower government negotiation of drug prices.