January 13, 2020
In the latest chapter of a familiar story, drug prices continue to climb and have been met with showboating of policy options from elected officials, but there has yet to be any agreement or action. While there is still a chance that legislation could pass this year, the window of opportunity is quickly closing and impeachment proceedings and the health care politics around Medicare for All proposals have further reduced the odds.
Current Drug Pricing Proposals
Any meaningful reform is likely to draw from the following proposals:
Speaker Nancy Pelosi’s (D-CA) “Lower Drug Costs Now Act of 2019,” which would, among other things: 1) create a $2,000 out-of-pocket Rx maximum for Medicare beneficiaries; 2) allow Medicare to directly negotiate with drug companies and make negotiated prices available to commercial market; 3) tie drug prices to those paid in other countries; and 4) cap Rx price inflation.
- Partisan and Trump Administration opposes
Senators Ron Wyden (D-OR) and Chuck Grassley’s (R-IA) “Prescription Drug Pricing Reduction Act (PDPRA),” which would, among other things: 1) create a $3,100 out-of-pocket Rx maximum for Medicare beneficiaries; 2) cap Rx price inflation to CPI for Medicare beneficiaries; and 3) limit price increases in Medicare Part B.
- Bipartisan and Trump Administration supports
Intraparty divisions and partisanship will be roadblocks for compromise:
Progressives within the House Democratic Caucus believe the Pelosi bill doesn’t go far enough, and conservatives within the Senate Republican Caucus have balked at the inflation cap within the Wyden/Grassley bill.
Separately, the Trump Administration wants drug prices to be lower in the U.S. than in other developed countries, expanding upon his original international price index proposal.
Meanwhile, partisanship recently killed two other drug pricing efforts:
- Senate Minority Leader Chuck Schumer (D-NY) blocked a bipartisan bill, known as the Affordable Prescriptions for Patients Act of 2019, which would amend the Federal Trade Commission Act to prohibit anticompetitive behaviors by drug product manufacturers.
- Senators Durbin (D-IL) and Grassley (R-IA) attempted to advance the Drug-Price Transparency in Communications Act, but objections from Senator Toomey (R-PA) derailed the effort.
In the end, a more watered down and indirect proposal to lower drug prices could be the only passable legislation for this Congress, which would crack down on tactics used by brand-name drug manufacturers to dissuade generic competitors, aiming to eliminate anti-competitive behavior and promote free market competition.
More Topics
Policy & Advocacy
Pharmacy/Prescription Drugs
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