Previously we wrote about the bills intended to combat drug prices that have been introduced in Congress. Now it is time for a more in-depth look at the major pieces of legislation. Below are the four most important drug pricing bills currently before Congress. They are substantive, will reduce drug prices, possess significant support, and stand a reasonable chance of passing.
The first bill is S. 41, the Medicare Drug Price Negotiations Act. This bill is sponsored by Senator Amy Klobuchar (D-MN) and is currently before the Senate Finance Committee. It requires the Secretary of Health and Human Services to negotiate lower Medicare Part D drug prices on behalf of seniors enrolled in Medicare.
Over 75% of seniors take prescription medications, and Medicare Part D, the program that provides prescription drug coverage, accounts for 1/6 of all Medicare spending. The federal government pays more for drugs purchased for Medicare enrollees because it is legally barred from negotiating lower prices with drug companies. The Veterans Administration, which does have the power to negotiate lower prices, pays far less for drugs.
Premiums and out-of-pocket costs that seniors pay for prescription drug coverage under Medicare Part D keep going up. Annual premiums are expected to increase to $846 by 2025, with an annual deductible of $645. The federal government is paying more as well. Medicare’s massive volume (41 million people are enrolled) ensures that government would be in a strong negotiating position to obtain good prices for Medicare patients, taxpayers, and indirectly other prescription drug consumers as well. This legislation would directly lower drug costs for millions of seniors and have a substantial impact on the entire drug market.
Here is a letter in support of the bill on behalf of Consumers Union, Consumer Action, Consumer Watchdog, Consumer Federation of America, and U.S. PIRG.
The second bill is S. 974, the Creating and Restoring Equivalent Access to Samples (CREATES) Act. The bill is being sponsored by Senator Patrick Leahy (D-VT) and is currently before the Senate Judiciary Committee. It outlaws anticompetitive practices and deters pharmaceutical companies from blocking cheaper generic alternative drugs from entering the marketplace.
Brand name drug companies often prevent potential generic competitors from getting samples of the branded medicine so they can’t perform the tests needed to show their products are equivalent (which is required for FDA approval). The CREATES Act allows generic drug manufacturers facing this tactic to file suits in federal court to get the samples they need. It also authorizes judges to award damages in order to deter future misbehavior.
Another delaying tactic is when brand name manufacturers whose products require a distribution safety protocol don’t allow their generic competitors to participate in that safety protocol, which again undermines efforts to get FDA approval. The CREATES Act gives the FDA more discretion to approve alternative safety protocols, rather than require companies to develop shared safety protocols.
Here is a longer summary and list of groups in support of the bill.
The third bill is S. 637, the Creating Transparency to Have Drug Rebates Unlocked (C-THRU) Act. This bill is sponsored by Senator Ron Wyden (D-OR) and is currently also before the Senate Finance Committee. It requires pharmacy benefit managers (PBMs) to publicly disclose data regarding rebates and discounts and their impact on Medicare enrollees and Medicare’s prescription drug program overall.
The C-THRU Act would require PBMs to disclose the aggregate amount of rebates they get from pharmaceutical companies and what percentage of those rebates actually go to seniors enrolled in Medicare. These disclosures would be publicly available online. Right now the PBM market lacks transparency and accountability, or even basic information about its operations.
And after two years of public reporting of these disclosures, a minimum percentage of rebates and discounts would have to be passed from a PBM to a health plan, thereby lowering premiums and other amounts paid by patients. The bill would also require cost-sharing for Medicare prescription drug enrollees to be based off the negotiated price of the drug as agreed to by the drug manufacturer and the PBM. This would ensure Medicare Part D enrollees fully benefit from discounts and rebates provided by drug manufacturers.
Here is a short summary of the bill.
The last bill is an amendment, the Franken Collins Amendment to S.934 – the FDA Authorization Act of 2017. This amendment is sponsored by Senators Al Franken (D-MN) and Susan Collins (R-ME). It has been added to the FDA user fee reauthorization bill, which was approved on May 11th by the Senate Health, Education, Labor, and Pensions Committee by 21-2. Currently it is waiting to come up for a vote.
This amendment sets a timeframe of no more than eight months for the FDA to prioritize the review of new drugs introduced into uncompetitive markets. It also improves the visibility of the backlog of priority review applications, provides more resources and communication to improve the quality of applications when they are submitted, and enhances the FDA’s ability to discern potential drug shortages by boosting its capacity to track drug trends.
Here is some information about the bill and its amendments.
We support all of these bills, and urge members of Congress to move swiftly and expedite their approval.