Navigating Pricing for Oncology Drugs

The Elijah E. Cummings Lower Drug Costs Now Act (H.R.3) aims to deliver something a recent poll shows the overwhelming majority of Americans (88 percent) want: lower drug costs. H.R.3 is the 116th Congress’s attempt to bring the drug pricing negotiation practices successfully used in other countries to Medicare beneficiaries.  

Medicare is the single largest purchaser of pharmaceuticals in the U.S. Unlike private insurers and the Veterans Health Administration, which freely negotiate drug prices for their beneficiaries, Medicare is currently prohibited by law from doing so, resulting in higher consumer costs for prescription drugs than any other health plan in the U.S. Some of these drugs can carry a hefty price tag. The price of prescription drugs in this country has risen steadily throughout the years, and it now accounts for 10% of national healthcare spending and nearly 20% of health benefit costs for large employers and Medicare. 

Medicare is mandated to cover all approved cancer drugs, but only at 80 percent of the total drug cost (at least initially). The remaining 20 percent usually falls directly into the laps of patients. This can make expensive cancer treatments unaffordable to patients who live on fixed incomes. In the U.S., it is common to see drug prices three times that of the same drug sold in countries that do permit price negotiations. H.R.3 would also put a cap on out-of-pocket spending for Part D beneficiaries. While millions of Medicare beneficiaries now play upward of $6,000  for their drugs, H.R.3 would cap spending at $2,000. 

The sheer number of drugs approved by the FDA means the U.S. surpasses all other countries in the quantity of pharmaceuticals on the market. But this volume does not always result in access. However, other countries experience considerable delays to market entry that the U.S does not. Additionally, there is frequent public outcry when a drug is excluded from the market in countries like Australia.  

ACCC Responds

Due to H.R.3’s current language (or lack thereof), various stakeholders have attempted to influence the content of the legislation. Some have gone as far as to try to prevent the passage of the bill altogether. Our concern lay in the lack of language detailing how provider reimbursement will be affected by the legislation. If H.R.3 is implemented without proper consideration, smaller cancer programs and practices may be at risk of closing. ACCC has taken a direct approach to responding to this Act by contacting legislators and sharing a document that outlines our drug, diagnostics, and biomarker reimbursement principles. The document asks lawmakers keep the following in mind when modifying the legislation:  

It is our hope that the changes currently being made to H.R.3 will address our concerns about provider reimbursement. ACCC will continue to practice careful deliberation in advocacy while leveraging its decades of health policy experience.