Senate Finance Committee Reveals Drug-Pricing Legislation

On July 23, the U.S. Senate Finance Committee released a long-anticipated drug-pricing bill. The legislation, which is slated for mark up on Thursday, July 25, includes significant changes to drug-pricing policy in Medicare and Medicaid. As written, the bill calls for restructuring of the Part D benefit, imposing much-debated inflationary rebates in Medicare Parts B and D, and increasing the rebate cap in Medicaid.

New Structure for Part D
The bill restructures Part D, eliminating the donut hole and shifting manufacturer liability to the catastrophic phase. Beneficiaries would pay costs up to $415 deductible. After meeting their deductible, during an initial coverage phase, beneficiaries would pay 25% of drug costs and plans would cover 75%. The out-of-pocket spending cap for beneficiaries would be $3,100. 

During the catastrophic phase, Medicare would pay 20% for brand drugs, plans would cover 60%, and drug makers would pay 20%. For generics, Medicare would pay 40% and plans would pay 60%. As written, the legislation calls for this new structure to be phased in starting in 2022, and be in full effect by 2024.

Part B
The drug-pricing bill includes the following changes to Part B: 

• Establishes requirement that manufacturers pay rebates when drugs and biologicals prices increase faster than inflation, as measured by the CPI-U. (Biosimilars or vaccines paid under Part B are excluded from this measure.)
  
• Sets a new maximum add-on payment for drugs, biologics and biosimilars. 
  
• Increases payments for biosimilars to encourage their use over brand biologics.
  
• Requires drug, biologic and biosimilars makers to exclude the value of coupons provided to privately insured individuals when they report a drug’s ASP to HHS. However, the bill would not include contributions to patient assistance programs or foundations.
  
• Requires that patients be better informed about cost sharing.

The Senate is not slated to vote on the legislation until September.

Concurrently, the House is working on its own drug-pricing legislation that is due for release in September. ACCC's policy team will be following developments on Capitol Hill closely and providing updates to its membership.

Source: Inside Health Policy
Posted 07/24/2019