Drug Pricing Update
by Johanna Gray

August is typically quiet in Washington as Congress goes on recess and everyone else goes on vacation. Like so much of life these days, this August isn’t normal and has been pretty busy, especially on policies related to drug pricing. Here’s what you need to know:

• Bipartisan Infrastructure Framework: We updated you last month about rumors that the infrastructure package would include drug pricing policies as a way to pay for the investments in the rest of the bill. The bill that ultimately passed the Senate only included two policies, neither of which especially impacts HTCs. The first is a policy that would have manufacturers reimburse the Medicare program for Part B drugs where there is waste because not all of the product in a vial is used. This is aimed at some cancer drugs, so while we don’t anticipate it affecting bleeding disorders treatments, some of our manufacturers do make products that could be affected. The second policy is a delay of a rule that would have instituted new requirements for PBMs. The bill has passed the Senate and has moved over to the House, where it is likely to be paired with a reconciliation bill (see below for more details).
• Most Favored Nation Policy: The Biden Administration released a proposed rule to officially rescind the Most Favored Nation policy implemented by the Trump Administration. This policy would have tied spending for drugs in Medicare to the (much lower) rates paid in other countries. Lawsuits kept the rule from taking effect in January 2020 as scheduled, and the Biden Administration has now rescinded it. Though, the Proposed Rule does note that the Administration is still considering drug pricing policies and so it didn’t close the door on implementing something like the MFN in future years.
• Biden Statement on Drug Pricing: President Biden made a statement and released a factsheet with his priorities for drug pricing reform, which includes allowing Medicare to negotiate drug prices, requiring rebates for drugs whose prices increase too quickly, increase competition and potentially allow for more drugs to be imported from Canada. Much of these policies would require Congress to act, but it does start the negotiation process (pun intended!).
• Reconciliation Bill: Finally, Democrats in the House and Senate are working on a reconciliation bill to accompany the infrastructure bill. The Senate passed a budget resolution with reconciliation instructions that direct a number of Committees to develop policies hitting certain budget goals, which will total $3.5T. Health care policies on the table include more significant drug pricing reforms (perhaps in line with what President Biden has outlined?), as well as potential expansions to Medicare to cover dental, vision and hearing aids, potentially lowering the Medicare eligibility age, expansions to Medicaid, and/or creating paid family and medical leave. This memo from the Senate Democrats has an outline of what they are considering. There are still many steps and there will be much political posturing before anything could become law. We will continue to monitor, advocate and update Alliance members as the debate progresses.