Last week, House Republicans unveiled H.R. 19, a promising new drug pricing bill full of bipartisan ideas that serves as a counterweight to H.R. 3, Speaker Pelosi’s drug pricing effort. Contrary to the partisan, heavy-handed approach of H.R. 3, House Republicans included in H.R. 19 only provisions that had the support of both parties.
While the 350-plus pages of provisions will require extensive study and review, there are already several components of H.R. 19 worth supporting. Here are six things to like in H.R. 19, the Lower Costs, More Cures Act:
It redesigns Part D to better protect patients and taxpayers: NTU has regularly called for Congress to redesign the Part D benefit, and has pointed to the American Action Forum (AAF) proposal as a strong step in the right direction. AAF’s proposal would eliminate Part D beneficiary costs beyond a catastrophic threshold (currently, beneficiaries are on the hook for five percent) and shift the Medicare/taxpayer liability beyond this threshold from 80 percent (under current law) to 20 percent. It appears the H.R. 19 redesign (Sec. 121) would do the same, though it is not identical to the approach taken by AAF. Regardless, this redesign protects patients from exorbitant costs beyond a threshold and protects taxpayers from footing the bill for catastrophic costs. However, it does shift liability to a mix of private insurers and drug manufacturers who participate in the program. How this shift occurs is important, but the shift itself would ensure Part D operates more like a private insurance plan.
It paves the way for more biosimilars and generic drugs to come to market: Through Purple Book codification (Secs. 331-332), Orange Book modernization (Secs. 341-342), and opportunities for enhanced education on biosimilars (Sec. 351), H.R. 19 takes advantage of some light-touch approaches to bringing more generic competition to market. NTU highlighted all three provisions as ways to increase the availability and use of biosimilars in a September 2019 issue brief.
It offers tax relief to Americans in two critical ways: Sec. 401 would make permanent the 7.5-percent AGI threshold on the medical expense deduction. NTU pointed to this provision as an amendment to H.R. 3 worth supporting, writing that “a permanent return to the 7.5-percent threshold would serve as major relief for households who take advantage.” Sec. 403 would include both over-the-counter (OTC) medications and feminine hygiene products as qualified medical expenses for use of health savings account (HSA) dollars. NTU supported both provisions in an October 2019 issue brief.
It contains a number of provisions that will strengthen Medicare and Medicaid against waste, fraud, and abuse: Sec. 503 would require Part D prescription drug plan (PDP) sponsors to report to the Secretary of Health and Human Services (HHS) on potential waste, fraud, and abuse in their plans. Sec. 101 would expand an existing online price transparency requirement at HHS to hospital outpatient departments (HOPDs) and ambulatory surgery centers (ASCs). NTU pointed to the latter provision in a letter to lawmakers on H.R. 3 amendments worth supporting.
It calls for more data and more studies on federal health spending, which may offer future avenues for taxpayer and patient savings: Sec. 507 would require a Medicare Payment Advisory Commission (MedPAC) report on shifting certain drugs currently covered by Part B to Part D. Sec. 203 would require a Government Accountability Office (GAO) report on potential conflicts of interest in state Medicaid drug use review boards and pharmacy and therapeutics (P&T) committees. It is unclear what results these reports would produce, but efforts to save taxpayer dollars or root out potential conflicts of interest in federal health programs are worth applauding. If these provisions are made law, stakeholders can look forward to results that move the ball forward for lowering health costs in one way or another.
It avoids counterproductive, heavy-handed approaches like mandatory negotiations, punitive taxes, and inflation caps: H.R. 3 is a grab-bag of government-first approaches to drug costs, would subject manufacturers to mandatory price negotiations, and levy an up-to-95-percent tax on gross sales of the drug for refusing to accept the government’s price. The Prescription Drug Pricing Reduction Act (PDPRA) in the Senate would include inflation caps that serve as de-facto price controls. H.R. 19 avoids these heavy-handed tactics, a wise choice by policymakers.
While there are plenty of provisions in H.R. 19 worth supporting or applauding, at least one section gives us pause. The legislation includes the so-called BLOCKING Act (Sec. 321), an effort to limit the the six-month exclusivity period granted to certain generic drug manufacturers that challenge brand-name patents. NTU wrote on the BLOCKING Act this week:
“The intent of the legislation is to prevent a small number of manufacturers from intentionally delaying final FDA approval, ‘parking’ their first-to-file applications and preventing subsequent generic manufacturers from entering the market. The House Energy and Commerce Committee reported that the FDA claims this happens ‘an average of five times each year, and each time delays competition an average of twelve months.’
...This legislation, in either form, could lead many generic manufacturers seeking approval through a paragraph IV certification to lose their marketing exclusivity before they ever receive final approval for their drug. This destroys the financial incentive for generic manufacturers to make the paragraph IV certification, and could in turn chill generic competition for expensive brand-name drugs.”
Removing the BLOCKING Act from H.R. 19 would make it a stronger bill.
While questions remain about a number of other provisions in the 350-page bill, H.R. 19 is a counterweight of bipartisan solutions to the damaging, partisan effort to jam H.R. 3 through the House of Representatives this week. Since H.R. 3 will not pass muster in the Senate, lawmakers should return in 2020 ready to debate some of the provisions in H.R. 19 highlighted above. Congress can take action in the new year that lowers drug costs for both patients and taxpayers.