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Pelosi drug bill would give HHS Secretary Alex Azar authority to negotiate prices on 25 drugs

The maximum price that could be set is 1.2 times the average international market price.

Susan Morse, Senior Editor

House Speaker Nancy Pelosi unveiled a drug bill Thursday that would allow Health and Human Services Secretary Alex Azar to negotiate prices with pharmaceutical companies on an estimated 25 drugs a year.

Under the Lower Drug Costs Now Act of 2019, also known as H.R. 3, the cost for the drugs could be no more than 1.2 times the mean or average price of what consumers pay internationally in Australia, Japan, Canada, the United Kingdom, France and Germany, Pelosi said during Thursday's press conference.

The bill ends the ban for the Secretary to negotiate for lower drug prices for Medicare. These prices would apply and be made available to all Americans, she said.

"And we do think there could be very strong, bipartisan support for this legislation." Pelosi said, adding the House is hoping to have White House buy-in.

"That's the route to votes in the Senate," she said.

WHY THIS MATTERS

Legislators have been working to bring down the cost of prescription drugs.

Many have cited the lower cost for prescription drugs in other countries.

Americans are subsidizing those lower international rates, said Rep. Frank Pallone Jr., chairman of the House Committee on Energy and Commerce.

Azar must identify over 200 of the most expensive drugs for which there is no competition and on an annual basis, negotiate for at least 25, plus insulin medication, he said.

The top 25 drugs represent about 23 percent of the spend on prescription drugs, Pallone said.

Examples of the higher cost for Americans include Lantus, an insulin drug for diabetes, that costs four times more here than in Canada, the U.K. 
Germany and Australia, Pallone said. Dulera for asthma costs three times more in the United States than it does in Canada, he said. And Lucentis, for macular degeneration, costs seven times more than it does in France.

Bobby Scott of Virginia, chairman of the Education and Labor Committee, said employers spend  $84 billion a year on drugs each year. The top ten drugs cost about $14 billion a year.

"H.R. 3 addresses this problem by allowing working families and employer sponsored plans to access the same savings that will be negotiated for Medicare," Scott said.

In an opposing view, Stephen J. Ubl, CEO and president of the Pharmaceutical Research and Manufacturers of America, said Speaker Pelosi's plan would give the federal government unprecedented, sweeping authority to set medicine prices in public and private markets while importing price controls from other countries that restrict access to innovative medicines.

Ubl suggested policymakers instead pursue practical policy solutions such as sharing negotiated savings with patients at the pharmacy counter, lowering coinsurance in Medicare Part D, increasing transparency on patients' costs and promoting value-based contracts.

The House legislation H.R. 3, which was leaked earlier this week, was formallly introduced by Pelosi, Pallone, Scott and Rep. Richard Neal on Thursday. It will go before the chairmen's respective committees: Energy & Commerce, Education & Labor and Ways & Means, to be marked up and sent to the floor of the House.

ON THE RECORD REACTION

PhRMA President and CEO Stephen J. Ubl said, "Speaker Pelosi's radical plan would end the current market-based system that has made the United States the global leader in developing innovative, lifesaving treatments and cures. It would upend the successful Medicare Part D program that 40 million seniors rely on without any guarantee that savings would be used to lower costs at the pharmacy counter."

The Campaign for Sustainable Rx Pricing Executive Director Lauren Aronson.
said, "The plan unveiled by leaders in the House reflects several key reforms that have won bipartisan support, including measures to reform the Medicare Part D program by giving Big Pharma more skin in the game, capping out-of-pocket costs and keeping price hikes below the rate of inflation."

Matt Eyles, president and CEO of America's Health Insurance Plans, said, "For too long, Big Pharma has taken advantage of government-granted monopolies to set outrageous launch prices, eliminate competition and increase prices on the same products year after year. This legislation advances several key proposals that have bipartisan support, such as out-of-pocket limits for seniors and ensuring manufacturers have meaningful accountability for their prices and price increases."

Debra Whitman, executive vice president and chief public policy officer at AARP said, "It's shocking to see how much lower drug prices would be today if price increases did not exceed the rate of general inflation. Instead, older Americans are struggling to afford the medications they need to stay healthy."

THE LARGER TREND

THE AARP Public Policy Institute said in a newly-released Rx Price Watch report that the average annual price for widely used prescription drugs in 2017 was nearly $20,000.

The analysis found that the retail prices for 754 widely used brand name, generic, and specialty prescription drugs increased by an average of 4.2% in 2017, well above the general inflation rate of 2.1% for the same period.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com