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Three drug bills attempt to cap costs

The Senate Finance Committee's bill would cancel planned cuts to Medicaid disproportionate-share hospital payments for 2020 and 2021.

Susan Morse, Managing Editor

The House has passed a bill to lower the price of prescription medications by allowing Medicare to negotiate prices with pharmaceutical companies, but the bill is expected to get nowhere in the Senate.

House Speaker Nancy Pelosi's Lower Drug Costs Now Act of 2019 passed by a vote of 230-192 Thursday, largely along party lines.

Republicans opposed to the House bill called it price fixing, as it would allow the government to negotiate the cost of more than 50 drugs directly with pharmaceutical manufacturers.

The pharmaceutical trade group PhRMA said it would kill innovation, citing a study which showed the legislation could result in at least 56 fewer new medicines for patients over 10 years. Companies with the affected medicines could see their revenues cut by more than half, leading to a nearly 90% reduction in new medicines developed by small U.S. biotech companies, PhRMA said.

The Senate may not even vote on the bill. Senators are not expected to take it up until after the impeachment trial, according to Politico.

OTHER DRUG BILLS

Republicans in the House Committee on Energy and Commerce released the Lower Costs, More Cures Act, which would set a $3,100 cap on Medicare Part D beneficiaries' out-of-pocket costs, at which point beneficiaries would enter the catastrophic coverage phase, and would allow beneficiaries to pay those costs over the course of a year instead of having to pay them up front, according to the Advisory Board.

This bill is similar to a Senate Finance Committee bill, called the Prescription Drug Pricing Reduction Act.

The Prescription Drug Pricing Reduction Act, released by Senate Finance Committee Chairman Chuck Grassley, R-Iowa and Ranking Member Ron Wyden, D-Ore., is an updated version of legislation the committee approved in July.  The update was a reaction to criticism that the original bill would save money for the government, but not necessarily for consumers.

The Senate Finance bill would mandate rebates to Medicare for drugs that have price increases greater than the rate of inflation. This plan is backed by the White House.

WHY THIS MATTERS

One important aspect to the Senate Finance Committee's bill is that it would cancel planned cuts to Medicaid disproportionate-share hospital payments for 2020 and 2021, followed by Medicaid DSH payment reductions of $8 billion for each of fiscal years 2022 through 2025.

THE LARGER TREND

Legislator are increasing the pressure on drug companies to lower the price of prescriptions to make them more affordable for patients and to reduce climbing healthcare costs.

Prescription spending takes up 17% of all spending on medical goods and services provided directly to patients and is expected to grow by an average of 6.3% annually from 2017 to 2026, said Surescripts, citing figures from the Office of the Actuary for the Centers for Medicare and Medicaid Services.

Just a $10 increase in patient copay increases the likelihood of a patient failing to fulfill a prescription, according to the Surescripts 2019 Prescription Transparency Report.

Medication adherence is a big issue for providers and payers. It is estimated that one in three patients fail to fill, or refill, a prescription.

ON THE RECORD

America's Essential Hospitals applauding the Grassley/Wyden bill for repealing DSH payment cuts.

"These damaging reductions in federal support -- up to two-thirds of all Medicaid DSH funding annually over the next six years -- threaten access to care for low-income, working families and others who face financial hardships. Eliminating two years of cuts would ease the uncertainty hospitals face as they consider how to meet their community's needs and maintain access to care," said Beth Feldpush, senior vice president of Policy and Advocacy.

Grassley said, "Seniors and Americans with disabilities will see even lower out-of-pocket costs. This bipartisan legislation also helps pay for critical health programs nationwide. And it achieves all of this without charging the taxpayer a dime more."

"For too long, patients in other countries have paid significantly less than Americans for the same medications," said Ways and Means Committee Chairman Richard E. Neal after the House passed the Lower Drug Costs Now Act of 2019. "Not only does H.R. 3 bring down drug prices, it caps Medicare beneficiaries' out-of-pocket prescription spending at $2,000 and saves the U.S. government nearly $500 billion."

The Association of American Medical Colleges Chief Public Policy Officer Karen Fisher, said the Senate Committee on Finance bill would extend the authorization for the Patient-Centered Outcomes Research Institute (PCORI) for 10 years.

"Teaching hospitals, while representing 5% of all hospitals in the nation, account for 25% of all Medicaid hospitalizations and 32% of all hospital-based charity care," Fisher said of the delay in DSH cuts in the bill. "We also are grateful that the committee includes a 10-year reauthorization for PCORI, which supports comparative effectiveness research that aids doctors and patients in determining the best course of action together. Research funded by PCORI has already led to better-informed decision-making for patients battling cardiovascular disease, type 2 diabetes, prostate cancer, chronic pain, and other illnesses."

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

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