Progressives may torpedo HR3 for not doing enough; here's what it *would* do
As noted a few days ago, House Democrats have officially scheduled a floor vote on H.R. 3, the Lower Drug Costs Act of 2019, for next week:
Pelosi, Hoyer, Pallone, Neal and Scott Joint Statement Announcing Floor Vote on H.R. 3
Washington, D.C. – Speaker Nancy Pelosi, Majority Leader Steny Hoyer, Energy & Commerce Committee Chairman Frank Pallone Jr., Ways & Means Committee Chairman Richard E. Neal and Education & Labor Committee Chairman Bobby Scott released the following joint statement:
“Next week, the House of Representatives will pass the Elijah E. Cummings Lower Drug Costs Now Act.
“We have now received enough guidance from CBO to bring the Lower Drug Costs Now Act to the Floor and to reinvest its savings in one of the most transformational improvements to Medicare since its creation.
“We are going to give Medicare the power to negotiate lower drug prices, and make those prices available to Americans with private insurance as well as Medicare beneficiaries. American seniors and families shouldn’t have to pay more for their medicines than what Big Pharma charges in other countries for the same drugs.
“Last year, House Democrats promised to lower health care costs by lowering the price of prescription drugs For The People. We are proud to deliver on that promise.”
Today, The Hill reports that the Congressional Progressive Caucus is considering whether or not to vote against H.R. 3 because the final version being voted on cut out several progressive provisions:
[Progressives] are pushing for increasing the number of drugs that can be negotiated as well as extending lower drug prices to people who are uninsured, and fully repealing the current ban on Medicare negotiating prices.
...There has also been confusion over whether leadership will allow an amendment from Jayapal that was adopted in the House Education and Labor Committee to remain in the bill. The amendment would extend limits on drug price increases to people in private employer-sponsored health plans, not just those on Medicare.
OK, so that's what didn't make the final cut (or may not have, in the case of Jayapal's amendment). I figured it'd be a good idea to list what the bill does include, and this article by Billy Wynne & Alyssa Llamas from the Commonwealth Fund seems to do a pretty good job. Technically it's a comparison of the House and Senate drug bills, but I'm just listing the House points since there's likely no chance of the Senate actually passing theirs anyway:
I. Drug Price Negotiation
Covered Drugs: 250 high-cost, brand-name drugs with no generic or biosimilar competitor. New brand-name drugs with no generic or biosimilar competitor with launch prices in excess of the median household income. The HHS Secretary would negotiate the price for at least 25 drugs annually beginning in 2023, at least 30 drugs in 2028, and at least 35 drugs beginning after 2032. Selected drugs would retain negotiated prices until two generic or biosimilar products are available.
Payment Determination and Selected Countries: Sets an upper limit price in negotiations at 1.2 times the volume-weighted average of the price in Australia, Canada, France, Germany, Japan and the United Kingdom.
Participation and Penalties: Manufacturers who decline to negotiate after being selected will be assessed an escalating excise tax on the manufacturers’ annual gross sales. The excise tax would begin at 65 percent and increase by 10 percent quarterly until the manufacturer is compliant and caps out at 95 percent.
Application: Applies negotiated prices to Medicare and allows flexibility for Medicare Advantage and Medicare Part D to use tools to negotiate even lower prices. Requires manufacturers to offer negotiated prices in the commercial market and individual and group plans can choose whether to accept those rates.
II. Medicare Part B & D Inflation Rates
Inflation Rebates: Requires manufacturers to pay a rebate to the Department of Treasury for the amount that they raised the prices of Medicare Part B or D drugs above the rate of inflation since 2016.
III. Medicare Part D Redesign
Annual Out-of-Pocket Cap: Limits spending to $2,000 beginning in 2022.
Reinsurance in the Catastrophic Phase: Lowers federal reinsurance to 20 percent, increases insurers’ share to 50 percent, and requires manufacturers to pay 30 percent. Manufacturers would also be required to pay 10 percent of costs in the initial coverage phase.
Letting Medicare negotiate for drug pricing has been a major Democratic goal for decades, and it would have a huge positive impact. Capping drug OOP costs to $2,000/year for Medicare Part D enrollees seems like a pretty important improvement as well. As I've noted before, prescription drugs are one of the areas of healthcare policy which aren't really in my wheelhouse, so I can't really comment definitively as to whether this is "enough", but it sounds like a pretty good bill to me and it would be the height of irony if this bill ended up failing to even make it to the GOP-controlled Senate because it can't even pass a Democratically-controlled House.