Weekly Policy Blog: Congressional Activity Before August Recess
By: Colorado BioScience Association Date: 07/31/2023
Congress moved forward with its efforts to address drug shortages, drug pricing, pharmacy benefit managers (PBMs), and transparency ahead of the August recess. This policy post covers the discussion draft of the Stop Drug Shortages Act, the Lowering Drug Costs for American Families Act (H.R. 4895), the Modernizing and Ensuring PBM Accountability (MEPA) Act, the Health Care Price Transparency Act of 2023 (H.R. 4822), and the Providers and Payers COMPETE Act (H.R. 3284).
Congress is now on recess until the Senate reconvenes on September 5th and the House reconvenes on September 11th.
Also, read to the end for a brief update on CBSA’s engagement with Prescription Drug Affordability Board (PDAB) implementation work.
On July 28th, the House Energy & Commerce Committee Chair Cathy McMorris-Rodgers (R-WA) unveiled a discussion draft with policy proposals to address the root causes of drug shortages in the U.S. As you can see in the discussion draft and the section-by-section summary, the Stop Drug Shortages Act is designed to provide market flexibility, increase transparency from drug middlemen, hold the FDA accountable and support our supply chains, and require more information to stop shortages. CBSA will be thoroughly reviewing this discussion draft and working with industry partners to determine how best to respond. Comments or feedback can be submitted to firstname.lastname@example.org through August 25th. In addition, please contact CBSA’s Vice President and Counsel for Policy + Advocacy with any questions or feedback regarding a response.
On July 26th, House Democratic Health Committee leaders introduced the Lowering Drug Costs for American Families Act (H.R. 4895, section-by-section summary). The bill was introduced by Ways and Means Committee Ranking Member Richard E. Neal (D-MA), Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), and Education and the Workforce Committee Ranking Member Robert C. “Bobby” Scott (D-VA). The bill would build on the drug pricing provisions included in the Inflation Reduction Act (IRA), which was signed into law by President Biden nearly one year ago, by:
- Extending the inflation penalty to the commercial health insurance market;
- Expanding the government’s ability to negotiate drug prices to the commercial market; and
- Increasing the number of drugs subject to price setting from 20 to 50 starting in 2029.
CBSA continues to be very concerned about how the IRA could chill investment in next-generation treatments, affect access to cures for patients in need, and impact jobs in our industry. The expansion of the IRA is especially concerning because we have not yet seen the effects of the IRA, including the likely unintended consequences on innovation around and patient access to small-molecule drugs for neglected diseases, like the breakthrough sickle cell treatment discussed by BIO chair Dr. Ted W. Love in a recent STAT News article. CBSA will continue to advocate for policies that protect patient access and medical innovation.
PBMs and Transparency
The Modernizing and Ensuring PBM Accountability (MEPA) Act, introduced by Senate Finance Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID), advanced by a roll call vote of 26-1 in the Senate Finance Committee (section-by section summary), and the mark-up was evidence of the broadening bipartisan discussion on PBM reforms. The MEPA Act includes additional transparency provisions, reforms to direct and indirect remuneration, and most importantly the Patients Before Middlemen (PBM) Act (S.1967), which was introduced by Committee Chairman Ron Wyden (D-OR), Ranking Member Mike Crapo (R-ID) and Senators Bob Menendez (D-NJ), Marsha Blackburn (R-TN), Jon Tester (D-MT), and Roger Marshall (R-KS).
CBSA was particularly pleased to see the inclusion of the PBM Act in the MEPA Act following CBSA’s work to urge Colorado’s Congressional delegation to support the PBM Act during our recent Hill visits. CBSA’s support for the PBM Act is outlined in this letter that CBSA sent to Senator Michael Bennet and Senator John Hickenlooper on July 12th.
The PBM Act would effectively “de-link” PBM revenues from drug prices for Medicare Part D beneficiaries. The fees PBMs receive could no longer be connected to the price of a drug or any discounts and rebates. The MEPA Act would also reform pharmacy reimbursement in Medicare Part D and prevent “spread pricing.”
In addition, the House Ways & Means Committee marked up two healthcare transparency bills. Both the Health Care Price Transparency Act of 2023 (H.R. 4822) and the Providers and Payers COMPETE Act (H.R. 3284) were approved along party lines, with Democrats expressing concern that private equity in healthcare was not addressed. The legislation aims to increase transparency from PBMs and plans, mitigate healthcare costs, and address prior authorization practices in Medicare Advantage plans. The Health Care Price Transparency Act builds on the bipartisan policies that passed out of the Energy & Commerce Committee earlier in July.
Since three committees have passed PBM transparency bills (with the Education & Workforce Committee passing bills on July 12th), the House will need to reconcile their proposals prior to House floor action.
This activity at the federal level mirrors similar activity at the state level in Colorado to address PBMs and drug pricing. This past legislative session, HB23-1201 prohibited the practice of “spread pricing” by PBMs and HB23-1227 gave the Division of Insurance more direct oversight over PBMs. In addition, HB23-1225 extended and expanded the scope of the Prescription Drug Affordability Board (PDAB) established in 2021 by SB21-175. Implementation of the PDAB is in full swing, with the Prescription Drug Affordability Advisory Council (PDAAC) meeting on July 31st and the PDAB meeting on August 4th to select drugs for an affordability review in order to set an upper payment limit on certain drugs.
CBSA is working closely with our members and our national partners at BIO and PhRMA to proactively engage every step of the way, most recently to express significant concerns about critical errors and inaccuracies in the data and methodology used to develop the Prioritized List of drugs the Board is using to guide their selection of products for affordability review. We also continue to emphasize our opposition to the creation and enforcement of upper payment limits in general due to the negative unintended consequences we believe will occur on patient access to medicines, on healthcare providers purchasing medicines, and on the market for innovative biopharmaceutical products.