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Covid-19, Rare Diseases Frame Drug Pricing Debate in Congress

April 7, 2021, 9:35 AM

Tackling high drug prices will get a renewed focus in Congress this year as lawmakers turn their attention to boosting access to treatments for Covid-19, rare diseases, and other life-threatening conditions.

Roughly two dozen bills are floating around Congress that would alter how drugs get marketing exclusivity, require companies to report planned price hikes, and allow the government to directly negotiate prices. One bill that would modify eligibility for five years of exclusivity sailed through the Senate but awaits action in the House. The others have yet to see action.

House Speaker Nancy Pelosi (D-Calif.) said last month that Democrats were weighing whether to add a provision to upcoming infrastructure legislation that would let the government negotiate drug prices. Such a provision is still in the works.

Pre-pandemic, drug manufacturers faced heavy criticism from lawmakers over their pricing practices, particularly for insulin. Discussions over high prices evaporated once Covid-19 hit, and the pharmaceutical industry gained positive public attention as vaccines and Covid-19 treatments rolled out over the past year.

Congress has picked up the drug price debate again now that the national vaccination effort is well underway. But the focus has narrowed in on some of the more complicated aspects of drug policy—like how the Orphan Drug Act works to extend marketing exclusivity to companies when they make products for small populations.

Although direct government negotiation for drug prices is popular among most Democrats, it’s unlikely such a sweeping change would make it through Congress, policy analysts say. Drug pricing policy is also dependent on regulatory changes within the federal agencies, but the Biden administration so far has spent its time rolling back Trump-era rules.

Here’s a rundown of the bills under consideration, which cover topics ranging from expanding patient access to enabling drug importation.

Rare Diseases

Accelerating Rare Treatments: H.R. 1184, introduced Feb. 18 by Rep. Paul Tonko (D-N.Y.), would require the Department of Health and Human Services to submit an annual report to Congress detailing how many applications the Food and Drug Administration gets for products to be covered by the Orphan Drug Act. That report would break down applications by the type of disease, how many people suffer from it, and prevalence in the U.S. It would also ensure rare disease experts are asked to weigh in on the applications.

Orphan Drug Exclusivity: S. 250, introduced Feb. 4 by Sen. Bill Cassidy (R-La.), would stop manufacturers from getting seven years of orphan drug exclusivity unless they show they can’t recoup the costs of making a drug or delivering it to the U.S. market within 12 years.

Drug Discounts: H.R. 853, introduced Feb. 4 by Rep. Peter Welch (D-Vt.), would allow certain hospitals to access government discounts on drugs designated for a rare disease as long as those drugs aren’t used to treat rare conditions. The bill would limit exclusions to the federal 340B program, which requires drugmakers to give discounts to hospitals that treat primarily low-income people.

Covid-19 Treatments

Ensuring Seniors’ Access: H.R. 975, introduced Feb. 11 by Rep. Sean Casten (D-Ill.), would require Medicare and Medicare Advantage plans to cover all drugs that are intended to treat Covid-19 without out-of-pocket costs during the public health emergency. Requiring prior authorization for a Covid-19 drug would also be prohibited. That’s when a doctor has to get an insurer’s go-ahead before prescribing a medication.

Emergency Manufacturing: S. 187, introduced Feb. 3 by Sen. Elizabeth Warren (D-Mass.), would create a new office within the HHS to manufacture and distribute Covid-19 medical products or medical products that are in short supply. The bill outlines how the government should obtain rights to make those products and that they would pay a “reasonable” amount for using any invention related to a public health emergency, including Covid-19 vaccines.

Market Reciprocity: H.R. 724 and S. 154, introduced Feb. 2 by Rep. Chip Roy (R-Texas) and Sen. Ted Cruz (R-Texas), would allow medications or medical devices approved in other countries to be marketed in the U.S. even if the FDA hasn’t approved them, as long as there is an unmet need for the product.

Price Gouging: H.R. 675, introduced Feb. 1 by Rep. Jan Schakowsky (D-Ill.), would ban anyone from selling consumer goods or services during the public health emergency for a price that is “unconscionably excessive” and indicates the seller is using the pandemic to increase prices “unreasonably.”

Licensing Restrictions: H.R. 597, introduced Jan. 28 by Rep. Jan Schakowsky (D-Ill.), would limit licensing and price restrictions for medicines meant to treat Covid-19 or other public health emergencies. For Covid-19 drugs any licensing would have to be “open and nonexclusive,” meaning that another entity can make or sell the drug and then pay the patent holder “reasonable royalties.”

Patient Access: H.R. 467, introduced Jan. 25 by Rep. Anthony Gonzalez (R-Ohio), would amend the Families First Coronavirus Response Act and the CARES Act to require health plans for groups or individuals to cover authorized Covid-19 antibody treatments without cost sharing. Patients would need a positive Covid-19 test, and coverage would include administration of the therapies.

Transparency Initiatives

Reporting Price Hikes: S. 898, introduced March 23 by Sen. Tammy Baldwin (D-Wis.), would require manufacturers to report planned drug price increases when the hike will be 10% or more within a year or 25% or more over a 36-month period.

Pharmacy Liaisons: S. 298, introduced Feb. 8 by Sen. Marsha Blackburn (R-Tenn.), would require the Government Accountability Office to study the role pharmaceutical benefit managers play in the drug supply chain and provide Congress with “appropriate policy recommendations.” These managers dictate how drugs will be covered by insurance plans.

Drug Importation

Canada Imports: H.R. 832 and S. 259, introduced Feb. 4 by Rep. Chellie Pingree (D-Maine) and Sen. Amy Klobuchar (D-Minn.), would require the FDA to let consumers import medications for their personal use from Canada. The drug would have to be bought from an approved Canadian pharmacy and dispensed by a pharmacist licensed in Canada.

Patents

New Drug Exclusivity: S. 415, introduced Feb. 24 by Sen. Bill Cassidy (R-La.), would modify which drugs qualify for five-year marketing exclusivity under the Federal Food, Drug, and Cosmetic Act. The bill clarifies how a drug’s chemical makeup will influence whether it qualifies for that exclusivity. The Senate passed the bill March 10 by unanimous consent, and it is awaiting action in the House.

Generic Drugs: H.R.153, introduced Jan. 4 by Rep. Bobby Rush (D-Ill.), would ban brand name drug companies from paying generic manufacturers to delay bringing their products to market. It would also block biologic drugmakers from paying their generic counterparts to delay the launch of biosimilars.

Negotiating Drug Prices

At least a half-dozen bills in the House and Senate would remove restrictions for the federal government to negotiate drug prices directly for Medicare consumers.

Medicare Expansion: H.R. 1227 and S. 386, introduced Feb. 23 by Rep. Antonio Delgado (D-N.Y.) and Sen. Michael Bennet (D-Colo.), would fund government-administered health plans for people who don’t qualify for Medicare. Direct government negotiation over prices isn’t the crux of this bill, but the HHS secretary would be responsible for negotiating drug payment rates for medications.

Amending Obamacare: S. 352, introduced Feb. 22 by Sen. Mark Warner (D-Va.), would establish a health plan option for people who don’t qualify for Medicare and lack employer-sponsored insurance. The bill would also alter the Social Security Act to allow the government to directly negotiate Medicare drug prices.

Four other bills focus primarily on amending the Social Security Act to let the government directly negotiate drug prices in Medicare. They are S. 833, H.R. 2071, H.R. 2139, and S. 908.

To contact the reporter on this story: Jacquie Lee in Washington at jlee1@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

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