Nancy Pelosi’s New Drug Bill: Even Dems Have Doubts

Gage Skidmore, CC BY-SA 2.0

Democrats still have questions about Nancy Pelosi’s drug pricing plan

Sep 19, 2019

STAT News – For months, Nancy Pelosi has kept even her fellow Democrats in the dark on her plan to lower drug prices.

The big reveal, for the lawmakers, came this week: Pelosi barnstormed the Capitol as if campaigning for office, pitching moderate, progressive, and middle-ground Democratic groups on her plan.

But for many members of Congress, Pelosi’s presentation left more to be desired — even as she’s expected to publicly release it as soon as today.

“[There are] an awful lot of questions, which is natural at this point,” said Rep. Joe Kennedy (D-Mass.), a member of the House Energy and Commerce Committee. “I think we would benefit from seeing some more details.”

The plan would cap out-of-pocket drug expenses for Medicare beneficiaries at $2,000 annually, Primus said, according to the aides.

Medicare would be empowered to negotiate prices for a large group of high-priced drugs, and those negotiated prices would be extended to the commercial market as well — among the boldest and most surprising elements of the leaked plan.

The plans matched the leaked draft.

“People had a lot of questions,” said Rep. Derek Kilmer (D-Wash.), the New Democrat chair.

Even lawmakers who sit on the committees expected to consider the legislation as soon as next week acknowledged they had not seen fleshed-out versions of Pelosi’s proposal … Read more. 

PREVIOUSLY: Hillary Gushes Over Pelosi’s Radical Healthcare Agenda

Pelosi’s “ambitious plan” to cut drug prices

WASHINGTON (AP) — Putting her stamp on the health care issue that worries consumers the most, House Speaker Nancy Pelosi on Thursday unveiled an ambitious plan to lower drug prices for seniors on Medicare and younger people with private insurance.

Pelosi, D-Calif., would empower Medicare to negotiate prices for the 250 costliest drugs, including insulin.

Pharmaceutical companies that refuse to negotiate could face steep penalties. Additionally, drugmakers that hike prices beyond inflation would have to pay rebates to Medicare.

The plan would limit copays for seniors covered by Medicare’s “Part D” prescription drug program to $2,000. And Medicare-negotiated prices would be available to other buyers, such as employer health plans.

The plan is Pelosi’s marker in what’s shaping up as a high-stakes negotiation to determine if a drug pricing compromise can pass Congress this year or if Democrats and Republicans will take their differences into the 2020 elections.

The sweeping legislation leans left politically and appears to be tailor-made for Pelosi’s Democratic majority in the House. But in a signal that Pelosi wants a deal, it also incorporates ideas from the Trump administration and from Republican and Democratic senators.
A group of House Republicans led by Rep. Greg Walden, R-Ore., quickly accused Pelosi of putting “politics over progress,” calling her plan “a socialist proposal to appease her most extreme members.”

Nonetheless, Americans across party lines say lowering prescription drug costs should be a top priority for Congress this year. Overall, 70 percent deemed that a top priority in a poll earlier this month from the nonpartisan Kaiser Family Foundation.

President Donald Trump appears eager to sign prescription drug legislation and lower costs, but most Republicans oppose the Medicare negotiations that are the centerpiece of Pelosi’s plan.

The 2003 law that created Medicare’s prescription drug benefit barred the program from negotiating prices, a restriction Democrats have long opposed.

As a candidate, Trump backed Medicare negotiations. But after Trump was elected president, he seemed to revert to the traditional Republican position that price negotiations are best left to private players like insurance companies.

With tens of billions of dollars in profits at stake, drugmakers are determined to block any major changes to payment policies.

But the industry’s powerful lobbying group, the Pharmaceutical Research and Manufacturers of America, has been taking fire from all sides, from liberal Democrats to pro-business Republicans. Trump once accused drug companies of “getting away with murder.”
Pelosi’s proposal would:

  • Authorize Medicare to negotiate prices for the drugs with the greatest total cost to the program and the U.S. health care system. That includes pharmacy drugs covered through the popular “Part D” prescription benefit, along with “Part B” medications dispensed in doctors’ offices, a category that covers many cancer drugs. The maximum price would be determined using a blend of international prices, an idea similar to a more limited proposal from the Trump administration. Insulin prices would be subject to negotiations. Drug companies that balk at making a deal would face penalties that start at 65% of sales for the drug at issue and would escalate if they hold out.
  • Require drugmakers to pay rebates to Medicare if they hike their prices beyond the increase in inflation. That idea resembles a bipartisan plan from Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore. The senators’ proposal has already cleared a key committee, with Trump’s support. But many Senate Republicans oppose inflation rebates, and it’s unclear what Majority Leader Mitch McConnell, R-Ky., plans to do next.
  • Limit what seniors pay out of pocket for their medications to $2,000 a year. Currently, Medicare’s pharmacy benefit has no cap on copays, and the advent of drugs costing hundreds of thousands of dollars a year has left some seniors saddled with bills that rival a mortgage payment. An out-of-pocket limit also is part of the Grassley-Wyden bill, and the idea also is backed by the Trump administration.

Pelosi’s office says her plan is to have the legislation introduced and moved through House committees to a vote on the floor. If compromise can be reached among House Democrats, the Trump White House and enough GOP lawmakers, a drug pricing package could be added to year-end budget legislation.

Movement in Congress comes at a time when criticism of the industry — from Trump and lawmakers of both parties — appears to be having an effect on prices.

The Commerce Department’s inflation index for prescription drug prices has declined in seven of the last eight months, which is highly unusual. That index includes lower-cost generic drugs.

The story is different for brand name drugs, however. A recent analysis by The Associated Press shows that on average prices are still going up but at a slower pace. Costly brand-name drugs can translate to steep copays for insured patients.

The AP analysis found that in the first seven months of 2019, drugmakers raised list prices for brand name medicines by a median, or midpoint, of 5%.

That does reflect a slowdown. Prices were going up 9% or 10% over those months the prior four years. But there were 37 price increases for every decrease in the first seven months of 2019.