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Monday, November 15, 2021

Infrastructure Bill Gives US Government Toehold For Drug Price Negotiations

 

Congress just passed the widely debated infrastructure bill, HR 3684, which funds much needed upgrades for the nation’s transportation and other infrastructure. One of its provisions allowed the US government to negotiate drug prices, but the entire safety net bill was stripped from the infrastructure bill. (117th US Congress, 2021) This gives big pharma a chance to cut the provision entirely from the safety net bill which provides paid family leave, childcare, and other benefits.

 The US consumes more pharmaceuticals, by a huge margin, than any other country. The government’s ability to negotiate favorable pricing for its plans, which make up 50% of all US healthcare spending, has significant potential to lower the cost of drugs across the nation over the long term. President’s Bush and Obama were not able to get any government drug negotiating power in their tenure, but the Biden Administration, thanks to Nancy Pelosi, has managed to get a toehold in one of the most abused sectors of US healthcare price gouging. This article examines those provisions and ramifications for consumers.

 Brief

HR 3684, signed by President Biden November 15, 2021 invests billions to update the roadways, railways, and digital highways of the nations. This is all good news and overdue, given that 25% of the nation’s bridges are in gross disrepair and of those, 4% are in critical condition. (American Road and Transportation Builders Association, 2021)

 *Beneficiaries of HB 3684 include Medicare recipients, who will have their prescription drug expenses capped after a $2,000 copayment maximum. (AMIRI, 2021)

 *Medicare would be able to negotiate drug prices for certain medications effective January 2023, thanks to Senator Ron Wyden of Oregon. Most drugs will have a nine-year patent limit, but biologics, because they are more expensive to produce will have twelve years. (Cochrane, 2021) There is a schedule of 50 drugs for which the government would negotiate pricing for Medicare, Medicaid, and other government programs. (O'Brien, 2021) This would commence in 2025 and result in a substantial lowering of drug costs in the US, because private sector medical insurance plans follow the government’s lead. Assuming this provision remains in tact through implementation, its effects will not be felt until 2026, when the data can be analyzed. The nation may have a new president by then, but at least reducing pharmaceutical costs is a bipartisan effort now.

 *Insulin would be capped at $35 a dose, compared to several hundred dollars

 *Waste reduction provision; drug manufacturers would be required to refund or rebate the government for any unused portion of any single-use drugs, such as injectables. There are exceptions for radiological imaging agents, biologics, and new drugs with less than 18 months approval by the Centers for Medicare and Medicaid. (Beck, 2021)

 *Health and Human Services would be authorized to conduct periodic audits and recoup up to 25% of the value of the product refunds by fines for pharmaceutical companies which are noncompliant. These rebates are to be dispersed to HHS quarterly.

 *Provision which specifies US production quotas of personal medical equipment and supplies in order to reinforce the US supply chain.

Further information on these mandates will become clear when implemented. Bipartisan efforts to reduce the astronomical cost of pharmaceutical products in the US is a welcome activity for us all.

 And this is the healthpolicymaven signing off encouraging you not to sign blanket releases when agreeing to medical procedures, do specify that for which you consent and decline. This is an independent column which accepts no payments from any sector of United States healthcare. Opinions expressed here are her own and may be freely shared with anyone to whom it may interest.

 References

117th US Congress. (2021, November 15). Transportation and Infrastructure Bill. HR 3684. Washington DC, United States of America. Retrieved November 11, 2021, from https://www.congress.gov/bill/117th-congress/house-bill/3684

American Road and Transportation Builders Association. (2021, March 23). US Bridges Need Repair Latest Analysis of Federal Data . Retrieved November 14, 2021, from https://www.artba.org/2021/03/23/over-220000-u-s-bridges-need-repair-latest-analysis-of-federal-data-finds/

AMIRI, B. L. (2021, November 3). Democrats Put Paid Family Leave, Immigration, and Tax Changes Back In Biden Bill. The Los Angeles Times. Retrieved November 14, 2021, from https://www.latimes.com/politics/story/2021-11-03/democrats-paid-family-medical-leave-back-in-bill

Beck, S. (2021, August 4). Healthcare Provisions In the Infrastructure Investment and Jobs Act. Health Industry Watch.com. Retrieved November 15, 2021, from https://www.healthindustrywashingtonwatch.com/2021/08/articles/legislative-developments/health-care-provisions-in-the-infrastructure-investment-and-jobs-act/

Cochrane, J. W. (2021, November 2). The New York Times. Retrieved November 14, 2021, from https://www.nytimes.com/2021/11/02/us/politics/prescription-drug-prices-medicare.html

O'Brien, S. (2021, August 19). Congressional Democrats want to let Medicare negotiate prices with drugmakers. Here’s what that could mean for the cost of coverage. Retrieved November 15, 2021, from CNBC.com: https://www.cnbc.com/2021/08/19/congressional-democrats-want-to-let-medicare-negotiate-with-drugmakers.html

 

 

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