Drug Pricing Draws Increased Attention in Election Season

As the 2020 presidential election draws closer, the conversation of health care spending has continued to intensify, particularly when it comes to the price of prescription drugs. A recent poll found that the #1 and #2 domestic concerns for Democrats and Republicans were to lower the cost of health care and reduce the price of prescription drugs, respectively.

            There are several competing proposals in Congress to lower the cost of prescription drugs, as both Democrats and Republicans attempt to craft competing strategies. Last summer, Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR), the Chairman and Ranking Member of the Senate Finance Committee, introduced S. 2543, the Prescription Drug Pricing Reduction Act (PDPRA). This bill would impose a yearly cap on how much manufacturers raise their list prices and establish a 100 percent rebate on any increases that rise above that level. In December, House Democrats passed H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, that would permit the Department of Health and Human Services (HHS) to negotiate the price of certain prescription drugs offered under the Medicare Part D program. The bill also integrates provisions in S. 2543 on inflation caps but adds an additional provision that retroactively penalizes price increases above the rate of inflation going back to 2016. In December, House Republicans introduced competing legislation to House Democrat proposals, H.R. 19, the Lower Costs, More Cures Act. This bill stripped out proposals related to drug negotiation and inflation caps and integrated several provisions from previously introduced previous draft drug pricing legislation, such as increasing generic drug entry to market and modernizing the benefit structure under Part D to lower annual out-of-pocket costs for eligible seniors. Five Senate Republicans, including the current chairman of the Senate Budget Committee and likely future chairs of the Senate Finance Committee and Senate Committee on Health, Education, Labor & Pensions (HELP), introduced companion legislation to H.R. 19 for consideration in the Senate.

            It is unlikely that any of the proposed drug pricing proposals will become law in 2020, as Senate Majority Leader McConnell has declared H.R. 3 “dead on arrival.” The Trump Administration has expressed a preference for S. 2543, but the bill has run into difficulties among Senate Republicans, who have raised concerns about the proposed inflation caps on price increases. Signaling some concern about the influence of prescription drug pricing on the 2020 presidential election, Senator Martha McSally (R-AZ), who is in a contentious reelection bid, recently introduced the Lowering Prescription Drug Prices for America’s Seniors and Families Act. If passed, the legislation would permit HHS to negotiate the price of prescription drugs covered under Part D, but only after those drugs lose their patent exclusivity and do not have any market competition. Congress has had some recent bipartisan success in drug pricing legislation, including the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act in the FY20 spending bill. The CREATES Act requires brand-name manufacturers to provide samples to generic drug manufacturers, which could increase competition among products. The last vehicle for any drug pricing proposals to be signed into law would be as part of a health care extender package, whose funding is set to expire on May 22nd. There are some bipartisan proposals that may be included in this package, particularly a redesign of the Part D benefit structure, which all competing drug pricing bills reform to some degree.

            President Trump has been under significant pressure to counter Democrat claims that his administration has failed to make meaningful steps to lower the price of prescription drugs. Many of his regulatory proposals have faced challenges in the courts or the administration has chosen not to finalize those initiatives. Proposals by presidential candidates Senator Bernie Sanders (I-VT) and former Vice President Joe Biden support greater government intervention in prescription drug pricing, with both candidates supporting direct negotiations with manufacturers on pricing. Given the Supreme Court’s decision to hear a new challenge to the validity of the Affordable Care Act (ACA), health care will likely continue to be a pressing issue to voters in upcoming elections.