April 23, 2021
House Democrats and Republicans reintroduce competing drug pricing proposals, H.R. 3 and H.R. 19
This week, House Democrat and Republican leaders from committees of jurisdiction on drug pricing released proposals to address the cost of prescription drugs, closely reflecting proposals from last Congress. On April 22, Energy and Commerce Committee Chairman Frank Pallone Jr. (D-NJ), Ways and Means Committee Chairman Richard E. Neal (D-MA), and Education and Labor Committee Chairman Bobby Scott (D-VA) reintroduced H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, which passed out of the House of Representatives in 2019. The legislation would empower the Secretary of Health and Human Services (HHS) to negotiate the cost of certain high-priced single source drugs; impose inflationary rebates on Medicare Part B and D drugs; and redesign the Medicare part D benefit, including capping out-of-pocket costs at $2,000 per year. In 2019, the Congressional Budget Office (CBO) estimated that the price negotiation provisions in the bill would save the federal government about $456 billion over 10 years. Unlike the 2019 version, the bill excludes the addition of Medicare benefits for vision, dental, and hearing.
On April 22, Energy and Commerce Committee Ranking Member Cathy McMorris Rodgers (R-WA), Ways and Means Committee Ranking Member Kevin Brady (R-TX), and Education and Labor and Committee Ranking Member Virginia Foxx (R-NC) released their Lower Costs, More Cures Act (H.R. 19). The legislation remains largely unchanged from the 2019 version and includes dozens of bipartisan drug pricing measures. Among these, the bill would also revamp the Medicare Part D benefit, including capping out-of-pocket costs at $3,100 per year, in addition to capping monthly insulin costs at $50 post-deductible. The bill also includes several transparency measures that apply to Medicare Parts D and B, along with measures directed at Medicaid, would ban "pay-for-delay" settlements between brand and generic manufacturers, and more.
The House Energy & Commerce Committee plans to hold a hearing on May 4 on drug pricing following the reintroduction of H.R. 3. House Democratic leaders are pushing to keep drug pricing and broader health care provisions in President Biden's planned "human infrastructure" proposal expected next week, however there is uncertainty over the White House's plans to include them at this time. While President Biden campaigned on a robust drug pricing agenda, including support for Medicare price negotiation, these and other health care proposals may be featured in a separate package down the road.
For more information, see below links and bill detail below as well as the full Tax Alert attached below:
H.R 3 and H.R. 19