Tax News Update    Email this document    Print this document  

June 23, 2021

Finance Chairman Wyden releases principles for drug pricing reform; Reps. DeGette and Upton unveil cures 2.0 discussion draft

Wyden principles include Medicare negotiation and inflationary rebates; Cures 2.0 bill authorizes Biden’s Advanced Research Projects Agency for Health (ARPA-H)

On June 22, Senate Finance Committee Chairman Ron Wyden (D-OR) released a document outlining his priorities for lowering prescription drug prices. He said the document “reflects the core principles that will guide my work this summer: let Medicare negotiate, limit price gouging, provide relief to consumers at the pharmacy counter, ensure those with individual and employer insurance also benefit, and reward scientific research for those who are truly innovating.” The release includes several components of bipartisan legislation Wyden co-sponsored last year with then-Finance Chairman Chuck Grassley (R-IA), including restructuring of the Medicare Part D benefit, limiting high out-of-pocket spending for Medicare beneficiaries, and a controversial proposal to require rebates for drugs whose prices increase faster than the rate of inflation. The inclusion of inflationary rebates, which is widely opposed by Republicans, was a key barrier to garnering more bipartisan support for the Grassley-Wyden bill last Congress.

Wyden’s drug pricing principles also include allowing Medicare to negotiate the price of prescription drugs, which is the main component of H.R. 3, the drug pricing bill being pushed by Speaker Nancy Pelosi (D-CA) and other democratic House leaders. H.R. 3 has no Republican support and a group of moderate Democrats led by Reps. Scott Peters (D-CA) and Jake Auchincloss (D-MA) recently called on Pelosi to take up an alternative, bipartisan approach to drug pricing that would “preserve our invaluable innovation ecosystem.” Notably absent from the Wyden paper’s discussion of Medicare negotiation is H.R. 3’s use of international reference pricing to drive negotiation and set a cap on the maximum negotiated prices, which opponents say would not only stifle innovation but import other country’s pricing models that rely on the controversial use of quality-adjusted life years (QALYs). The Wyden principles also include extending drug pricing reforms “beyond Medicare to all Americans, including those covered by employer and commercial health plans” and a focus on rewarding scientific innovation “not gaming of the patent system.”

Also, on June 22, bipartisan Representatives Diana DeGette (D-CO) and Fred Upton (R-MI) released a discussion draft of their anticipated Cures 2.0 legislation, which among other items would authorize President Biden’s proposed Advanced Research Projects Agency for Health (ARPA-H). In a joint press release, DeGette and Upton said, “The federal government has amazing resources at its disposal and now is the time to put the full weight of those resources to use to cure some of the world’s most devastating diseases, such as cancer, diabetes, Alzheimer’s and more. Developing and delivering new lifesaving cures is a mission that must unite all of us.” The legislation coincides with a detailed concept paper the White House published Tuesday in Science Magazine outlining their vision for the new research agency.

That bill seeks to build upon the 2015 passage of DeGette and Upton’s 21st Century Cures Act, which the press release calls “a landmark piece of legislation that has revolutionized how the U.S. researches and develops new cures and treatments for some of the world’s most difficult diseases.” “While the 21st Century Cures Act sought to improve how new drugs and treatments are researched and developed in the U.S., Cures 2.0 seeks to improve how those new treatments and therapies are delivered to patients,” it continues. In addition to building on 21st Century Cures, Cures 2.0 includes pandemic-focused provisions while also authorizing $25 billion to “spark the economy” by funding independent research institutions, public laboratories, and universities. Other key provisions include:

  • Requiring the secretary of Health and Human Services (HHS) to conduct a nationwide study to further understand the implications of long COVID;
  • Calling on the HHS secretary to develop a nationwide testing and vaccine distribution strategy to be used in future pandemics;
  • Other public health initiatives including pandemic preparedness for rare disease patients and investments to address antimicrobial resistance and access to critically needed antimicrobial drugs;
  • Providing training and educational programs for caregivers to help improve the quality of care patients are provided at home, and initiatives aimed at increasing health literacy;
  • Increasing diversity and coverage in clinical trials, grants for novel trial designs, and collection and consideration of patient experience data by the Food and Drug Administration (FDA);
  • Instructing reports on regulating digital health technologies, the state of cell and gene therapy, and coverage and reimbursement for innovative health technologies;
  • Requiring the FDA to expand the collection and use of Real-World Evidence to aid in the development of new, patient-focused treatment approaches;
  • Enabling accelerated approval for investigational drugs and therapies by remedying impediments during the application and post-study approval processes;
  • Increasing access to telehealth services for patients covered under Medicare, Medicaid or the Children’s Health Insurance Program (CHIP), including providing guidance to state Medicaid programs and removing Medicare’s geographic and originating site restrictions;
  • Codifying the current Medicare Coverage of Innovative Technology pathway at CMS; and,
  • Testing approaches to delivering personalized medicine consultations through a pilot program at the CMS Innovation Center.

For more information, see press release, discussion draft, section-by-section, White House ARPA-H concept paper.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Heather Meade (
   • Laura Dillon (