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: