Pelosi’s Sweeping Drug Pricing Bill Sent to Full House

WASHINGTON -- The House Energy & Commerce Committee approved a controversial drug price bill championed by House Speaker Nancy Pelosi (D-Calif.) at a marathon markup session on Thursday, sending the measure to the full House for a vote.

The "Lower Drug Costs Now Act of 2019" passed by a vote of 30-22. The committee also sent four other bills to the House on voice votes; those bills would reinvest the projected savings from the Pelosi bill to expand Medicare coverage for vision, dental, and hearing care and to add program improvements for low-income Medicare beneficiaries.

Lengthy Debate

A lengthy partisan debate during the markup committee meeting focused almost exclusively on issues related to the "Lower Drug Costs Now Act of 2019," primarily centered on whether it would limit innovation and availability of new therapies, especially those for rare diseases, mental illnesses and addiction, and Alzheimer's disease, and for expensive personalized and gene therapies.

Ranking Member Greg Walden (R-Ore.) complained bitterly about the rush to get the bills out of committee. He charged that Pelosi's office had seized control of the process and served up her bill as a "pre-baked bill" with "subcommittee and full committee promises broken." Of the additional four bills, he said, three were entered in the last week with "no hearings, no subcommittee markups, and no commitment to regular order."

"Nobody is arguing that drugs are coming out at prices that are unsustainable ... [but] there is a right way to do this and [Republicans] were shut out of the process," Rep. Walden charged. The Pelosi bill would stifle innovation and new drug applications, he said, and these bills are destined to fail without bipartisan support.

The bill would establish a fair price negotiation program and empower the Secretary of Health and Human Services (HHS) to negotiate directly with drug manufacturers for the prices of certain drugs that lack competition. It sets the negotiated price at an upper limit of 120% of the volume-weighted average price of six countries (Australia, Canada, France, Germany, Japan, and the U.K.). The bill would also establish a mandatory rebate for drug manufacturers of all drugs covered under Medicare Part B and Part D that increase their prices faster than inflation, and would cap out-of-pocket costs at $2,000 for Medicare beneficiaries enrolled in the Part D drug coverage program.

Rep. Anna Eshoo (D-Calif.) pointed out that the U.S. is the only developed nation that doesn't negotiate drug prices. As a result, the U.S. pays three to four times more than other countries for the same drugs. According to the Congressional Budget Office, she said, drug price negotiation could reduce costs by 40% to 55% on average.

Negotiation Provisions Panned, Praised

During the 10-hour markup session, Republican members of the committee argued that the bill would stifle innovation and result in fewer drugs reaching the market. Rep. Bill Flores (R-Texas) called the bill "partisan politics at its worst" and said it really gave drug companies no negotiation power. "They can accept the price, be subject to an excise tax, or move overseas. At best, this is price-setting. Regardless of what you want to call it, companies will stop innovation ... What life-saving cures will be lost?"

Rep. Ben Ray Luján (D-N.M.) countered that "we don't call it price control when the VA [Department of Veterans Affairs] negotiates for the cost of drugs. Medicare is currently banned under the law to negotiate prices on behalf of its beneficiaries."

Several Democratic committee members noted that President Trump has said he supports negotiation on drug prices. Rep. Darren Soto (D-Fla.) said projections are that 8 to 15 drugs (out of a total 300) might not be approved over 10 years as a result of this legislation. Contrast that with a projected $345 billion savings that can go toward covering vision, hearing, dental, and other significant Medicare coverages.

This is "a revolution in savings for Medicare beneficiaries. This is the right thing to do," he said.

Rep. H. Morgan Griffith (R-Va.) questioned the legality of requiring a corporate entity to accept a price or risk losing as much as 95% of gross revenue. This approach would be punitive and has no adequate opportunity for judicial review, he said. But Rep. G. K. Butterfield (D-N.C.) disagreed, saying there is no reason to think there are any constitutional problems with the bill and that there is no question that Congress has the authority to regulate drug prices since this involves interstate commerce.

"The idea that we're going to put drug companies out of business is ridiculous," Butterfield said.

Other Measures Also Approved

A bipartisan amendment to the bill from representatives Kurt Schrader (D-Ore.) and Greg Gianforte (R-Mont.) to develop market-based solutions to increase generic competition and utilization of biosimilars was approved.

Some of the Medicare bills sent on to the full House included:

H.R. 4665, which would provide coverage for routine eye examinations and fitting services for eyeglasses and contact lenses. It also would provide coverage for either one pair of eyeglasses during a 2-year period, or a 2-year supply of contact lenses.

H.R. 4618, which would cover hearing aids for individuals with severe or profound hearing loss. It would also cover aural rehabilitation and treatment services provided by qualified audiologists.

H.R. 4650, which would cover dentures, dental preventive and screening services, and basic procedures like tooth extractions as well as major procedures such as root canals.

Amendments voted down during the markup process included a proposal that 100% of rebates on insulin costs be passed down to the consumer at the pharmacy counter, a proposal to exempt any drug for Alzheimer's from government price-setting, a proposal to substitute previously approved bipartisan legislation (the CREATES Act, the No Pay for Delay Act, and the BLOCKING Act) for the Pelosi bill, a proposal to exempt drugs with rare disease indications, a proposal to exempt therapies for addiction and serious mental illness, a proposal to strike all price references from the Pelosi bill, a proposal to exempt therapies for sickle cell disease, and a proposal to strike inflationary caps and tie drug price increases to inflation.