House passes drug pricing bill that pharma warned would bring 'nuclear winter'

Jonathan Gardner Published Dec. 12, 2019

Dive Brief:

• The House of Representatives on Thursday voted 230-192 to send to the Senate legislation requiring pharma companies directly negotiate the price of 50 drugs with the federal government.
• The bill is unlikely to get a vote in the Senate, where an alternative voted out of the Finance Committee mainly proposes mandated rebates to Medicare for drugs that have price increases at greater than the rate of inflation. President Donald Trump has backed that plan, but there are no signs it will be debated soon.
• The industry trade group PhRMA has fiercely opposed the legislation, claiming it would trigger "nuclear winter" for biotech innovation. A statement from the lobby called on the Senate to "stop H.R. 3 in its tracks." 

Dive Insight:

Even if, as appears likely, the bill backed by House Speaker Nancy Pelosi, D-Calif., will never be signed into law, today's vote was still significant. Years of lobbying and public pressure have forced lawmakers to act and has knocked the pharmaceutical industry on its heels.

If anything, the bill in its final form became more hostile to the sector. The original bill would have only tagged 25 drugs for negotiation with the Department of Health and Human Services, but in its final, approved form, the number of drugs subject to negotiation would rise over time to 50.

This boosted the amount of savings from drug spending the federal government would see from $345 billion to $456 billion through 2029, Congressional Budget Office forecasters said. The flip side of that reduction in revenue would be a decline in pharma company R&D activity, which in turn would reduce the number of new drugs to reach the market by eight in the decade ending 2029 and 30 in the following decade, CBO said.

Senate Majority Leader Mitch McConnell, R-Ky., has already said the bill will not be considered in the Senate. In September, the Finance Committee passed its own version of drug pricing legislation, which mandated rebates to Medicare for drug price increases above the inflation rate. It did not include any provisions for price negotiation by the Department of Health and Human Services.

Committee Chairman Chuck Grassley, R-Iowa, last week announced some changes to his bill that reduced Medicare beneficiary drug cost sharing and adjusted manufacturer discounts for pharmacy-dispensed drugs.

However, it is not clear whether that legislation will get a vote by the full Senate, either. Some Republicans have opposed it — only six of the 15 Republican on the committee voted for it — and McConnell hasn't indicated a timeline for a floor vote. 

Assuming the Senate passes a bill, the Republican-opposed provisions from the House bill could still be in play.

A joint committee would need to resolve differences between the two bills, a process that involves extensive horse-trading in order to come up with a document agreeable to majorities in both chambers, which means the House Democrats might have a chance to get HHS price negotiation into a bill intended to be sent to the White House.

https://www.biopharmadive.com/news/house-approves-hr3-drug-pricing-bill-pharma/568966/