By Surabhi Dangi-Garimella, PhD
Opinions vary on the impact H.R.3 would have on patients and the U.S. health care system as a whole, depending on who you ask. Some of the changes proposed by H.R.3 are directed to redesign the Medicare Part D prescription drug reimbursement structure.
The Elijah E. Cummings Lower Drug Costs Now Act (H.R.3), which passed the House in December 2019 under the Trump administration, and is waiting for Senate approval, touches health care at various levels: prescription drug prices, health care coverage and costs, and public health.
- A major change is that the bill requires the Department of Health and Human Services to negotiate maximum prices for:
- Insulin products
- Single-source brand-name drugs that lack generic competition, existing or newly approved
- A list of 125 drugs that lead to the highest spending at the national level or within the Medicare prescription drug benefit or Medicare Advantage programs
The negotiation price is capped at 120% of the average Australia, Canada, France, Germany, Japan, and the United Kingdom. If that information is not accessible, it’d be capped at 85% of the U.S. average manufacturer price.
- CMS should receive a rebate from manufacturers for Medicare Part B and D covered drugs that cost $100 or more and if their average manufacturer price increases faster than inflation.
- Out-of-pocket (OOP) spending is capped at $2,000 under the Medicare prescription drug benefit. Some enrollees will have flexibility to make their coinsurance payments as installments
- The bill imposes rules around increasing transparency around drug price
- Medicare is directed to provide dental, vision, and hearing coverage
The Republican response to H.R.3 is H.R.19, the Lower Costs, More Cures Act of 2019. This bill makes some similar proposals as H.R.3 but has some differences as well:
- It caps Part D OOP spending for enrollees, but at $3,100 rather than $2,000
- Reduces enrollee cost sharing under the Medicare prescription drug benefit program
- Makes recommendations for increasing drug price transparency
What Does This Mean for Stakeholders?
- According to an estimate by the Congressional Budget Office (CBO), H.R.3 would reduce federal deficits by about $5 billion between 2020-2029, primarily because Medicare’s ability to negotiate on drug pricing would lower spending by about $456 billion.
- If implemented, the bill (then Act) would lower OOP costs for patients because coinsurance is based on the drug’s list price, which federal and state health plans will now be able to negotiate with the manufacturers
- Price controls could lower investment in R&D programs and impact future drug development
- PhRMA, the trade association for drug manufacturers, predicts there will be 56 fewer medicines coming to market over 10 years
- CBO’s estimates are a little more modest—CBO predicts 8-15 fewer drugs over the same time period
- H.R.3 or H.R.19 might disproportionately impact access to new therapies for patients with rare or orphan disease and even cancer who usually have limited treatment options. A report from the Rare Access Action Project (RAAP) projected that manufacturer obligations would rise from 1,000 to 2,000%. RAAP’s Executive Director Michael Eging believes that such a dramatic rise in costs might lead to a reduction in patient services and clinical trials and could lead to a drop in the availability of rare disease drugs.
Patients Rising Executive Director Terry Wilcox believes the price controls within H.R.3 “will crush patients’ hopes for treatments that can make their lives better,” and that this financial approach would be at the expense of patients.
Surabhi Dangi-Garimella, Ph.D. is a biologist with academic research experience, who brought her skills and knowledge to the health care communications world. She provides writing and strategic support to non-profit groups via her consultancy, SDG AdvoHealth, LLC.
