Congressional Democrats on Thursday introduced a bill to force drugmakers to negotiate prices within Medicare Part D or face losing their patent exclusivity.
Under the proposal, introduced by Rep. Lloyd Doggett (D-Texas) and Sen. Sherrod Brown (D-Ohio), the government could approve a generic competitor if a branded-drug manufacturer doesn’t agree to a reasonable Part D price for a given medication. This would give teeth to the HHS secretary’s new power to negotiate prices, but avoids the controversy of excluding certain drugs from coverage under Part D.
Analysts frequently point out that effective negotiation would require Medicare to be able to refuse to cover certain high-cost medications, as the Veterans Affairs Department can.
This proposal from Doggett and Brown has about 100 Democratic co-sponsors and is the first fleshed-out idea from Democrats this Congress for how broad negotiation within Medicare Part D could work mechanically. Generic-drug companies would have to pay royalties to the branded-drug manufacturer if their product is approved.
It also comes two days after President Donald Trump in his State of the Union address called for Congress to work on more aggressive pricing legislation, and as the GOP-led Senate Finance Committee undertakes its own effort. Senate Finance Committee Chair Chuck Grassley (R-Iowa) has criticized Medicare price negotiation proposals as government price-fixing.
Several lawmakers and the White House have varying ideas on how to cut healthcare spending, especially drug costs. House Democratic leadership is hammering out its own ideas for drug pricing, and Azar is trying to drum up legislative support to tie Medicare Part B drug prices to the lower costs in other countries.
Doggett’s bill includes a nod to the international reference-pricing model proposed by the Trump administration, albeit as a stopgap: as the generic drug undergoes U.S. Food and Drug Administration approval, Medicare could peg its costs to prices paid in other similar countries.
House Democratic leaders haven’t disclosed details yet of their upcoming proposal, but Doggett said Thursday they are discussing binding arbitration as one way to get to broader negotiation.
Henry Connelly, a spokesman for House Speaker Nancy Pelosi (D-Calif.) did not confirm this, but said Democrats are discussing a number of options.
“House Democrats are looking at a variety of aggressive drug-price negotiating mechanisms as we develop our flagship prescription drug price legislation,” Connelly said. “We’ll continue to press the Trump administration to remember the promises of candidate Trump, and work with Democrats to pass the tough drug-price negotiation legislation that is necessary to make any real headway in lowering prescription drug costs.”
Doggett chairs the House Ways and Means Committee’s health panel and has pushed for negotiation within Part D since its inception. At a news conference Thursday he said he hopes the multiple Democratic-led House committees that have already started pushing hard on drug prices will accelerate work on the issue, although prospects of getting a House vote on this particular proposal aren’t firm.
“There are no guarantees yet,” he said. “There are a number of different approaches that are out there.”
Doggett and Brown—flanked by several co-sponsors including Sen. Tammy Baldwin (D-Wis.)—unveiled the proposal in a news conference Thursday. The effort is co-led by other key Democrats: Reps. Elijah Cummings of Maryland and Peter Welch of Vermont and Sen. Amy Klobuchar of Minnesota.