Drug-pricing bill passes first test; path forward is unclear

LEGISLATION AIMED at addressing drug prices cleared a major hurdle last week, but a dispute among Republican lawmakers forecasts a tough road ahead.

The Senate Finance Committee approved the bipartisan bill July 25, but not before some GOP committee members tried to gut it of a core policy—curbing what Medicare pays for price increases on existing drugs. The provision is considered the cornerstone of the legislation negotiated over six months by committee Chair Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.). It also accounts for a large portion of the more than $100 billion in savings projected by the Congressional Budget Office for the government and Medicare beneficiaries.

Throughout the markup, Sens. Mike Crapo (R-Idaho), John Thune (R-S.D.) and others blasted the policy as a “price control” or hurting the “free-market” aspects of Medicare Part D.

These statements echoed points laid out by the Pharmaceutical Research and Manufacturers Association, the leading trade association for pharmaceutical companies.

Supporters of the committee package said that without this policy, the legislation loses its force. “If you take out the inflation rebates, you basically gutted the bill,” argued Shawn Gremminger of the Washington-based liberal advocacy group Families USA.

The committee approved an amendment striking the penalty the government would impose on any drugmaker that hikes its prices above the rate of inflation.

In one surprise twist early on in the hearing, Grassley said he wanted to revive the proposal dropped earlier this month by the Trump administration to force pharmacy benefit managers to pass all Part D drug rebates directly to patients when they purchase drugs.

The GOP’s internal fight over the finance legislation underscores a deep divide between the Trump administration and many Senate Republicans over how far the party should be willing to stray from pharmaceutical company interests in the quest to lower prices.

Next steps are unclear for the legislation, as Grassley and the White House will doubtless face ongoing pressure from GOP senators to change the inflation caps policy.

In a statement, PhRMA CEO Steve Ubl “reiterated our opposition to the current Senate Finance Committee legislation because it fails to achieve this shared goal and imposes harmful price controls in Medicare Part D.” ●