On The Hill

The Senate passed its budget deal this week and will now head back to their districts until after Labor Day for recess. The administration introduced a new importation plan that offers a pathway through which states could import drugs from Canada and an industry-led pathway that could open importation from other foreign countries.

Budget Deal Clears the Senate

The Senate cleared a two-year, $2.7 trillion budget agreement this week that would fend off billions of dollars in looming sequestration cuts and prevent the nation from defaulting on its debt for the next two years. In a 67-28 vote, the chamber passed the measure, H.R. 3877, after Senate leaders and President Trump reached out to wavering Republican lawmakers in a last-minute drive to whip a better showing of Republican support than the party gathered for House passage last week. The budget and debt ceiling deal reached by the Senate extends sequestration on Medicare to help pay for higher budget caps on FDA and other non-defense agencies. ^[1] 

More Drug-Pricing Legislation Introduced in the Senate

Senators Rick Scott (R-FL) and Chris Van Hollen (D-MD) introduced a bill on Wednesday (July 31) that would allow an independent committee to set “reasonable” prices for drugs developed using taxpayer funds and would require drug makers to charge the committee-determined price after a drug’s first year on the market. Scott and Van Hollen’s “We Protect American Investment in Drugs (PAID) Act of 2019” would direct the National Academy of Medicine to pursue framework to initiate a reasonable price for a drug developed using grant funds from the National Institutes of Health or the Centers for Disease Control and Prevention. Factors in determining the target price would include federal funding used to develop the drug, the drug’s affordability, and international prices. An independent committee would then use the framework to determine a reasonable price for a drug. Drug makers would have to agree in licensing agreements to abide by the committee’s price starting one year after market entry and to limit price increases to the rate of medical inflation. Scott also authored a drug-pricing bill earlier this session that would implement a more aggressive version of the Trump administration’s international reference pricing plan. Scott’s reference pricing bill would require drug makers to price all FDA-approved drugs in the US based on the drug’s lowest list price in Canada, France, the United Kingdom, Japan, or Germany. The reference pricing would sunset after five years. ^[2] 

Trump Administration’s New Drug Import Plan

The Administration’s new importation plan offers a pathway through which states, wholesalers, and pharmacists could import drugs from Canada and an industry-led pathway that could open importation from other foreign countries. It represents a major shift in policy at Health and Human Services (HHS), which historically has not supported drug importation due to alleged safety risks. The move comes as HHS already faces pressure from several states to allow importation. The Trump administration suggests that the state programs potentially could become less important if the drug industry saves patients costs under the second pathway, which would allow drug makers to import versions of their FDA-approved drugs that are sold abroad, under a different National Drug Code (NDC). ^[3] 

References

^[1] Scholtes, Jennifer. “Senate passes budget, debt ceiling agreement for Trump’s signature.” Politico Pro. 1 August 2019. https://subscriber.politicopro.com/article/2019/08/senate-passes-budget-debt-ceiling-agreement-for-trumps-signature-3673200

^[2] Cohrs, Rachel. “Rick Scott Unveils Bill to Limit Prices on Taxpayer-Funded Drugs.” Inside Health Policy. 1 August 2019. https://insidehealthpolicy.com/inside-drug-pricing-daily-news/rick-scott-unveils-bill-limit-prices-taxpayer-funded-drugs

^[3] Wang, Beth. “Trump Administration’s New Plan For Drug Imports Raises Eyebrows.” Inside Health Policy. 31 July 2019. https://insidehealthpolicy.com/daily-news/trump-administration%E2%80%99s-new-plan-drug-imports-raises-eyebrows