U.S. Senate Democrats, led by Chuck Schumer (N.Y.), are setting the stage for a vote soon on policy changes to lower drug prices.

U.S. Senate Sets Stage for Action on Lowering Drug Prices

The U.S. Senate on Tuesday voted 69-30 to pass a bipartisan infrastructure bill that includes two drug pricing provisions, neither directly 340B-related. The bill now moves to the U.S. House, which is on a seven-week summer break. The $1 trillion bill includes $550 billion in new spending.

One of the infrastructure bill’s drug pricing provisions would require drug manufacturers to refund Medicare for the discarded portion of Part B drugs that are packaged for single use. The other would push back, to Jan. 1, 2026, the effective date of the Trump administration’s final regulation aimed at eliminating the rebates drug companies pay to PBMs in Medicare Part D and Medicaid managed care for more favorable placement on drug formularies.

Soon after the vote, Senate Democrats voted 50-49 to approve a $3.5 billion budget resolution intended to address a number of Democratic domestic priorities. It was the first step toward possible approval in the coming weeks of billions of dollars’ worth of spending on new education, climate, housing, jobs, immigration, and health care initiatives that Democrats back and Republicans oppose.

Some of the money to pay for the health care initiatives could come from federal savings by letting Medicare negotiate drug prices.

340B Provider Groups Concerned Over Spread Pricing Language

Groups that represent 340B covered entities are keeping a close eye on another possible source of savings that Democrats could use as a “pay for”—language that would require Medicaid managed care organizations (MCOs) and their pharmacy benefit managers (PBMs) to limit reimbursement for Medicaid covered outpatient drugs to ingredient cost plus a dispensing fee.

If approved, the prohibition on Medicaid managed care “spread pricing” would eliminate revenue for covered entities from billing Medicaid managed care organizations more than what they pay for drugs through 340B. Providers that care for high volumes of Medicaid enrollees would be hit especially hard. Nationally, about 70% of Medicaid enrollees are in managed care.

In a speech scheduled for 11:15 a.m. this morning, the White House said President Biden would call on Congress let Medicare negotiate drug prices and make drug companies that raise their prices faster than inflation pay a penalty.

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