There is a rift between President Biden and House Democrats over whether to include provisions to lower drug prices in his American Families plan, or deal with drug pricing later in another bill. | Official White House Photo by Adam Schultz

Will Biden’s American Families Plan Include an Rx Drug Pricing Measure?

President Biden might exclude legislation to reduce what consumers and the federal government pay for prescription drugs from his American Families human and capital investment initiative, news organizations report this morning. Biden is scheduled to describe his infrastructure investment plan during a joint session of Congress tomorrow night.

There is a rift between Biden and House Democrats over whether to include provisions to lower drug prices in the plan, or deal with drug pricing later in another bill. The administration reportedly is concerned that adding drug pricing language that many Republicans oppose could doom his plan in the Senate. House Democrats want the drug pricing provisions included, as a matter of principle and to generate savings to expand Affordable Care Act subsidies for the purchase of health insurance. Democratic lawmakers have said drug pricing reform is a priority, based on their belief it could be a significant issue in the 2022 mid-term elections.

Whatever the outcome, no language with direct major consequences for the 340B program is expected in Biden’s plan.

House Democrats last week introduced a slimmed-down version of H.R. 3, their drug pricing bill from the last session of Congress. “Lowering health costs and prescription drug prices will be a top priority for House Democrats to be included in the American Families Plan,” Speaker Nancy Pelosi (D-Calif.) said in a statement after H.R. 3 was reintroduced.

“Democrats pledged to lower health costs by expanding the Affordable Care Act’s subsidies to cover more families more generously and by reducing the price of prescription drugs—both of which are an overwhelmingly bipartisan priority among the American people,” Pelosi said. “Seniors and families across America are counting on us to finally deliver the drug price negotiations they need to afford their medications. Families cannot afford to lose the enhanced ACA benefit passed in the American Rescue Plan, and we must make it permanent.”

The House Energy and Commerce (E&C) Health Subcommittee is holding a hearing on H.R. 3 next week Tuesday, May 4. “It’s time to finally rein in the soaring cost of prescription drugs by empowering the federal government to negotiate a better deal for the American people,” full committee chair Frank Pallone (D-N.J.) and subcommittee chair Anna Eshoo (D-Calif.) said in a statement announcing the hearing. “Making health care and prescription drugs more affordable is one of this committee’s top priorities.”  The E&C Committee has jurisdiction over the 340B program but the program is unlikely to be addressed during the hearing.

National Economic Council Director Brian Deese was asked during a White House press briefing yesterday, “Why isn’t the White House including a plan to reduce the price of prescription drugs in the plan?”

“The good news about a question like that is I get to tell you that, since we haven’t rolled out the Families Plan yet and I’m not going to do it at the podium right now, I am not going to confirm whether or not that is—is in,” Deese answered. “I can, you know, say that the President has long focused on the issue of rising cost of prescription drugs for American consumers and American families. It’s something that he continues to focus on and prioritize, but I’m going to let him speak to those issues in the speech.”

The new H.R. 3 would require the U.S. health secretary to negotiate the prices Medicare Parts B and D pay for certain high-priced, single-sourced drugs, not to exceed 120% of the average price paid by six other developed nations. The negotiated prices would be made available to commercial health plans.

Before the E&C Committee marked up the original version of H.R. 3 in October 2019, the bill would have made Part B and D drugs whose prices were reduced through negotiation exempt from 340B discounts. This could have had a dramatic effect on revenue for 340B covered entities. That issue was addressed by lawmakers after lobbying from entities.

The new H.R. 3 also would expand to Medicare Parts B and D the rebate that Medicaid obtains for single-source drugs with price increases that outpace inflation. Manufacturers would not have to provide rebates on Part B drugs upon which they also paid 340B discounts.

“This kind of inflationary rebate is very successful in helping Medicaid negotiate its drug prices or get lower prices,” said Rachel Sachs, a professor at the Washington University School of Law in St. Louis, during a recent appearance on the Health Affairs podcast.

Staff writer Rob Shinkman contributed to this article.

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