POLICY BRIEFINGS

Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


THIS WEEK'S BRIEFING - OCTOBER 14, 2019

Congressional Budget Office Releases Partial Score of Speaker Pelosi’s Signature Drug Pricing Legislation


On Friday, the Congressional Budget Office (CBO) released a preliminary estimate of the effects of Title I of H.R. 3, the Lower Drug Costs Now Act of 2019, which is Speaker Pelosi’s signature drug pricing reform bill. Title I requires drug manufacturers to negotiate prices with the Secretary of Health and Human Services (HHS), subject to a cap of 120% of the average price in six other countries. CBO estimates that Title I would result in Medicare savings of $345 billion between 2023 and 2029. CBO further notes that foreign drug prices are expected to rise and that the steep cuts to manufacturer revenues would result in “lower spending on research and development and thus reduce the introduction of new drugs.” Reactions from lawmakers were swift. Energy and Commerce Committee Chairman Pallone (D-N.J.), Ways and Means Committee Chairman Neal (D-Mass.), and Education and Labor Chairman Scott (D-Va.) jointly stated that the CBO analysis confirms that “H.R. 3 lives up to its name of lowering prescription drug costs for the American people.” On the other side of the aisle, Energy & Commerce Committee Ranking Member Walden (R-Ore.) stated that Speaker Pelosi is “jamming through her drug pricing scheme, moving forward with less than a full picture to tip the scale, and trick the public.” Meanwhile, Ways and Means Committee Ranking Member Brady (R-Texas) stated that, “CBO’s report confirms House Democrats’ ‘dictate or destroy’ price controls only serve to hurt the development of future cures and damage American innovation.” Democrats remain committed to advancing the legislation, with the Ways and Means Committee scheduled for a hearing on the topic this Thursday. Additionally, House Majority Leader Hoyer (D-Md.) wrote in a letter to colleagues that it is “possible” the House will vote on the measure during the week of October 28.


Pending Drug Importation Guidance


Last Monday, a draft guidance related to prescription drug importation landed at the Office of Management and Budget (OMB) for review. The guidance follows the Administration’s “Safe Importation Plan” to create two pathways to import drugs from abroad. Under Pathway 1, a Notice of Proposed Rulemaking would be released to authorize demonstration projects allowing importation of drugs from Canada. Under Pathway 2, manufacturers could import versions of FDA-approved drugs that they sell in foreign countries that are the same as the U.S. versions of those products. While the exact content of the draft guidance is unknown until OMB concludes its review, it is likely that the guidance focuses on Pathway 2, since it is a “Draft Guidance for Industry,” not a proposed regulation or a notice thereof, as contemplated by Pathway 1. Interestingly, the title of the guidance explicitly states that biologics are included in its scope, which has been a sticking point for some stakeholders in the past. The safe importation of large-scale, complex molecules requiring specific storage and handling conditions presents much greater logistical challenges than that of small molecules. It remains to be seen whether the guidance carves out the most complex products. The exact timing of the completion of OMB review is unknown. However, importation remains a priority for this Administration, with the President previously announcing that importation was coming “soon” during remarks in Florida on October 3rd.



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