HHS proposes legislation to lower prescription drug costs

HHS Secretary Xavier Becerra has announced a plan to lower prescription drug prices by “promoting negotiation, competition and innovation in the health care industry.”

One of the “key” policies is legislation that would allow HHS to negotiate Medicare Part B and Part D drug prices directly with pharmaceutical companies, then make those prices available to other purchasers, according to a press release from the agency.

Other proposed policies include:

• Medicare Part D reform, including a spending cap to protect beneficiaries from unaffordable out-of-pocket costs;
• legislation to slow price increases on drugs;
• legislation to accelerate the availability of biosimilar and generic drugs, such as by shortening the period of exclusivity and adopting Medicare Part B policies to increase the prescribing of biosimilars among clinicians;
• prohibiting “pay-for-delay” agreements and similar “anti-competitive” practices; and
• investing in basic and translational research to promote innovation.

HHS also proposed:

• testing models using value-based payments in Medicare Part B;
• testing models that provide additional cost-sharing support to participants in the Medicare Part D Low-Income Subsidy program for using biosimilars and generics;
• testing cost of care models in Medicare to determine whether they reduce total spending and improve patient outcomes;
• collecting data from insurers and pharmacy benefit managers to improve transparency regarding drug prices, rebates and out-of-pocket spending; and
• working with states and tribes to create drug importation programs that reduce costs without increasing safety risks.

According to HHS, prescription drugs cost Americans more than $1,500 per person, and the price of brand name drugs is increasing faster than inflation. A RAND Corporation report published earlier this year estimated that prescription drug prices are 2.56 times higher in the United States than in other nations. The price gap was even bigger for brand name drugs — 3.44 times higher.

“Too often, many low-income families cannot take their prescription medications because of cost concerns,” Becerra said in the release. “The Biden-Harris Administration remains committed to making health care more affordable for American families, and this plan outlines one key way we will do that.”

References:

HHS. Comprehensive plan for addressing high drug prices: A report in response to the executive order on competition in the American economy. https://aspe.hhs.gov/sites/default/files/2021-09/Competition%20EO%2045-Day%20Drug%20Pricing%20Report%209-8-2021.pdf. Accessed Sept. 10, 2021.

HHS. Comprehensive plan for addressing high drug prices: A report in response to the executive order on competition in the American economy. Executive Summary. https://aspe.hhs.gov/sites/default/files/2021-09/Drug%20Pricing%20HHS%20Exec%20Sumary%209-8-21.pdf. Accessed Sept. 10, 2021.

HHS. HHS Secretary Xavier Becerra releases bold proposal to lower prescription drug costs. https://www.hhs.gov/about/news/2021/09/09/hhs-secretary-xavier-becerra-releases-bold-proposal-lower-prescription-drug-costs.html. Accessed Sept. 10, 2021.