House’s $7.8B COVID-19 spending bill includes price assurances

A COVID-19 spending bill passed by the U.S. House of Representatives Wednesday would require that companies provide a “fair and reasonable” price for countermeasures sold to the government. The biopharma industry has strongly opposed attaching pricing provisions to government-funded R&D.

The supplemental spending bill seeks to appropriate $7.8 billion, a substantial increase from the $1.8 billion the Trump administration requested.

To fund R&D for vaccines, therapeutics and diagnostics, NIH’s National Institute of Allergy and Infectious Diseases would receive $836 million.

The largest allocation -- up to $3.4 billion -- would go to HHS’s Public Health and Social Services Emergency Fund “to prevent, prepare for, and respond to coronavirus, domestically or internationally, including the development of necessary countermeasures and vaccines, prioritizing platform-based technologies with U.S.-based manufacturing capabilities, and the purchase of vaccines, therapeutics, diagnostics, necessary medical supplies, medical surge capacity, and related administrative activities.”

The bill would require that any product be purchased in accordance with Federal Acquisition Regulation guidance on fair and reasonable pricing. The spending bill also would authorize the HHS secretary to ensure that products within those three categories developed with these funds “be affordable in the commercial market,” as long as pricing actions do not delay development.

Biopharmaceutical companies are committed to ensuring affordability and access of COVID-19 countermeasures, but they oppose reasonable pricing clauses in federal contracts, Stephen Ubl, president and CEO of PhRMA, told reporters Wednesday. The industry’s concern, he said, is that R&D collaboration with the government, even in a limited manner, could result “in a loss of IP or the government setting a price [and that] is going to have a chilling effect on both investment and collaboration at a time when we need both.”

Brian Newell, a spokesperson for BIO, said that reasonable pricing provisions are “a veiled attempt to impose price controls on American innovation.”

The reasonable pricing provisions were demanded by congressional Democrats. While HHS Secretary Alex Azar had initially rejected the notion of price controls, he changed tack in late February to support pricing affordability (see “Pricing Speed Bump for COVID-19”).

Other agencies that would receive funding if the bill is passed include the CDC, which would get $2.2 billion, of which $4 million would be given to each state to fund local preparedness. CDC’s funds would also go towards global health security and the Infectious Diseases Rapid Response Fund.

FDA would receive $61 million for pre- and post-market work on countermeasures, therapies and vaccines; to monitor and mitigate any medical product shortage; and to strengthen the U.S. medical product manufacturing sector.

The Department of State and USAID would receive $1.3 billion.

The bill now heads to the Senate.

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