White House pushing Grassley-Wyden drug pricing bill, including inflation caps

Enacting drug pricing legislation by the end of December based on the Prescription Drug Pricing Reduction Act (PDPRA) is a top Trump administration priority, Joe Grogan, director of the White House Domestic Policy Council, said Friday at a press briefing. He also signaled that HHS will approve state drug importation plans, and expressed administration support for providing economic incentives to increase adoption of biosimilars.

While White House support is necessary for the enactment of drug pricing legislation, it is not certain that it will be sufficient. PDPRA is facing resistance from Democrats, who favor more dramatic action, and from PhRMA and BIO, which are lobbying against proposals that would attenuate the ability of drug companies to increase prices.

PDPRA was drafted by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), chairman and ranking member, respectively, of the Senate Finance Committee.

“We are very supportive of the Grassley-Wyden compromise,” Grogan said. “It’s a product of a really good bipartisan collaborative approach to solving drug pricing.”

Grogan said the White House is working “each and every day” with Republicans and Democrats to strengthen the bill and line up bipartisan support.

He said that he has been discussing drug pricing legislation for months with staff working for House Speaker Nancy Pelosi (D-Calif.) but has concluded that the bill she and House Democratic leadership are pushing, the Lower Drug Costs Now Act (H.R. 3), is a non-starter. “Nancy Pelosi’s bill right now is unworkable, it’s impractical, and it’s hyperpartisan and it is not going to pass in its current form.”

Inflation caps
Senate Republicans have balked at provisions in the Grassley-Wyden bill that cap drug price increases in Medicare Part D to the consumer inflation levels (see “Republicans Balk at Senate Finance Drug Pricing Bill”).

Wyden and other Democrats have said they will not support the legislation if the inflation caps are removed.

Grogan indicated that the White House will not attempt to remove the inflation caps. He called the provisions, which PhRMA and BIO have lobbied against, a “bipartisan compromise.”

He highlighted the $3,100 out-of-pocket cap for Medicare Part D beneficiaries and said that enacting the Grassley-Wyden drug pricing bill would represent a “win” for both Republicans and Democrats. “The shortest route to a bipartisan solution that would be a real win for Democrats, Republicans, the president, and more importantly, the American people is Grassley-Wyden and we’re working very hard to get that done and get that moving.”

The Trump administration has considered and rejected proposals that would paper over discontent over drug pricing by subsidizing out-of-pocket costs without changing prices, Grogan said. “It would have been easy for the president to say ‘I’m going to solve the drug pricing problem by throwing more taxpayer subsidies into the system and helping people do out of pocket co-pays.’”

Instead, Grogan said, President Trump “wants to lower list prices [and] clear out a lot of the convoluted incentives that drive prices up and expose patients and the American people to excessive costs.”

There are ongoing talks about modifying the PDPRA, and about bundling it with other legislation that has bipartisan support, but it is too late to introduce new proposals, Grogan said. “We’re out of time for new ideas.”

Drug pricing legislation could be attached to spending or other bills that must pass this year, or could be enacted as a stand-alone bill, Grogan said. In either case, he emphasized the tight deadline for action. Preoccupation with election campaigns, with impeachment proceedings, are likely to prevent Congress from considering bipartisan legislation next year.

Citing the need to enact legislation by year end, Grogan said the drug pricing "package needs to be wrapped up in the next few weeks.”

One change that could be made, he said, is to direct cost-savings from restricting Medicare Part D to subsidize premiums.

Other provisions that could be included in the final legislation, according to Grogan, include banning pay-for-delay deals; incorporating the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act that seeks to eliminate some business practices that slow or block the development of generics and biosimilars; and increasing add-on payments in Medicare Part B for biosimilars.

No comment on IPI, enthusiasm for importation
Grogan declined to respond to questions about the Trump administration’s proposal to tie Medicare Part B drug prices to an international pricing index, saying that the he cannot comment on the proposed rule because it is under review by the Office of Management and Budget.

He did express support for drug importation, a policy that President Trump has repeatedly championed.

Grogan made it clear that HHS Secretary Alex Azar, who told reporters in May 2018 that drug importation is a “gimmick” that could expose patients to dangerous products and wouldn’t bring down prices, is poised to approve importation proposals. “Secretary Azar has made it clear that his concerns around it can be alleviated because of the modernization of supply chain tools that can allow for importation through a mechanism to make sure that there’s no adulteration.”

He added: “We’re not talking [about] importing drugs from Thailand through Canada. We’re talking [about] safe effective drugs that could be imported into the United States, provided a state wants to do that. We’ve been working very closely with states like Florida and Colorado and others on exactly how that could be achieved.”

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