Budget Deal Reached to Raise Budget Caps
The House and Senate approved a budget agreement that would raise the current budget caps on non-defense discretionary spending and defense spending for two years. The budget caps were put into place as part of the Budget Control Act and would have resulted in $55 billion in cuts to non-defense discretionary spending that funds programs like NIH and other domestic programs. The budget agreement is the result of negotiations reached between congressional leaders and President Trump.
Senate appropriators will now begin working to craft their fiscal year (FY) 2020 spending bills that reflect the new funding levels. The House has already moved on several of their appropriations bills and has recommended a $2 billion increase for NIH for FY 20. AGA and the entire medical research community support this funding level and AGA members will be in Washington in September advocating that Congress enact this funding level.
Senate Finance Committee Approves Drug Pricing Legislation
The Senate Finance Committee approved the Prescription Drug Pricing Reduction Act of 2019 that would overhaul drug payment in Medicare Part B and D increase more transparency in the drug supply chain. The legislation would require the Department of Health and Human Services (HHS) to disclose discounts they receive from pharmacy benefit managers (PBMs) and also require pharmaceutical manufacturers to justify price increases to HHS. Pharmaceutical manufacturers would also be required to rebate the Medicare program when the price for a drug exceeds the rate of inflation. The legislation would also increase the amount of reimbursement for biosimilar to the average sales price (ASP) plus 8 percent whereas the ASP for drugs and biologics would be changed to a maximum add on price. Payments to drugs and biologics would be reduced from the current ASP plus 6 percent to a wholesale acquisition cost (WAC) add on of no greater than 3 percent when ASP is not available for drugs, biologics or biosimilars furnished on or after Jan. 1, 2019.
This legislation will likely be added to legislation that the Senate Health Education Labor and Pensions Committee and Senate Judiciary Committee have advanced into one large drug pricing package. Drug pricing remains a top priority for both political parties and the Trump administration and will likely be a key issue in the 2020 elections.
President Trump Announces Plan for Drug Reimportation
The Trump administration announced that it is proposing allowing certain drugs to be imported from Canada and other countries that are cheaper than what they cost in the U.S. The administration is proposing allowing states and companies to pilot drug importation programs and assured the public that there were mechanisms in place to ensure safety. However, the plan would not allow controlled substances, IV drugs and biologics such as insulin and Humira. The Food and Drug Administration (FDA) will also provide manufacturers to offer a lower price for the imported versions of the drugs they sell oversees. This pathway could include biologics.
