An upcoming Senate bill is the Trump administration’s best hope for a significant achievement before next year’s election to lower prescription drug prices, but a lot still needs to go right for anything to become law.
Despite the overwhelming desire for action, there are still policy gulfs between Republicans and Democrats in the Senate, and another gap between the Senate and the House. And the politics of the moment might derail potential policy agreements. Some Democrats might balk at settling for a drug pricing compromise that President Donald Trump endorsed.
Trump continuously touts his efforts on drug pricing, but his record remains limited, especially after two major setbacks to his drug pricing agenda last week.
A federal judge declared a rule to require prices in drug advertisements was illegal, and the administration pulled back a rule meant to pass savings from manufacturer rebates to Medicare recipients after it became clear the policy would raise premiums for seniors more broadly.
The drug pricing issue resonates deeply with voters. Public polling shows broad support for virtually any initiative that could bring down drug prices. A Kaiser Family Foundation poll in February found 63 percent of respondents said there should be more regulation to limit prescription drug prices.
With major pieces of the Trump drug pricing agenda stalled, legislation offers the greatest chance for policies that will affect people’s pocketbooks.
The Senate is on the verge of a bipartisan deal that could have the biggest impact.
Finance Committee leaders Charles E. Grassley, R-Iowa, and Ron Wyden, D-Oregon, are close to a deal on legislation that would lower costs for seniors in Medicare’s drug benefit, slow price growth in the program and make it easier for state Medicaid programs to afford the most expensive drugs, according to lobbyists following the legislative process.
The committee is waiting for a Congressional Budget Office estimate before moving forward, lobbyists say. However, the Trump administration’s decision last week to pull the rebate rule prompted the CBO to revise its estimates because the rule’s price tag no longer applies.
It’s possible that the Finance bill could be released later this week and marked up next week, lobbyists say. On that schedule, the Senate could potentially bring the bill to the floor the week of July 29, packaged with a bipartisan Health, Education, Labor and Pensions Committee measure and several bills the Judiciary Committee approved last month.
But a Grassley-Wyden agreement would not ensure the Senate can advance a bill. While lobbyists say that a Finance plan will likely involve caps on price inflation for physician-administered drugs in the Medicare Part B outpatient program, the parties are split on whether those controls are appropriate for Medicare Part D, which covers prescriptions that seniors pick up at the pharmacy and encompasses most of the federal government’s drug spending.
“We are concerned that the proposals currently under discussion may not go far enough in reducing the cost of prescription drugs for all of our constituents,” Sens. Sherrod Brown of Ohio, Debbie Stabenow of Michigan and Finance Committee Democrats wrote last week urging panel leaders to consider negotiation in Medicare.
Wyden on Tuesday said that he strongly supported what his colleagues said in the letter about negotiation, but noted that the letter stopped short of saying they would oppose the bill if it wasn’t included.
“The letter said that the signers thought it was very important, period, full stop,” he said. “I’m going to leave it at that.”
Senate Republicans will likely reject more government involvement in the Part D program.
Still, some advocates and lobbyists say that inflation caps in Part D could move if the Trump administration threatens an even less popular and dramatic policy that would peg some Medicare reimbursement rates to the prices paid by other countries.
“This is the administration signaling to pharma, ‘Look, you better come to the table,’” said Ted Okon, executive director of the Community Oncology Alliance, which represents independent cancer treatment practices.
And some Republicans outside of Congress say an inflation cap is appropriate because of other looming changes to Part D. Congress is considering capping out-of-pocket Medicare costs for consumers, which would make beneficiaries less sensitive to price. That could make it easier for drugmakers to raise prices.
“Congress should require that drug companies selling drugs into Part D rebate any price increases above consumer inflation to Medicare,” Avik Roy, a Republican health policy expert and president of the Foundation for Research on Equal Opportunity, wrote in Forbes last month. “Without reforms of this type, it’s highly likely that restructuring Part D would drive costs upward.”
Even if the Senate is successful, differences with the House could complicate things. When it’s time to reconcile drug price bills, the House could have a Medicare negotiation plan that could come far too close to price controls for Senate Republicans.
But voters broadly support giving Medicare more power. Eighty-six percent of Kaiser survey respondents favor letting Medicare negotiate drug prices, although support falls to 25 percent if that means excluding coverage for some drugs.
Support is also high for several other drug policy options. Nearly nine in 10 respondents support price transparency in TV ads and speeding generic drugs to market, both of which the administration has championed. Eight in 10 support importing drugs from Canada.
“They just really want prices to come down and they don’t care as much about how you get there,” Liz Hamel, director of public opinion and survey at Kaiser, told CQ Roll Call.
And Trump can push Republicans away from some of their traditional views. With Trump’s urging, former opponents of drug importation, like Health and Human Services Secretary Alex Azar, now call it a realistic way forward.
At a briefing with reporters last week, Azar said that while safety concerns previously prevented HHS from signing off on any importation policies, there had been enough changes to the international drug supply chain to support a shift.
“So the president and I are committed to importation and making that work, and we’re working on that now,” Azar said.
A recent study published in the New England Journal of Medicine found more than two-thirds of voters say health care costs should be a priority for Trump and Congress this year. Robert Blendon, director of Harvard University’s opinion research program and the study’s co-author, says Trump understands that voters will focus on issues that affect their personal costs.
Trump is still lacking a big health care win that affects voters’ budgets directly, putting more pressure on Congress to strike a deal.
“Whoever is running in the general election is going to find people saying to them, ‘You better talk about the pocketbook issues,’” Blendon said.