While there is certainly no shortage of proposals on drug pricing from the administration, a proposed Senate bill is taking a multipronged approach to the issue. The Prescription Drug Pricing Reduction Act (PDPRA) of 2019, introduced by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), proposes multiple changes to Medicare Part B and Part D, as well as Medicaid. According to a preliminary estimate by the Congressional Budget Office (CBO), 10-year savings to the federal government would total more than $100 billion, AIS Health reported.
Proposals within the bill include caps on drug price increases in both Part B and Part D, as well as caps on out-of-pocket (OOP) spend for beneficiaries via a complete restructuring of Part D. It also proposes including patient coupons within the average sales price calculation, boosting the add-on payment for a Part B biosimilar from 6% of the reference drug’s ASP to 8% for a five-year period and banning spread pricing in Medicaid.
The CBO’s preliminary estimate shows 10-year savings of $85 billion in Medicare and $15 billion in Medicaid, as well as $32 billion in beneficiary savings.
“Rebates seem to drive a significant amount of savings,” notes Lisa Kennedy, Ph.D., chief economist at Innopiphany, LLC, “but it is hard to see from the CBO analysis if that is from overall price reductions or from the actual rebates that pharmaceutical manufacturers would have to pay.”
“I think what is interesting is the bill managed to capture many of the issues that have been contentious in the public debate recently,” says Jeremy Schafer,
Pharm.D., senior vice president, director, access experience team at Precision for Value. “If you look across the health care marketplace, it seems as though almost everyone is affected in one way or another.”
“The bill presents a huge push towards incentivizing biosimilars in a lot of different ways,” observes Kennedy. She also contends that the OOP cap on Medicare expenditures “is an important patient-centered change.”
Another aspect of the proposal would require PBMs “to become more transparent and share information on the HHS website regarding aggregate discounts,” notes Schafer. “As transparency requirements grow, the PBM business model will be challenged and need to adapt.”