House Education & Labor Committee Issues Report on Lower Drug Costs Now Act (Part 2 of 2)

WASHINGTON, Dec. 30 -- The House Energy and Commerce Committee has issued a report (H. Rept. 116-324) Part 1 on the Lower Drug Costs Now Act (H.R. 3), to establish a fair price negotiation program, protect the Medicare program from excessive price increases, and establish an out-of-pocket maximum for Medicare part D enrollees, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. The report was advanced by Rep. Bobby Scott, D-Virginia, on Dec. 9:

Continues from 1

Statement of Performance Goals and Objectives

Pursuant to clause (3)(c) of rule XIII of the Rules of the House of Representatives, the goal of H.R. 3 is to lower drug costs for the American people by establishing a fair price negotiation program, protecting consumers from excessive price increases, and establishing an out-of-pocket maximum for Medicare part D enrollees.

Duplication of Federal Programs

Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House of Representatives, the Committee states that no provision of H.R. 3 establishes or reauthorizes a program of the Federal Government known to be duplicative of another federal program, a program that was included in any report from the Government Accountability Office to Congress pursuant to section 21 of Pub. L. No. 111-139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance.

Hearings Pursuant to section 103(i) of H. Res. 6 for the 116th Congress, on September 26, 2019, the Committee on Education and Labor's Subcommittee on Health, Employment, Labor, and Pensions held a legislative hearing entitled "Making Health Care More Affordable: Lowering Drug Prices and Increasing Transparency," which was used to consider H.R. 3. The hearing explored the rising cost of prescription drug prices in the United States and the impact of high prices on workers and businesses. The Committee heard testimony from Mr. Frederick Isasi, Executive Director, Families USA; Mr. David Mitchell, Founder, Patients for Affordable Drugs; Ms. Bari Talente, Executive Vice President, National Multiple Sclerosis Society; Dr. Mariana Socal, Assistant Scientist, Johns Hopkins University Bloomberg School of Public Health; Christopher Holt, Director of Health Care Policy, American Action Forum; and Dr. Craig Garthwaite, Associate Professor of Strategy, Northwestern University Kellogg School of Management.

Statement of Oversight Findings and Recommendations of the Committee

In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) of rule X of the Rules of the House of Representatives, the Committee's oversight findings and recommendations are reflected in the descriptive portions of this report.

New Budget Authority and CBO Cost Estimate Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House of Representatives and section 308(a) of the Congressional Budget Act of 1974, and pursuant to clause 3(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 1974, the Committee has requested but not received a cost estimate for the bill from the Director of the Congressional Budget Office.

Committee Cost Estimate Clause 3(d)(1) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison of the costs that would be incurred in carrying out H.R. 3. However, clause 3(d)(2)(B) of that rule provides that this requirement does not apply when the committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974. The Committee reports that because this cost estimate was not timely submitted to the Committee before the filing of this report, the Committee is not in a position to make a cost estimate for H.R. 3, as amended.

Changes in Existing Law Made by the Bill, as Reported In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, H.R. 3, as reported, are shown as follows: Changes in Existing Law Made by the Bill, as Reported In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, and existing law in which no change is proposed is shown in roman): SOCIAL SECURITY ACT* * * * * * *TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE SIMPLIFICATION * * * * * * *PART E--FAIR PRICE NEGOTIATION PROGRAM TO LOWER PRICES FOR CERTAIN HIGH-PRICED SINGLE SOURCE DRUGS SEC. 1191. ESTABLISHMENT OF PROGRAM.

(a) In General.--The Secretary shall establish a Fair Price Negotiation Program (in this part referred to as the "program"). Under the program, with respect to each price applicability period, the Secretary shall-- (1) publish a list of selected drugs in accordance with section 1192; (2) enter into agreements with manufacturers of selected drugs with respect to such period, in accordance with section 1193; (3) negotiate and, if applicable, renegotiate maximum fair prices for such selected drugs, in accordance with section 1194; and (4) carry out the administrative duties described in section 1196.

(b) Definitions Relating to Timing.--For purposes of this part: (1) Initial price applicability year.--The term"initial price applicability year" means a plan year(beginning with plan year 2023) or, if agreed to in an agreement under section 1193 by the Secretary and manufacturer involved, a period of more than one plan year (beginning on or after January 1, 2023).

(2) Price applicability period.--The term "price applicability period" means, with respect to a drug,the period beginning with the initial price applicability year with respect to which such drug is as elected drug and ending with the last plan year during which the drug is a selected drug.

(3) Selected drug publication date.--The term"selected drug publication date" means, with respect to each initial price applicability year, April 15 of the plan year that begins 2 years prior to such year.

(4) Voluntary negotiation period.--The term"voluntary negotiation period" means, with respect to an initial price applicability year with respect to as elected drug, the period-- (A) beginning on the sooner of-- (i) the date on which the manufacturer of the drug and the Secretary enter into an agreement under section 1193 with respect to such drug;or (ii) June 15 following the selected drug publication date with respect to such selected drug; and (B) ending on March 31 of the year that begins one year prior to the initial price applicability year.

(c) Other Definitions.--For purposes of this part: (1) Fair price eligible individual.--The term "fair price eligible individual" means, with respect to as elected drug-- (A) in the case such drug is furnished or dispensed to the individual at a pharmacy or by a mail order service-- (i) an individual who is enrolled under a prescription drug plan underpart D of title XVIII or an MA-PD plan under part C of such title under which coverage is provided for such drug; and (ii) an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market (as such terms are defined in section 2791 of the Public Health Service Act) with respect to which there is in effect an agreement with the Secretary under section 1197with respect to such selected drug as so furnished or dispensed; and (B) in the case such drug is furnished or administered to the individual by a hospital, physician, or other provider of services or supplier-- (i) an individual who is entitled to benefits under part A of title XVIII or enrolled under part B of such title if such selected drug is covered under the respective part; and (ii) an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market (as such terms a redefined in section 2791 of the Public Health Service Act) with respect to which there is in effect an agreement with the Secretary under section 1197with respect to such selected drug as so furnished or administered.

(2) Maximum fair price.--The term "maximum fair price" means, with respect to a plan year during a price applicability period and with respect to as elected drug (as defined in section 1192(c)) with respect to such period, the price published pursuant to section 1195 in the Federal Register for such drug and year.

(3) Average international market price defined.-- (A) In general.--The terms "average international market price" and "AIM price" mean, with respect to a drug, the average price (which shall be the net average price, if practicable, and volume-weighted, if practicable) for a unit (as defined in paragraph (4)) of the drug for sales of such drug (calculated across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type), as computed (as of the date of publication of such drug as a selected drug under section 1192(a)) in all countries described in clause (ii) of subparagraph (B) that are applicable countries (as described in clause (i) of such subparagraph) with respect to such drug.

(B) Applicable countries.-- (i) In general.--For purposes of subparagraph (A), a country described in clause (ii) is an applicable country described in this clause with respect to a drug if there is available an average price for any unit for the drug for sales of such drug in such country.

(ii) Countries described.--For purposes of this paragraph, the following are countries described in this clause: (I) Australia.

(II) Canada.

(III) France.

(IV) Germany.

(V) Japan.

(VI) The United Kingdom.

(4) Unit.--The term "unit" means, with respect to a drug, the lowest identifiable quantity (such as a capsule or tablet, milligram of molecules, or grams) of the drug that is dispensed.

TARGETED NEWS SERVICE, Harwood Place, Springfield, Virginia, USA: Myron Struck, editor; 703/304-1897; [email protected]; https://targetednews.com