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Congressional Update: Drug Pricing Reform Still Front and Center

Posted: September 24, 2021

In the House, committees of jurisdiction have finished their work on a $3.5 trillion budget reconciliation package, completing one step on what has become a bumpy road to enactment. It is expected that not a single Republican will vote for the legislation, which means that Democratic leadership must unite virtually their entire caucus in support of the bill. This is a challenge, as the caucus has differing views on a range of issues contained in the bill, including the issue of drug pricing.

The open question on drug pricing revolves around H.R.3, Speaker Pelosi’s landmark drug pricing reform bill that would empower the U.S. government to set drug prices using international reference pricing. Given that one House committee voted to include H.R.3 in the bigger budget reconciliation bill but another committee didn’t, leadership must now negotiate a budget reconciliation bill for a Floor vote that includes as much of H.R.3 as possible without losing support from the moderate Democrats who voted against it in committee. An additional challenge is that H.R.3 generates a large portion of the “pay-fors” that Democrats need to finance other priorities in the legislation.

If the Speaker and her team can shepherd the bill through the House, it still faces obstacles in the Senate. Democratic Senator Manchin of West Virginia has signaled opposition to the $3.5 trillion size of the bigger bill, while Senators Sinema of Arizona and Carper of Delaware have expressed concern over the scope of the drug pricing provisions. In an evenly divided Senate, Democrats cannot lose a single vote.

From the rheumatology perspective, what happens with H.R.3 will have an impact on future Part B drug payment reform models. The Administration is interested in the concept behind the now-withdrawn Most Favored Nation model, but if H.R.3 is enacted, the need for such a model is greatly reduced, since international reference pricing for high-expenditure drugs would be established.