Prescription Drug Pricing Articles

Pelosi’s drug pricing plan would let Medicare negotiate prices for up to 250 drugs
By LEV FACHER @levfacherSEPTEMBER 19, 2019

WASHINGTON — House Speaker Nancy Pelosi unveiled her long-awaited plan to lower drug prices Thursday.

The progressive plan gives Democrats an aggressive counter to the White House’s numerous and widely covered efforts to lower drug prices. But the plan also serves, in some ways, as an olive branch to President Trump: Pelosi included many of the administration’s own ideas in her document, in apparent hopes of gaining his support.

According to a legislative summary obtained by STAT, the plan would enact an international price index, capping U.S. drug payments for Medicare at an average of foreign prices, which mirrors a signature White House proposal. It would allow the federal government to negotiate the cost of 250 prescription medicines that don’t face market competition, using the international price as a maximum price, and extend the negotiated price to insurers and the commercial market at large. The bill would also cap seniors’ out-of-pocket drug expenses at $2,000 annually.

“We don’t want a political issue at the polls,” Pelosi said at a Thursday morning press conference. “We want a solution in the Congress, and we want it now.”

Pelosi’s final proposal, in some ways, is more aggressive than prior concepts that had circulated among lobbyists and congressional staff this year. It abandons a proposal to use binding arbitration to settle negotiation disputes, which progressives had opposed. Prior versions also did not include an international price index, which has become an unexpected point of agreement between Trump and progressives.

But progressives are sure to object to language empowering the health secretary to negotiate prices “on as many as possible of the 250 most costly drugs.” For the past decade, Democrats have introduced bills that would allow negotiation for all Medicare drugs, and progressives had hoped 250 drugs would be a minimum requirement, not a maximum.

The bill also requires drug manufacturers to pay back the value of price hikes above inflation, dating back to 2016, in a rebate to the federal government. It penalizes drug companies who fail to reach negotiating agreements with non-compliance fees beginning at 65% of the drug’s gross sales.

The aggressive tone of Pelosi’s legislation, however, likely diminishes the odds of a sweeping congressional compromise on any substantial drug pricing reform.

Sen. Chuck Grassley (R-Iowa), the chair of the Senate Finance Committee, struggled over the summer to win GOP support for his committee’s comparatively moderate drug pricing bill, which does not include foreign price caps or any form of Medicare negotiation. The Trump administration has already endorsed the Grassley plan, making it all the more unlikely the White House would lend support to a distinct Democratic proposal.

House Republicans were quick to bash Pelosi’s proposal. In a joint statement, the 24 GOP members of the House Energy and Commerce Committee accused the speaker of “pushing a socialist proposal to appease her most extreme members.”

Lobbyists and congressional aides believe Sen. Mitch McConnell (Ky.), the GOP majority leader, as unlikely to allow any legislation that caps drug price increases at the rate of inflation to pass the Senate.

Given McConnell’s resistance, lobbyists and many Capitol Hill aides see Pelosi’s plan more as politics than policy. While President Trump is unlikely to ever sign it into law, it still gives House Democrats a strong drug pricing platform on which to run in 2020.

“If Donald Trump engaged on this policy, it would have a meaningful impact on the chances of this legislation,” said Chris Jennings, a top health policy adviser to the Obama administration, in an interview. “There’s a Washington consensus that this is done and pharma has won, and that’s what pharma lobbyists want the perception to be. I don’t believe that.”

Whether Democrats can advance the bill out of the House also remains an open question.

The Pelosi plan was developed in large part by her domestic policy advisor Wendell Primus, to the chagrin of House progressives and lawmakers on key health care committees who felt left out of formulating the sweeping legislation.

Rep. Mark Pocan (D-Wisc.), the co-chair of the Congressional Progressive Caucus, has taken to joking that Primus is more powerful than many elected members of Congress. Rep. Pramila Jayapal (D-Wash.), the other co-chair, indicated this summer that Pelosi’s measure must move left to gain her group’s support.

Democrats are likely to move forward with hearings on Pelosi’s proposal in the coming weeks before the Energy and Commerce Committee and Ways and Means Committee. The chairmen of those committees, however, are seen as historically sympathetic to the drug companies that are major economic drivers in their states.

Rep. Richard Neal (D-Mass.), the Ways and Means Committee chair, received $111,500 in campaign contributions from drug industry political committees in the 2018 election cycle — fifth most out of all members of Congress, according to the Center for Responsive Politics. Rep. Frank Pallone (D-N.J.), the Energy and Commerce chair, received $98,500 from pharmaceutical PACs, ninth-most among all lawmakers.

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Our 9 biggest questions about Nancy Pelosi’s drug pricing bill
By NICHOLAS FLORKO @NicholasFlorko and LEV FACHER @levfacherSEPTEMBER 19, 2019

WASHINGTON — Nancy Pelosi unveiled House Democrats’ long-rumored plan to lower drug prices on Thursday, following months of speculation and back-and-forth between House progressives and the speaker’s policy advisers.

It’s a comprehensive plan: The bill would allow the federal government to negotiate the price of up to 250 drugs under Medicare and extend that price to the commercial market. It would force drug companies to pay back price hikes above inflation, dating back to 2016, to the federal government. It would also enact a price cap for U.S. drugs based on an index of prices in six foreign countries.

It’s unclear how the bill will play with House progressives, who for months had agitated for an aggressive drug pricing bill that would follow through on Democrats’ 2018 campaign pledges to allow direct Medicare price negotiation.

It’s similarly unclear whether moderate Democrats and the White House will take to Pelosi’s proposal, even after months of rare bipartisan rhetoric on drug prices.

Here are STAT’s biggest questions following Pelosi’s press conference.

1. Will progressives support it?
Pelosi has worked for months to mollify her party’s left flank, which has agitated for drug pricing legislation that, in the words of Rep. Mark Pocan (D-Wis.), is “big and bold, not meek and weak.”

Whether Pelosi’s bill meets that threshold remains unclear. Progressives had hoped for language requiring that the health secretary negotiate prices for 250 drugs; instead, the bill caps negotiations at 250 drugs and requires a floor of just 25.

Progressives had also hoped to use “compulsory licensing” — effectively, awarding a separate company a license to manufacture a generic version of a costly brand drug if the brand-name company can’t reach an agreement with the government — as leverage for price negotiations. But that proposal from Rep. Lloyd Doggett (D-Texas) has gone ignored, despite his chairmanship of a key health subcommittee. It’s unclear whether progressives will get on board with the new negotiating “backstop” of an international reference price. That policy would instead force drug makers to negotiate a price lower than the international average or face a penalty beginning at 65% of a drug’s gross sales.

Pelosi did give progressives one major win: The plan does not include a binding arbitration process to settle price-negotiation disputes, which progressives had staunchly opposed.

2. And what about moderates?
As Pelosi works to appease her progressive flank, she also needs to worry about the moderates in her caucus, who may see this plan as too anti-industry. Pelosi attempted to sell the plan Wednesday to Democrats’ main moderate caucuses, the Blue Dog and the New Democrat coalitions.

“Everybody wants to ensure that innovation continues to happen, that cures continue to happen, everyone wants to make sure those cures are accessible and affordable for their constituents as well,” said Rep. Derek Kilmer (D-Wash.), chair of the New Democrats. “And that’s the narrow needle that needs to be thread in this conversation.”

If Pelosi can’t prove her plan threads that needle, she could lose a sizable chunk of her own party’s support: There are 103 members of the New Democrat coalition, nearly a quarter of the entire House. (The Progressive Caucus has 95 — strangely, there’s substantial overlap between the two groups.)

3. What leverage would the government have in negotiations?
Democrats have floated two main ideas to make sure drug companies would be incentivized to come to the table for drug-price discussions under any Medicare negotiation plan. The first, compulsory licensing, is a nonstarter for moderates. The second, binding arbitration, is a nonstarter for progressives.

So what’s Pelosi left with? Under her plan, the government would assess a fee on drugs that companies refuse to reach a negotiated agreement on. That fee would begin at 65% of the drug’s gross sales and escalate quarter by quarter as the standoff continues, up to 95%.

That’s some serious leverage — so much so that critics have called the plan “government price-setting” versus negotiation. “It’s an interesting use of the term negotiate,” said Craig Garthwaite, a Northwestern University health economist. “It’s: You’ll negotiate down to within 20% of the international price or we’ll take all of your money.”

Given that Pelosi’s negotiation plan relies on an international price cap, it’s likely that “negotiated” drug prices would end up largely equal to the average foreign price — it’s unclear what leverage Medicare would have to make drug makers go even lower.

4. How many drugs would Medicare negotiate for?
Pelosi’s plan says the secretary should negotiate for as many drugs as possible under the 250-drug cap for Medicare price evaluations — a stunningly unspecific mandate for a cabinet department. The 25 most expensive drugs under Medicare Part D cost the program $45 billion in 2017, or just shy of 30% of the program’s total costs, according to an analysis from the advocacy group Patients for Affordable Drugs. The 250 most expensive drugs cost $118 billion, or 78% of the program’s costs.

In a bill summary, Pelosi’s office said “the Secretary will negotiate as many drugs as possible each year, with a bare minimum of 25 annually, recognizing the practical capacity and bandwidth constraints on HHS.”

In her press conference, Pelosi said Congress would consider using savings from the bill to “increase the absorptive capacity of the secretary’s office” — in other words, to fund new staff and resources for the Department of Health and Human Services to facilitate negotiations.

There’s no telling how resource intensive those negotiations will be. The biggest burden may be in setting up the system of monitoring international prices — drug pricing experts, like MedPAC, Congress’ Medicare advisers, have pegged that as one of the biggest barriers to setting up a “reference pricing” system like the one proposed by Pelosi and by the Trump administration as part of it’s “international price index” proposal.

5. What drugs are likely to be impacted?
The speaker’s plan would target the drugs “for which the greatest savings to taxpayers, patients, and all payers may be achieved.” That means the plan is likely to target the drugs that Medicare pays the most for each year.

According to 2017 Medicare data, those include: Celgene’s multiple myeloma drug Revlimid, Bristol Myers-Squibb’s blood thinner Eliquis, Merck’s diabetes treatment Januvia, Janssen’s blood thinner Xarelto, Gilead’s hepatitis C drug Harvoni, and Pfizer’s nerve pain drug Lyrica.

Exactly how much these negotiations would hurt each of these drugs makers largely depends on how much more they charge the U.S. for the products than they charge in other countries, but there isn’t great data on that question.

The plan would also formally direct HHS to negotiate the price of insulin, which could be a significant blow to the three companies that virtually control that market: Eli Lilly, Sanofi (SNY), and Novo Nordisk (NVO).

6. Could it ever earn the White House’s endorsement?
President Trump campaigned on lowering drug prices in 2016, and following the 2018 midterms, the issue was one of the few that he, Pelosi, and Senate Majority Leader Mitch McConnell agreed they could work on.

But Trump has already endorsed a separate, more moderate Senate Finance Committee package that would cap drug price increases at the rate of inflation, cap out-of-pocket pharmaceutical costs for seniors, and shift more costs to drug makers under Medicare. It’s unlikely he would endorse two, separate legislative efforts on drug pricing — especially since Republicans already oppose Pelosi’s so staunchly.

Many congressional aides, lobbyists, and policy experts, in fact, see Pelosi’s plan as partially a political document — a sweeping, bold drug pricing agenda for 2020, premised on the concession that Congress is unlikely to reach a compromise.

Nonetheless, Republicans already appear to be working to preempt a Trump endorsement. The 24 GOP members of the House Energy and Commerce Committee today issued a statement characterizing Pelosi’s plan as “socialist.” Two GOP advocacy groups, FreedomWorks and the American Conservative Union, have already launched similar social media campaigns.

FreedomWorks labeled Pelosi’s effort a “socialist price controls bill,” and the American Conservative Union has expressed similar opposition.

“The Speaker’s plan is just the latest example of a partisan messaging document masquerading as legislation,” said Sen. John Cornyn (R-Texas), who has become increasingly involved in drug pricing discussions as he seeks reelection in 2020. “It has absolutely no chance — zero, zip, nada — no chance of passing the Senate or becoming law.”

7. How would it tackle new drugs?
This question is perplexing policy wonks and lawmakers alike, and it’s left unanswered in the summary of the plan released by Pelosi Thursday.

It’s an important question: The U.S. is often the first market to get access to high-cost innovative drugs —  the sort of drugs Medicare would want to negotiate over. But at least at first, the government would have no international reference price for these drugs, which, under Pelosi’s plan, is required for the government’s negotiations.

Rep. Frank Pallone (D-N.J.), the chairman of the House Energy and Commerce Committee, said at Thursday’s press conference that the federal government would require a 15% discount on the launch price of new drugs that are not yet available overseas.

Pallone suggested that discount would only apply to drugs that meet the requirements for triggering the HHS negotiations — that is, that they are among the medicines Medicare’s spending the most money on. He acknowledged that few drugs would hit that threshold right away.

And it isn’t clear what would happen to that discount if, as a drug inched toward the top spender list, it also became available in some other markets.

“It may be that the time it takes for a drug to become one of the highest-spend products is enough to see it enter in other markets,” said Rachel Sachs, an associate professor of law at Washington University in St. Louis.

8. How much money would this plan save, and where would that money go?
Pelosi promised Thursday that the estimated savings from the package would be “enormous.”

The sweeping drug pricing package from the Senate Finance Committee can give us some hints: Both packages include similar changes to how Medicare divvies up drug costs, which the CBO estimates would save taxpayers roughly $35 billion over 10 years.

Both plans also would cap drug price increases to the rate of inflation. The CBO estimated the Senate provision would save taxpayers $57.5 billion over 10 years, but the House version is likely to save much more because it would not only cap future drug price increases at inflation, it would require drug makers to pay back past price hikes too.

And the House package is likely to rack up even more substantial savings given the Senate Finance package doesn’t have the cornerstone of the Pelosi proposal — allowing Medicare to negotiate over the high cost of drugs.

It’s a little clearer where the money will go. A summary of the Pelosi plan says the savings would be invested back into the National Institutes of Health to support discovery of new drugs, and “if the savings are great enough,” additional funds would go to improve Medicare benefits for seniors. Examples included in the summary include offering coverage for previously uncovered services, like hearing, dental and vision.

9. How would this plan impact innovation?
That’s perhaps the most loaded question of the debate. BIO, the trade group for large drug makers as well as small biotech startups, argued in a statement Thursday that the plan would “extinguish any incentive for investors to provide the necessary funds to advance biotech medical discovery.”

Pelosi’s plan tries to answer these criticisms by redirecting some of the money saved from negotiation into investment in the NIH. But that agency plays a fundamentally different role than biotech investors. More funding for the basic research overseen by NIH wouldn’t do anything to keep the investors responsible for funding the arduous process of bringing a drug to market interested in biotech, said Northwestern’s Garthwaite.

“There is no threading the needle in this bill if you care about innovation,” Garthwaite said. “You’re targeting the drugs that lack competition that probably create the most value for the market, and you’re basically putting that needle on the table and hitting it with a hammer.”

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Pelosi’s drug pricing plan could wipe out some key funding for low-income hospitals
By NICHOLAS FLORKO @NicholasFlorkoSEPTEMBER 30, 2019

WASHINGTON — A 60-word provision tucked into Nancy Pelosi’s signature drug pricing plan could wreak havoc on hospitals that serve the poor.

The provision deals with a federal drug discount program known as 340B that lets some hospitals and clinics buy medicines at a deep discount. When they’re reimbursed for the drugs at a higher price by Medicare or other insurers, they pocket the difference to help cover charity care, counseling services, and other costs.

Pelosi’s new bill — which includes a landmark proposal to let Medicare negotiate discounts on pharmaceuticals — would make it impossible to get a 340B discount for any drug that Medicare negotiates for. The provision would likely prevent hospitals from making money off of these drugs because they’d no longer be able to buy them for cheap and sell them for a profit. Instead, they’d get the same terms as any other ordinary hospital.

It’s impossible to know exactly how much money these hospitals stand to lose from Pelosi’s plan, but it’s likely in the billions. Drug makers offered roughly $6 billion in 340B discounts in 2015, according to the Department of Health and Human Services.

“While there is much to appreciate about H.R. 3, the 340B provision is both unnecessary and deeply problematic,” said Tim Horn, director of medication access and pricing at NASTAD, the association of public health officials treating HIV and hepatitis. Horn added that the provisions “could have seismic implications” for HIV clinics getting discounted drugs under the program.

Now, 340B hospitals are pushing Congress to rewrite the provision — but despite long-standing Democratic support for the 340B program, it isn’t clear that even Pelosi and her colleagues will answer that call.  Lobbyists for 340B hospitals tell STAT that staffers assured them the provisions would be rewritten, but staff for the same committee largely declined to answer STAT’s questions. The provision also went unnoticed and unmentioned at the first hearing on the massive bill, which was held last week.

“We are looking at potential changes to that language just to make it clear that the purpose would not be to get rid of the 340B program for those drugs,” said Maureen Testoni, CEO of 340B Health, the trade group representing 340B hospitals. Testoni said she believes the drafters didn’t intend to significantly shake up the program though she admitted the language was confusing and concerning.

The 340B program was created in 1992 to help hospitals serving the poor “stretch scarce federal resources as far as possible.” To be eligible for 340B discounts a hospital must either be state-owned, or a nonprofit, and treat a sizable low-income population.

The 340B discounts are also available to a slew of clinics beyond traditional hospitals, including hemophilia treatment centers, family planning clinics, and HIV centers known as Ryan White clinics.

Under the program, the government sets a maximum price manufacturers can charge hospitals for every drug covered under the program. Hospitals buy them and administer or prescribe them to patients at full cost. Hospitals use that difference between what they paid for a drug and what they’re reimbursed, known commonly as the spread, to supplement their budgets.

No one knows exactly how much hospitals make off that “spread,” because the prices set by the government aren’t publicly available. But some of the discounts are steep — under the rules, hospitals pay just a penny for a number of high-price medicines, including AbbVie’s rheumatoid arthritis drug Humira. Humira retails for more than $5,000, though it’s difficult to quantify exactly how much hospitals are reimbursed.

Under Pelosi’s plan, that delta would vanish if the government decided to negotiate the price of Humira.

Not every drug will have as stark of a change as Humira. At a minimum, however, hospitals would lose a 23% discount on brand drugs, which is the minimum discount 340B hospitals are entitled to for all brand drugs purchased under the program.

When asked how significantly losing that revenue stream could impact her members, Testoni demurred: “I don’t want to go out and say, ‘Oh, this would be a disaster,’ or, ‘This wouldn’t be a disaster’ until I have a better sense of … what the impact would really be.”

Others, however, were more emphatic.

If the drugs negotiated by the HHS secretary are important to the 340B program, “that could have major implications for the 340B program,” said Ross Margulies, an attorney at Foley Hoag.

Pelosi’s plan would impact more than just freestanding hospitals. It could also have a significant impact on a little-known federal program states use to provide free AIDS drugs to low-income patients.

The program, known as the AIDS Drug Assistance Program, or ADAP, not only is eligible for 340B discounts, but it is empowered to negotiate even steeper discounts that would also vanish under Pelosi’s plan, at least for any negotiated drugs. As of 2017, all 50 states ran an ADAP program and more than 230,000 Americans were treated by these programs, according to data from the Kaiser Family Foundation.

There’s no clear data on how much exactly drug makers discount their HIV drugs for ADAP, but the smattering of publicly available information suggests those discounts are significant.

Daniel O’Day, CEO of Gilead, the maker of the HIV drugs Truvada and Descovy, for example, told the House Oversight and Reform Committee earlier this year that his company gives ADAP providers 70% to 80% discounts.

Those could go away under Pelosi’s plan, according to Horn, the NASTAD director.

“Some medical and support services may need to be cut or scaled back, which would be antithetical to the new federal campaign to end HIV as an epidemic,” Horn warned. “If 340B program income for HIV programs goes away as a result of otherwise important federal legislation to curb drug costs, what can we do to make these programs whole?”

Heightening the concern: A number of the most popular HIV drugs cost Medicare a lot of money and lack generic competition — meaning they’d be prime targets for negotiation under Pelosi’s plan. Four HIV drugs, Janssen’s Prezista, Merck’s Isentress, Bristol-Myers Squibb’s Reyataz, and ViiV Healthcare’s Tivicay, all were identified recently by researchers as drugs lacking competition that are driving Medicare drug spending and cost much less in other countries.

Even seasoned drug pricing experts aren’t sure why Pelosi included the provision wiping out the 340B discounts in her bill.

“I do not understand the 340B intention,” Gerard Anderson, a professor at Johns Hopkins University and one of the witnesses who testified on the Pelosi bill this week, told STAT. “No one has ever discussed it with me.”

Other experts have hypothesized that perhaps the rationale is that requiring drug makers that are already being forced to negotiate over the price of drugs then give even larger 340B discounts could mean those drug makers would end up significantly underwater for those drugs.

“I can see some rationale,” Margulies, the Foley Hoag attorney, told STAT.

Advocates for 340B hope that the intent of the curiously worded section was to exclude 340B from the negotiation process entirely — meaning 340B hospitals would still get their discounts, and also wouldn’t benefit from the new lower price negotiated by the HHS secretary.

“I’m not saying that it exactly does that,” Testoni, the 340B president said, “but when I heard that that was the intent, I could understand a little bit more about why the language might be written in such a weird way.”

Lobbyists for 340B hospitals told STAT that they’re received assurances from congressional staff that they didn’t intend to significantly shake up the 340B program.

“We do think the language is problematic as written, but are assured that the authors did not mean to change the 340B program,” said Peggy Tighe, a lobbyist representing HIV clinics covered by the 340B program. “We are committed to working with them to ensure that the language is right.”

Those congressional staff, however, declined to answer most of STAT’s questions.

A spokesperson for the Energy and Commerce Committee, which held the first hearing on the bill Wednesday, said, “We understand the importance of the 340B program, we’re reviewing the issue and look forward to continuing to engage with stakeholders as we move forward with this process.”

A spokesperson for Pelosi told STAT that “the committees of jurisdiction are continuing to examine how the bill would interact with the 340B program.”

Staff for the Ways and Means Committee did not return a request for comment about the provision.

The sole mention of the program during Wednesday’s hearing came more than four hours after lawmakers and witnesses had examined countless parts of the bill. And only then, it was to enter a letter from 340B Health into the record.

“It is important that any actions by Congress to address high drug prices continue to allow 340B hospitals to purchase drugs at 340B discounted prices and access savings through the 340B program to support care for their low-income and rural patients,” the letter states. “We ask that Congress preserve the 340B program.”

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House progressives plot overhaul of Pelosi drug pricing bill
By LEV FACHER @levfacher and NICHOLAS FLORKO @NicholasFlorkoOCTOBER 15, 2019

WASHINGTON — In the eyes of progressive lawmakers, House Speaker Nancy Pelosi’s drug pricing legislation is less a finished masterpiece than a rough sketch.

For the past two weeks, left-wing legislators have plotted a top-to-bottom overhaul of the legislation, aided by outside advocacy groups who have compiled lists of a half-dozen or more changes to the sweeping Lower Drug Costs Now Act, Democrats’ signature drug pricing bill.

Lawmakers’ concerns with the legislation, which Pelosi unveiled last month, are numerous. Already, House progressives have circulated a laundry list of potential tweaks, ranging from the number of drugs eligible for Medicare price negotiation to immediately capping prices for new drugs upon their launch. They have backing, too, from an array of progressive groups including Families USA and Public Citizen.

The concerns highlight the long road ahead for Pelosi’s ambitious legislation, which she has said she hopes will pass the House by the end of October. But progressives’ strategy for extracting the concessions remains unclear, as does their willingness to ultimately oppose their party’s cornerstone health legislation this year.

“There’s no need at the outset to water anything down,” said Peter Maybarduk, the director of the Global Access to Medicines Program at the advocacy group Public Citizen, said in an interview. “It’s not a rewrite or a radically different structure — it’s just saying: Let’s make this bill as good as we can make it.”

Congressional aides and the outside groups are also jointly discussing an array of changes beyond the number of drug prices negotiated, including offering the Medicare-negotiated price of sole-source drugs to patients without insurance. Progressive lawmakers are also likely to seek changes to the international price index the Pelosi bill employs, using average prices across a group of 36 peer nations instead of the speaker’s narrower, six-country index.

They also hope to alter restrictions on which drugs are eligible for negotiation. Currently, the Pelosi plan restricts negotiation to monopoly drugs — meaning that high-priced drugs with generic competition, like versions of the allergy treatment EpiPen, would be ineligible.

The groups are also seeking an expansion of a provision that would force drug makers to pay back to the government the value of price increases dating back to 2016. Under progressives’ tweak, the new bill would force drug makers to pay those rebates to other insurers, too — not just the government.

The progressive advocacy comes amid a sea of pharmaceutical industry opposition. Stephen Ubl, the CEO of the pharmaceutical lobbying group PhRMA, last week said the Pelosi bill would result in “nuclear winter” for biotechnology companies aiming to bring new treatments to market.

The Congressional Budget Office on Friday said Pelosi’s legislation could result in between $500 billion and $1 trillion in lost drug industry revenue over the next 10 years. The loss could lead to between eight and 15 fewer new drug approvals in that span, according to the CBO report, out of an estimated 300 drugs brought to market.

The CBO score also indicated drug companies are likely to “compensate” for the results of negotiation by launching drugs at higher prices. Progressives’ tweaks, however, would likely allow for stricter price caps for new drugs and, broadly, result in savings even larger than those projected under Pelosi’s current legislation.

The Democratic Blue Dog Caucus, a group of comparatively conservative Democrats, have separately pleaded with Pelosi to take up relatively incremental drug pricing legislation independently of the broader measure — bills they argue could pass both the House and a Republican-controlled Senate.

The resistance, however, has done little to tamp down progressive Democratic angst. Throughout the year, lawmakers across the Democratic Caucus have complained that Pelosi and her powerful aide, Wendell Primus, excluded rank-and-file members and even key committees from the process of writing the bill.

More broadly, progressives despise that the bill fails to live up to a long-standing Democratic pledge: repealing the “non-interference” clause that bans the health secretary from negotiating directly for drug prices within Medicare.

Pelosi’s bill instead writes in an exemption to that clause, but leaves it in place — falling short of recent bills authored by Sens. Bernie Sanders (I-Vt.) and Amy Klobuchar (D-Minn.), as well as a longstanding attempt to repeal the clause outright.

“Those of us willing to challenge price gouging must work together to improve H.R. 3 by repealing the Republican prohibition on Medicare negotiation, expanding the number of drugs subject to negotiation beyond 25 annually, addressing sky-high launch prices, extending big price-spike protection to all patients,” Rep. Lloyd Doggett (D-Texas), a longtime drug pricing agitator, said in a statement.

Progressives’ broader strategy, however, remains unclear. Currently, lawmakers and aides remain in talks with staff for Pelosi and staff for key committees, and when she introduced the legislation, Pelosi said she welcomed feedback and amendments from her caucus.

The House Ways and Means Committee will hold a hearing on the legislation Wednesday, following recent hearings conducted by the two other relevant committees: Energy and Commerce, and Education and Labor.

Aides pointed to Democratic Reps. Jimmy Gomez (Calif.), Jan Schakowsky (Ill.), and Doggett as the members within the committees most likely to agitate for leftward movement on the Pelosi bill. Reps. Pramila Jayapal (Wash.) and Mark Pocan (Wisc.), the co-chairs of the Progressive Caucus, remain vocal advocates for tweaks as well, but Pocan sits on none of the three committees, while Jayapal is a member of only the Education and Labor panel.

Democratic leadership aides declined to speculate as to whether progressives would be willing to vote against legislation they see as insufficiently aggressive if they are unable to exact changes to Pelosi’s bill.

The Trump administration, meanwhile, has said little regarding Pelosi’s proposal, even as congressional Republicans and outside conservative groups have called the legislation “socialist” and partisan.

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Pelosi: Democrats will name marquee drug pricing bill for late Rep. Cummings
By LEV FACHER @levfacherOCTOBER 17, 2019

WASHINGTON — House Democrats’ signature legislation to lower the cost of prescription drugs will be named for the late Rep. Elijah Cummings (D-Md.), House Speaker Nancy Pelosi said on Thursday.

Cummings, a longtime Baltimore politician, who passed away early Thursday at age 68, chaired the House Committee on Oversight and Reform, and was a longtime champion for lowering drug prices.

It was Cummings who most famously called to account Martin Shkreli, the hedge fund manager of “pharma bro” fame, after his pharmaceutical company acquired the rights to a 6o-year-old antiparasitic medication and raised its price from $13.50 to $750.

“It’s not funny, Mr. Shkreli,” Cummings said as Shkreli smirked. “People are dying, and they’re getting sicker and sicker.”

More recently, in one of his first actions as Oversight Committee chairman, Cummings launched a sweeping investigation into the price of prescription drugs. The probe, which remains ongoing, sought information from 12 drug companies, seeking 10 years of data ranging from total revenues to patent practices to executive and employee compensation.

It is unclear what Cummings’ death means for the investigation, or which Democratic lawmaker will chair the committee in his place.

In 2017, before he became Oversight Committee chairman, Cummings even requested a meeting with President Trump to discuss drug prices, a signature campaign issue during the president’s campaign the year prior.

The relationship later fizzled, though Trump and Cummings continually referenced the meeting as each pursued separate drug pricing strategies in the following two years.

Rep. Richard Neal (D-Mass.), the chairman of the House Ways and Means Committee, began a Thursday hearing on H.R. 3, the Democratic drug pricing bill, by suggesting he would consider renaming the bill for Cummings. Pelosi announced her support for the change Thursday morning at her weekly press conference.

“So appropriate, because Elijah was a fighter for lowering the cost of prescription drugs,” Pelosi said. “He … even had dialogue with the president for a while on this subject, so it would be very appropriate that H.R. 3 would now be the Elijah Cummings Lower Drug Costs Now legislation, whatever the formal title will be.”

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Buttigieg unveils an aggressive plan for lowering drug prices
By NICHOLAS FLORKO @NicholasFlorko and LEV FACHER @levfacherOCTOBER 7, 2019

WASHINGTON — South Bend, Ind., Mayor Pete Buttigieg on Monday unveiled a sweeping plan aimed at lowering prescription drug prices — and though he’s one of the most moderate Democrats in the 2020 presidential race, the plan is anything but.

Buttigieg’s proposal includes a number of drug pricing ideas once seen as radical, including a policy change that would force pharmaceutical manufacturers to forfeit as much as 95% of a drug’s revenue if the company refuses to negotiate prices. “Worst offender” drug companies could also forfeit their patent rights.

“It’s time for a new era of leadership in Washington ready and eager to make drugs affordable and take on pharmaceutical companies,” states a policy paper that the Buttigieg campaign shared with STAT. “Pete has the courage to break with the status quo by focusing on real solutions that will lower costs and make needed—even life-saving—prescription drugs available to all Americans.”

Buttigieg’s drug pricing plan is the latest sign that while Democrats differ dramatically in their vision for the American health insurance landscape, they are far closer together in their willingness to take on the pharmaceutical industry. While Buttigieg has sought a middle ground on health coverage via his “Medicare for all who want it” proposal, his drug pricing plan displays an appetite for aggressive drug industry reforms on par with that of candidates like Sens. Bernie Sanders (Vt.) and Elizabeth Warren (Mass.).

Buttigieg’s plan for negotiating the price of drugs is very similar to a high-profile plan released by House Speaker Nancy Pelosi last month. Both would direct the HHS secretary to negotiate lower prices for expensive drugs and would penalize drug companies with rapidly escalating taxes if they couldn’t agree with the federal government on a price. As under Pelosi’s plan, a drug company that refused to comply could face a tax on the drug’s revenues beginning at 65% and escalating to 95% with continued noncompliance.

Perhaps most striking about Buttigieg’s plan is his embrace of so-called “march-in rights” — an idea to empower the government to approve generic drugs in situations when the brand drug maker still has a valid patent, citing the same law Pelosi forebodingly referenced in a summer 2018 meeting with the lobbying group PhRMA. The idea has been embraced by the progressive wing of the Democratic party, but is still controversial among more pro-business Democrats.

“For ‘worst offender’ pharmaceutical companies that continue to price in a way that harms patients due to unaffordability, when attempts at direct negotiation are rebuffed, and in cases of national emergency related to either a natural disaster or a public health emergency, Pete will judiciously exercise these rights,” the plan states.

In a seeming recognition that the government has been unwilling to use these rights previously, Buttigieg also pledges to appoint an attorney general “willing and able to defend these rights.”

While the plan hits the drug industry hardest, other industries aren’t spared either: Buttigieg pledges to require that drug industry middlemen, for example, report a slew of currently secret information to the federal government, including the amount of rebates they receive from drug makers.

Buttigieg’s plan is also among the most detailed of any presidential candidate to date. In addition to big-picture ideas like negotiating drug prices, it includes smaller policy changes like including generic and biosimilar drugs on the lowest insurance formulary tiers, capping seniors’ out of pocket drug costs, and cracking down on pay-for-delay patent settlements.

Buttigieg’s plan is so wonky that it even gives a special shout out to the Netflix “subscription” model being piloted in Louisiana to pay for costly hepatitis C drugs, and details the national security risks associated with drug shortages.

The plan tackles drug research, too, albeit in its own way: Buttigieg pledges sustained investing in the Biomedical Advanced Research and Development Authority and the Army Futures Command, two largely unknown military-aligned research centers.

He also pledges increased funding for the Food and Drug Administration’s bioequivalence research, which examines the physiological differences between patients taking generic and brand drugs.