Drug Policy Projections Leading up to 2020

The only certainty when it comes to drug pricing is that there will be changes. The extent of those changes, however, are unknown and will be in large part influenced by effective messaging interest groups execute in the months leading to the 2020 elections. As health care was one of the most considered issues in the midterm elections, politicians on both side of the aisle will feel mounting pressure to deliver tangible drug-pricing victories for their constituents. Addressing the rising costs of prescription drugs is considered low hanging fruit that has bipartisan support. Some people think that Congress might not pass legislation, as this could be considered a win for President Trump to boast while he runs for reelections. However, blocking such changes would also be detrimental to the Democratic party in House and Senate races. Additionally, despite the changes already put in place, multiple sources project that there will be more drug price increases to come. Thus, the question is not if there will be change, the real question is what will change in the drug pricing market in the time leading up to the 2020 elections.

President Trump ran with a promise to fix health care; one thing he vowed to make better is drug pricing. About one year ago, the Trump administration publicized its drug pricing blueprint, a detailed directive that laid out ways in which the administration intends to lower prescription drug costs for constituents. ACG is astutely monitoring administrative rulemaking proceedings regarding drug pricing. Our services include monitoring, drafting comments to be formally submitted to administrations, speaking with members of administrative offices to personally detail our client’s messages and more. We have been dialed into Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS),  and the Food and Drug Administration (FDA), often physically attending panels around Washington, D.C. in which these administration’s leaders speak. Some proposals that HHS has put forward address list pricing, removing some already established safe harbors and establishing now safe harbors that protect point-of-sale discounts. Comments on this rule are still open and are predicted to stay open until June 2019. HHS projects that the rule will be finalized on January 1, 2020. CMS has also been active in the rulemaking process to propel the Trump administration’s blueprint objectives forward. For example, CMS just finalized a rule that tweaks Medicare Advantage and Part D payment and policies to increase market competition and individual coverage. Similarly, the FDA is working to increase market competition by bringing more generics to market and facilitating a fast-track for generic drug approval.

On Capitol Hill, the Senate and House have also been tuned in to the issue of drug pricing. In the past four months, there have been multiple drug pricing hearings that have ranged from more probative hearings to markups of drug pricing legislation. CEOs from big pharmaceuticals have been under fire in Senate and House hearings. In these hearings, legislators inquired about a potential compromise in the CREATES act, the extent of pharmaceutical expenditures in research and development about marketing expenditures, and the misuse of the patent system for manufacturers to maintain a monopoly on drugs to the exclusion of generics entering the market. While it is certain that there is a divided Congress and that partisanship has been at times crippling for progress, this is one area in which there is momentum for change and collaboration. There is particular promise because many of the major players are committed to seeing change, and there is a health care vehicle for legislation to pass this fall leading up to elections.

Senate Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) considers reducing redundant health care costs an imperative part of his legacy. As he is set to retire at the end of this term, Alexander will work diligently with Ranking Member Patty Murray (D-WA) and the Senate Finance Committee leadership to advance legislation. On the House side, there have already been over a half a dozen bills that have passed Committee and have been sent to the House floor for a vote. While timing cannot be certain, some project that the House drug pricing legislation will be passed sometime this summer and the Senate’s package will be ready this fall. The question here will be whether both chambers, under different leadership, we find enough common ground to pass drug pricing legislation. ACG has been dialed in with our connections in the pertinent committees, providing avenues for our clients to offer their feedback and offer comments on proposed legislation. We use our bicameral, bipartisan team to cover all bases for messaging and secure diverse signors on stakeholder legislation.

Certainly, many factors will go into drug pricing legislation and administrative rulemaking proceedings in the months to come leading to the 2020 elections. From keeping you apprised of the most recent, relevant insider news, to using our connections to garner high-level meetings with the leadership, ACG has been a proven resource for health care clients for a quarter century. If there is any way that we can enhance your understanding of the drug pricing landscape or help advocate for or against policy changes that affect your business, please do not hesitate to reach out.