The H.R.3. Breakdown | Combat Patent Prices

Major Government Legislative Healthcare Reform Reintroduced in the House

With the Covid-19 crisis having made the faults in affordable access to healthcare in the U.S. more apparent than ever, the need to address issues regarding the current system has become increasingly necessary. One such attempt at doing so is with a renewed discussion on the H.R.3 - Elijah E. Cummings Lower Drug Costs Now Act of 2019. This bill was first drafted by Elijah E. Cummings in 2019 before he passed away in October of that year. On September 19th, 2019, the bill was introduced in the House of Representatives by its sponsor, rep. Frank J. Pallone Jr. From there, it was referred to the committees of Energy and Commerce, Ways and Means, and Education & Labor along with some other subcommittees. After multiple debates, revisions, and amendments, it moved on from the House of Representatives with 230 votes in support against 192 votes opposing the bill.

However, under the Trump presidency and republican senate, it stagnated and has not made any further progress in the legislative process outside of two hearings in 2020. In 2021, the bill was reintroduced in the House of Representatives again by the Energy and Commerce Committee Chairman Frank Pallone Jr, Ways and Means Committee Chairman Richard E. Neal, and Education and Labor Committee Chairman Robert C. "Bobby" Scott on April 22, 2021. Under the Biden Administration with a majority democrat house and barely majority democratic senate, new hopes for this bill’s enactment has risen with talks of this bill being revived under a democrat dominant government.

What Does This Bill Do?

According to the congress summary of the Lower Drug Costs Now Act, this bill, “establishes several programs and requirements relating to the prices of prescription drugs, health care coverage and costs, and public health”. Here is a summary of its 8 provisions:

Title 1 (Lowering Prices Through Fair Drug Price Negotiation):

“Requires the Department of Health and Human Services (HSS) to negotiate prices for certain drugs”. This is something the current HHS does not have the power to do under Medicare part D (drug Medicare coverage).
By 2023, at least 25 single sourced brand-name (patented) drugs among the 125 drugs that contribute the most to national spending under Medicare must have maximum prices negotiated by the HHS. By 2024, this number must be at least 50.
All newly patented drugs whose costs meet or exceed a set price value or are evaluated to place in the top 125 drugs that make up most of the national spending for medicare will have their prices negotiated by the HHS.
These negotiated prices must be used under Medicare and Medicare Advantage as well as private health insurance unless the insurer chooses to opt out.
The negotiated price cannot exceed 120 % of the average price in Australia, Canada, France, Germany, Japan, and the UK. If such data is not available, then it cannot exceed 85 % of the U.S. average manufacturer price. Failure to comply will result in civil and tax penalties.

Title 2 (Parts B and D Prescription Drug Inflation Rebates):

In addition to civil and tax penalties, drug manufacturers that violate such pricing negotiations must issue rebates (give money back) to the Centers for Medicare & Medicaid Services for drugs covered under Medicare that cost $100 or more and for prices that increase faster than inflation.

Title 3 (D Improvements and Maximum Out-of-Pocket Cap for Medicare Beneficiaries):

Reduces annual deductible thresholds (amount paid out-of-pocket before medicare begins to pay) and eliminates beneficiary cost-sharing (deductible paid based on the price of the drug) above this threshold. Under current Medicare legislation, there is no cap for the deductible being paid for drug medication, meaning that for more expensive prescriptions, the deductible being paid can be very expensive and defeats the point of the affordable healthcare program. Finally, for prescription drug plans, certain coinsurance payments (the percentage of the drug price not covered by Medicare) must be allowed to be paid in periodic intervals based on CMS guidelines.

Title 4 (Drug Price Transparency):

Drug manufacturers must give specific information for drugs that cost $100 or more and are covered by Medicare/Medicaid when they raise drug prices or when spending increases for it. Such information must be given as a report to the HHS and be publicly published when the price change goes into effect.

Title 5: (Program Improvements for Medicare Low-Income Beneficiaries)

Expands eligibility for certain premium and cost-sharing payments for low-income recipients under Medicare by raising the max qualifying income, allowing some residents of U.S. territories to automatically qualify, and others.

Title 6 (Providing for Dental, Vision, and Hearing Coverage Under the Medicare Program):

Expands Medicare coverage to dentures, dental and oral health services, basic and major treatments, specialized preventive and screening services, hearing aids, hearing rehab and treatment services, and eyeglasses, contact lenses, and vision services like eye examinations and contact lens fittings.

Title 7 (NIH, FDA, and Opioid Funding):

Provides funds for innovation projects at the National Institutes of Health and the Food and Drug Administration. In addition, an Opioid Epidemic Response Fund to support HHS programs and initiatives.

Title 8 (Miscellaneous):

Establishes and revises other health care programs and specifications.

In the end, while this bill has major potential to decrease government spending under Medicare for drug-related expenses as well as passing much-needed reforms regarding Medicare and its uses, it remains to be seen whether the current senate will take this bill on in its current form. However, perhaps under the new presidential administration and senate, they may be more open to considering this bill.