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Senate advances drug pricing bill, setting up September vote

  • Legislation limiting drug price increases in Medicare will face a full Senate debate in September after the Finance Committee approved it on a mixed vote Thursday.
  • The bill could see some modification before then to incorporate additional proposals, potentially including a ban on rebates to payers. In addition, House Democrats are working on a plan, and the White House is reported to be working on a broad executive order.
  • The pharmaceutical industry is opposing the Senate bill, saying it would impose price controls and divert industry money from research & development. Stephen Ubl, head of drug lobby PhRMA, and a number of drugmaker executives met with President Trump on Wednesday to lay out their opposition to the legislation. 

The failure of the Trump administration’s executive efforts to control drug prices has kicked Congress into high gear. Two days after its Republican and Democratic leaders introduced a bill focused on Medicare drug reimbursement, the Senate Finance Committee voted to send it to the full Senate for an expected debate and vote in September.

The legislation emerged from the Republican-controlled panel thanks to its Democratic minority, as nine of the 15 Republicans voted against advancing it. The mixed vote signals the need for sponsors to keep members of both parties on board in order to achieve passage, which will be a delicate balancing act as the full chamber begins debate.

Moreover, a host of other legislation is under development, including bills in two other Senate committees, and will contain proposals that lawmakers will want to incorporate into a final bill to send to the White House. House Speaker Nancy Pelosi, D-Calif., is preparing legislation to present to the House in September as well. 

Among the changes could be resurrection of the scuttled Medicare rebate ban, which Finance Committee Chairman Chuck Grassley, R-Iowa, and senior Democrat Ron Wyden, D-Ore., said they’re interested in including in a final Senate bill. President Donald Trump sought to do that through regulation, but a congressionally passed ban would lend greater legal authority for the administration to impose one.

Another change that could occur is stripping the bill of an “inflation cap” on Medicare reimbursement for pharmacy-dispensed drugs. This provision would mandate rebates to Medicare if drug prices rise above the rate of inflation, and is chief among the reasons pharma’s trade lobby is opposing the bill.

A committee amendment to strip that provision failed on a 14-14 vote. Cowen analyst Rick Weissenstein wrote in a note to clients that this level of support means it could return as an amendment during debate by the full Senate.

Meanwhile, Reuters reported that Trump is considering an executive order that would cut prices on branded drugs taken by beneficiaries in Medicare and other federal health programs, although the specifics of that order are not clear.