Health Reform Bill Picks Up Key Pharma Measures: Part D Price Negotiation, HHS Formulary For The Public Plan

Rx provisions added to House Energy and Commerce Committee-approved bill July 31.

The House Energy and Commerce Committee made a number of changes during markup of the America's Affordable Health Choices Act that will affect the pharmaceutical industry.

While the pharmaceutical industry has supported health reform, it has not endorsed this particular measure due to a number of provisions on drug pricing and discounts already in the bill that would have a negative impact on manufacturers (Also see "House Bill Would Expand Rx Market, But Negatives Draw PhRMA's Protest" - Pink Sheet, 20 Jul, 2009.). The Energy and Commerce panel cleared the overall measure July 31.

Drug-Related Amendments

Several amendments of interest to the pharmaceutical industry were added during the mark up July 31:

• An amendment by Rep. Jan Schakowsky, D-Ill., to allow HHS to negotiate drug prices for Medicare Part D.

• An amendment by Rep. Tammy Baldwin, D-Wisc., that would require HHS to establish a formulary for the public health insurance plan and would create transparency rules for pharmacy benefit managers that contract with qualified health benefits plans.

• An amendment by Rep. Bobby Rush, D-Ill., prohibiting settlements of patent infringement claims where the ANDA filer receives anything of value and agrees to forego marketing the product. The amendment is similar to H.R. 1706, which was previously marked up by a House subcommittee.

• An amendment by Rep. Anna Eshoo, D-Calif., to create a regulatory pathway to approve follow-on biologics. The amendment is nearly identical to legislation by Sen. Ted Kennedy, D-Mass., that passed the Senate HELP Committee (see related story).. Chairman Henry Waxman, D-Calif., voted against the amendment.

• An amendment by Rep. Doris Matsui, D-Calif., to exclude customary prompt pay discounts extended to wholesalers from the calculation of manufacturers' average sales price used to pay for drugs and biologicals under Medicare Part B.

Comparative Effectiveness Research Changes

In addition, two amendments strengthen the language related to use of results from comparative effectiveness research, another area of interest to the pharmaceutical industry.

The bill would establish the center within the Agency for Healthcare Research and Quality to conduct, support and synthesize research on the outcomes, effectiveness and appropriateness of various health care treatments, including prescription drugs. An independent CER commission would be formed to oversee the center, recommend research priorities and conduct stakeholder outreach.

One amendment, sponsored by Rep. Mike Rogers, R-Mich., states that "in no case may any research conducted, supported or developed by the Center for Comparative Effectiveness Research, the Comparative Effectiveness Research Commission, or the Federal Coordinating Council for Comparative Effectiveness Research be used by the federal government to deny or ration care."

The Federal Coordinating Council on CER already exists; it was established by the American Recovery and Reinvestment Act to promote and direct federal CE research.

The amendment was opposed by committee Chairman Henry Waxman, D-Calif., but was approved by the full panel in a voice vote.

The second amendment, offered by Rep. Phil Gingrey, R-Ga., who is a physician, states that "the Centers for Medicare and Medicaid Services may not use federally funded clinical comparative effectiveness research data under this section to make coverage determinations for medical treatments, services, or items … on the basis of cost." Waxman supported the amendment, which passed the committee in a voice vote.

The reform bill, H.R. 3200, previously cleared the Ways and Means Committee and the Education and Labor Committee on July 17. In the Senate, a bill has cleared the HELP Committee, but the Finance Committee has yet to complete its bipartisan effort to write legislation.

- Scott Steinke ([email protected] )