White House Wants To Avoid Fight On Rebates, Get Quick Passage Of Senate Rx Pricing Bill
Executive Summary
“We’re out of time for ideas," Domestic Policy Council Director Joe Grogan says. Trump administration is pushing hard to get the Senate drug pricing bill through Congress quickly and score a major victory for the President.
The White House opposes adding a provision requiring point-of-sale rebates in Medicare Part D to the prescription drug pricing bill sponsored by Sens. Chuck Grassley, R-IA, and Ron Wyden, D-OR, because it could delay the legislation’s progress, Domestic Policy Council Director Joe Grogan told reporters at an 8 November briefing.
“We’re out of time for ideas. If somebody’s got a rebate idea, that train left the station,” Grogan emphasized. “We need solutions right here, right now. This package needs to be wrapped up in the next few weeks.” Drug pricing is among the few “major legislative agendas” for the White House “as we close out the year,” he explained.
Grassley pledged to work on getting the point-of-sale (POS) rebate provision included in the legislation when it was marked up and passed by the Senate Finance Committee in July. (Also see "Point-Of-Sale Rebates May Be Added To US Senate Finance Drug Pricing Bill" - Pink Sheet, 25 Jul, 2019.) However, he indicated at a recent meeting with reporters that he may be backing away from adding the policy to his bill in the interest of time.
“If someone has an easy legislative solution for the rebate problem, I’m all ears. But I don’t think we’re going to get there.”
The POS rebate policy has been strongly supported by biopharma but its adoption has been complicated by concerns it could cause premiums to increase.
Grogan is a “skeptic” about rebate reforms because getting the policy right “is really hard,” he explained. The Administration “probably spent more man hours on rebates than any other particular issue in health care, to be honest with you. ... If someone has an easy legislative solution for the rebate problem, I’m all ears. But I don’t think we’re going to get there.”
The Administration issued a proposed rule that would have eliminated rebates in Part D earlier this year but then decided against proceeding with the final rule because of predictions it could be wildly costly to the federal government and raise premiums for seniors. (Also see "Pharma's Big Defeat: US Rebate Proposal Hits The End Of The Road" - Pink Sheet, 11 Jul, 2019.)
The White House is supportive of less significant tweaks to the Grassley-Wyden bill such as redirecting the savings generated in Part D back into the benefit, Grogan said. That way, “you get more bang for the buck and it’s a bigger win for seniors.” The White House is also working to ensure “it’s solid numerically so that you don’t get unintended consequences on premiums,” he added.
Support For Price Inflation Rebates
Grogan said the controversial drug price inflation rebates in the bill did not originate with the Administration but that he recognizes the policy is important for getting and retaining Democrats’ support. “They are the product of a bipartisan compromise and they are the route to a bipartisan bill, in our opinion,” he said.
The statement refines earlier remarks by Grogan suggesting the White House thinks the inflation rebates should be removed from the bill because some Republicans are uncomfortable with it. The provision would require manufacturers to provide rebates to Medicare if their prices increase faster than inflation. Grassley is standing by his support for the provision. (Also see "Drug Pricing Bill: Senate Sponsors ‘Not Backing Down’ From Inflation Rebates" - Pink Sheet, 6 Nov, 2019.)
Although Republican opposition may ultimately prevent success, the White House is pushing hard to get the Grassley-Wyden bill through Congress because the President wants a significant win on drug pricing.
The Administration has two major regulatory policies on tap. One would lower drug prices in the US by implementing international reference pricing and the other would allow for government-sanctioned importation of cheaper drugs from abroad. Both face significant obstacles to implementation. (Also see "US Drug Importation: Hard To See Path Forward, Former HHS Adviser Says" - Pink Sheet, 5 Nov, 2019.)
That explains the White House focus on the Grassley-Wyden bill. “This is an issue that both Republicans and Democrats should be able to come together on and get done,” Grogan maintained.
“Unfortunately, there are some current complications on that front,” he acknowledged. But “I think everything is set up to do it. This is the right President to do it. This is a once-in-a-generation opportunity to confront these issues in a non-ideological fashion. We’ve spent … a ton of bandwidth pushing up policies to rationalize our system, protect patients and align the incentives” on drug pricing. And “I think it’s in everyone’s best interest to get a deal done.”