DPL Policy Tracker
The DPL Policy Tracker keeps tabs on federal policy proposals to address US drug pricing issues. To begin, select filter options for proposed solutions.
Close the Orphan Drug Act loophole
Revise the Orphan Drug Act by promoting agreements between the U.S. Department of Health and Human Services and pharmaceutical companies to negotiate launch prices and price increases.
Expand authority of HHS to provide increased oversight and regulation of 340B assuring that participation is consistent with the intent of the program. Oversight can include systematic data collection and assessment regarding the volume of purchases through the program, revenues generated and safety-net services funded through revenues.
Improve targeting of 340B
Modify the 340B drug discount program to reward hospitals that provide significant charity care and reducing payment through the program to hospitals that provide little charity care.
Require hospitals to provide information of drug acquisition costs for 340B drugs along with information on the hospital's revenues received for such drugs.
Importation / Re‑importation
Enable reimportation (made in USA) or importation (made overseas)
Loosen restrictions on re-importation to allow individuals, hospitals and other providers to purchase drugs in other countries that were either: a) manufactured in the U.S., or b) manufactured in another country that meets or exceeds U.S. safety standards (to be assessed by the FDA) for drug manufacturing.
Allow importation of drugs from abroad for personal use.
Allow re-importation of drugs with a highly controlled supply chain, limited to countries that meet the US FDA standards of quality and safety.
Amend the Federal Food, Drug, and Cosmetic Act to allow personal importation of safe and affordable drugs from approved pharmacies in Canada (Safe and Affordable Drugs from Canada Act).
Allow individuals, pharmacists, and wholesalers to import prescription drugs from licensed Canadian pharmacies (Prescription Drug Affordability Act).
Allow wholesalers, licensed U.S. pharmacies, and individuals to import qualifying prescription drugs manufactured at FDA-inspected facilities from licensed Canadian sellers and, after two years, from OECD countries that meet standards comparable to U.S. standards. Imported drugs must have the same active ingredient, route of administration, and strength as drugs approved in the U.S., and the Secretary has suspension authority when sellers do not meet standards. FDA-certified foreign sellers must comply with criteria including requiring a valid prescription for sale to individuals and a requirement to transmit product tracing and transaction history information to U.S. importers. The Secretary and GAO must report on the implementation of the Act (Improving Access To Affordable Prescription Drugs Act).
Allow for importation of prescription drugs in the case of noncompetitive drug markets or drug shortages (Pharmaceutical Supply and Value Enhancement Act).
Introduce regulation that allows wholesalers, pharmacies, and individuals to import prescription drugs from a list of certified foreign sellers, published on a dedicated website, and permit importation from OECD countries with standards for approval and sale of prescription drugs comparable to those in the United States (Affordable and Safe Prescription Drug Importation Act).
Allow individual importation of qualifying prescription drugs from Canada or another licensed foreign pharmacy (Affordable and Safe Prescription Drug Importation Act).
Allow importation by persons other than a drug's manufacturer if the drug has the same active ingredients, route of administration, and strength as an approved drug, is imported or re-imported from a qualified country in which it is lawfully marketed, is dispensed by a licensed pharmacist, is shipped directly to, or is imported by, the ultimate consumer, in quantities that do not exceed a 90-day supply, is accompanied by a copy of a valid prescription, and is not a controlled substance (Personal Drug Importation Fairness Act of 2017).
Encourage long-term contracts from wholesalers
Create a generics futures market
Create a single pathway for approving generic drugs between the EU and US.
Require the Food and Drug Administration (FDA) to quickly review drug, device, and biologic applications from sponsors who have products approved and sold in developed and trustworthy countries (RESULTS Act).
Remove barriers and create incentives for generic entry
Rather than allow unlimited entry into a market, the US Food and Drug Administration (FDA) could offer a limited set of licenses to suppliers for a given generic drug. The number of licenses could be based on the size of the market, the complexity of the product, or other factors that make a given molecule more subject to possible shortages or price fluctuations. As with spectrum auctions, in which the Federal Communications Commission allocates certain bandwidths to telecommunications companies, the FDA could use generics license auctions to allocate a predetermined number of licenses.
Research bureaucracy and burdens to eliminate unnecessary steps that increase costs, delay timelines, and shorten drug patent times.
Promote and sustain competition by reducing the economic incentives for companies to exit the market (low prices in generics) and reduce the regulatory barriers to entry, particularly in generic-drug markets with very limited existing competition.
Regularly publish lists of older medicines without generic competitors to lure generic companies into the market.
Require FDA to prioritize review of applications where there is no generic option available or in instances of a drug shortage.
Reward generic manufacturers who alleviate supply issues with Priority Review Vouchers.
Create an exemption to the Medicaid Additional Rebate Requirement, which requires manufacturers to pay rebates to Medicaid if price increases more rapidly than inflation, for generic drugs.
Provide FDA with necessary resources to clear backlog and prioritize ANDAs.
Accelerate generic-drug approvals by reducing the backlog of applications at the agency.
Ease into the market generic versions of “complex” drugs that are no longer patent-protected and lack generic competition.
Allocate greater resources at the FDA for reviewing generic drug applications to facilitate competition.
Require the FDA to expedite the review of second generics and make a final decision within 150 days of receiving these Priority Review Abbreviated New Drug Applications (SAVINGS Act).
Prohibit a company that holds the patent for a brand-name pharmaceutical product from also introducing an authorized generic (Eliminate Price Increases Act).
Amend the Federal Food, Drug, and Cosmetic Act to ensure that eligible product developers have competitive access to approved drugs and licensed biological products, so as to enable eligible product developers to develop and test new products, and for other purposes (Fair Access for Safe and Timely Generics Act of 2015).
Amend the Public Health Service Act to shorten the exclusivity period for brand name biological products from 12 to 7 years (PRICED Act).
Make it illegal for brand-name and generic drug manufacturers to enter into agreements in which the brand-name drug manufacturer pays the generic manufacturer to keep more affordable generic equivalents off the market. Take away 180 day exclusivity period for generic manufacturers entering into such an agreement (Improving Access to Affordable Prescription Drugs Act).
Allow for the expedited approval of generic prescription drugs and temporary importation of prescription drugs in the case of noncompetitive drug markets and drug shortages (Short on Competition Act).
Enable FDA to incentivize generic competition by awarding manufacturers that enter sole-source market or prioritizing review of drugs that are second or third entrants into generic markets.
Eliminate provisions of the Hatch-Waxman Act that delay generic introduction.
Prioritize the review of, and act within 240 calendar days of the date of the submission of, an original abbreviated new drug application submitted for review under this subsection, or on a supplement to such an application, that is for a drug for which there are not more than 3 approved drugs listed (Making Pharmaceutical Markets More Competitive Act).
Authorize the Federal Trade Commission to initiate proceedings against parties to any agreement that resolves or settles a patent infringement claim in connection with the sale of a drug. (Preserve Access to Affordable Generics Act).
Require brand name manufacturers and generic manufacturers to submit to the Federal Trade Commission any other agreements the parties enter into within 30 days of entering into an agreement related to the manufacturing, marketing, sale, or exclusivity period of a drug (Preserve Access to Affordable Generics Act).
Revise provisions for the FDA to prioritize review of generic drug applications allowing for expedited inspection.
Deter pharmaceutical manufacturers from being able to pay other manufacturers for delayed generic and biosimilar market entry.
Identify specific means to reduce patent "evergreening" (ie. Applying for new patents or extending existing ones).
Authorize the FDA to arrange drug approval agreements with international regulatory agencies for generic and biosimilar drugs, such as agencies operating in the EU, Australia, Canada, Japan and New Zealand.
Reduce barriers to generic market entry and encourage the expedited entry of generics and biosimilars through domestic and international manufacturers of the follow-on drug.
Restrict the use of "dispense as written" practice used by prescribers to impede use of generics and biosimilars.
Give FDA greater ability to bring generic drugs to market quicker by granting power to approve a subsequently filed generic application for 180-day exclusivity when the first-to-file is not yet approved due to deficiencies.
Modify IP environment
Preserve legal avenues for patent challenges, such as IPR, and work on new ways to balance IP and competition while accelerating access to affordable medicines.
Deny patents for products that are simply modifications of existing products unless the new product offers significant improvements in clinical effectiveness, cost savings, access or safety.
Prohibit anti-competitive arrangements between brand and generic drug makers where the brand name drug manufacturers pays the generic manufacturer to delay bringing their generic alternative to market (Prescription Drug Affordability Act).
Modify the New Chemical Entity (NCE) exclusivity period to allow generic drug application for the branded product after three years rather than five, but maintain market exclusivity for five years. Add a requirement that products awarded the 3-year New Clinical Investigation Exclusivity must show significant clinical benefit over existing therapies manufactured by the applicant in the 5-year period preceding the submission of the application. Reduce the biological product exclusivity from 12 years to 7 years. Direct GAO to conduct a study on orphan drug development, awarding of exclusivities, and revenues generated from orphan drugs (Improving Access to Affordable Prescription Drugs Act).
Limit anticompetitive behavior by pharmaceutical companies attempting to reduce competition from generic manufacturers through manipulation of patent protections and abuse of regulatory exclusivity incentives.
Disqualify from being a “first applicant” (which grants 180 days of market exclusivity) any applicant that has entered into a “pay for delay” agreement (FAIR Generics Act).
Prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market.
Limit secondary patents for trivial changes of a patented molecule (e.g., heightening patenting standards to require showing enhanced safety or effectiveness over previously patented version of the molecule).
Aggressively police anticompetitive business practices (e.g., pay for delay, product hopping).
Prohibit pharmaceutical manufacturers from extending market exclusivity protections by requiring federal agencies to monitor and prosecute anti-competitive pricing schemes if violations of antitrust laws are found.
Direct courts to apply additional legal requirements as part of the patent infringement process (Innovation Act).
Alter patent protections and exclusivities for greater market competition earlier. Explore potential of tying market exclusivity to the return on investment in research and development.
Clarify federal law to prohibit pay-for-delay and product-hopping.
Establish policies that require the demonstration of originality of drug for new patent applicants; bolster the patent review system to give opposing competitors an increased role in process; and extend the window for validity challenge.
Bolster supply of drugs at risk of shortage
In the event of a shortage of manufacturers, accelerate review of drug applications and authorize temporary drug importation from well-regulated pharmaceutical markets.
Require the HHS Secretary to maintain a public, up-to date list of generic drugs and their manufacturers (including distributors, labelers, and compounders) to more quickly identify drugs at risk of shortage or drugs with a limited number of competitors (Improving Access to Affordable Prescription Drugs Act).
Create a new “generic priority review voucher” that would be awarded to the sponsor of a successful application for a medical shortage or sole-source drug that makes it to market (Increasing Competition in Pharmaceuticals Act).
Allow for expedited approval for generic prescription drugs in case of noncompetitive drug markets or drug shortages (Pharmaceutical Supply and Value Enhancement Act).
Ensure access to samples for generic development
Curb misuse of REMS to block access to samples of brand drugs.
Allow FDA intervention when brand-name drug companies are accused of using FDA safety rules to refuse to make drug samples available to generic manufacturers.
Amend the Federal Food, Drug, and Cosmetic Act to ensure that eligible product developers have competitive access to approved drugs and licensed biological products (FAST Act).
Allow the sponsor of an ANDA, a 505(b)(2) NDA, or a biosimilar application to bring an action in federal court to obtain from the brand-name sponsor of a drug or biological product subject to restricted distribution (and that is not in shortage) – either under an ETASU REMS or under a self-imposed restricted distribution system – the sample it needs to conduct testing to seek approval of a generic drug or biosimilar biological product (CREATES Act).
Require FDA to evaluate the use of REMS and issue a report on its findings, including whether manufacturers are using REMS protections to inhibit generic manufacturer access to samples and develop recommendations for increased oversight and enforcement.
Mandate brand-name drug sample sharing with generic manufacturers.
Encourage uptake of generics and biosimilars
Encourage market entry and uptake of biosimilars.
Require Medicare to encourage greater use of biosimilars by assigning approved biosimilars to the same code as the brand-name biologic.
Promulgate product-specific guidance on demonstrating interchangeability with greater guidance from the FDA about what levels of similarity will be required to obtain approval via the new Biologics Price Competition and Innovation Act pathway.
Require the use of a common billing code to pay for a reference biologic and its biosimilars.
Modify Part D to encourage the use of generic medicines in the low income subsidy program, which accounts for 40% of all Part D spending.
Prevent single-source generic monopolies
Encourage branded competition
Reduce drug monopolies by incentivizing competition for additional market entrants where no competitors exist in a manner similar to current FDA programs with expedited review of new drugs that address unmet medical needs for serious or life-threatening conditions.
Require FDA to utilize multi-stakeholder groups (such as the Sensible Guidelines group, the IOM Forum on Drug Discovery, Development and Translation, and the Clinical Trials Transformation Initiative (CTTI)) to streamline the clinical trial process and adapt to the changing business environment.
Impose a “grant-and-access pathway” in which drug developers could opt to compete for federal grants to subsidize the cost for clinical testing.
Terminate any period of exclusivity granted to a person convicted of, or settling for, fraud or violation including off-label promotion, kickbacks, or anti-competitive practices (Prescription Drug Affordability Act).
Provide aligned incentives for US FDA implementation, such as vouchers that incentivize competition and expedited-review pathways.
Ensure proactive government monitoring and oversight of competition in pharmaceutical markets.
Out of Pocket Costs
Lower out of pocket costs
Transition Medicare’s individual reinsurance subsidy from 80 percent to 20 percent while maintaining Medicare’s overall 74.5 percent subsidy of basic benefits.
Require the secretary of Health and Human Services to include monthly out-of pocket limits with a separate, smaller deductible for prescription drugs for all silver-level marketplace plans, and grant insurer greater flexibility in designing formularies.
Require CMS to implement requirements for the federal marketplace similar to the Part D PlanFinder that allows people to compare plans’ cost sharing and coverage for specific drugs through an online tool.
Grant providers access to patients’ cost sharing information as part of e-prescribing system so they can consider specific formulary and out of pocket costs when making prescribing decisions.
Direct CMS to modify plan designs offered through Medicare Part D and health insurance exchanges to limit out of pocket costs when it can be shown to reduce overall cost of care.
Eliminate cost-sharing for generic drugs for beneficiaries who receive low-income subsidy.
Cap out of pocket costs
Create a new Part D out-of-pocket spending cap.
Establish limits on the total out of pocket costs paid by enrollees in Medicare Part D plans that cover prescription drugs by removing the cost-sharing requirement for patients who reach the catastrophic limit.
Prevent catastrophic out-of-pocket spending on prescription drugs for seniors and individuals with disabilities, capping spending at $7,500 for Part D beneficiaries (Rx CAP Act).
Eliminate enrollee cost sharing above the out-of-pocket threshold.
Limit prescription drug spending to $3250 annually and $250 monthly for individuals with employer-sponsored insurance.
For plan years beginning in 2019 and later, cap prescription drug cost sharing at $250 per month for individuals and $500 a month for families enrolled in Qualified Health Plans and employer-based plans (Improving Access to Affordable Prescription Drugs Act).
Close Medicare Part D coverage gap
Prohibit patient coupon programs from manufacturers to consumers for prescriptions, except in programs where no competing drug is available.
Close the Medicare Part D prescription coverage gap in 2018, two years earlier than under current law to expedite financial relief for seniors, and require drug manufacturers to pay a larger share of the costs during the coverage gap (Improving Access to Affordable Prescription Drugs Act).
Close the Medicare Part D donut hole for brand and generic drugs by 2017, three years earlier than under current law (Prescription Drug Affordability Act).
Establish medical-pharmacy cost parity
Establish site neutral payment policies that do not differentiate for the site of care.
Amend the Public Health Service Act to require group and individual health insurance coverage and group health plans to provide for cost sharing for oral anticancer drugs on terms no less favorable than the cost sharing provided for anticancer medications administered by a health care provider (Cancer Drug Parity Act of 2017).
Share POS rebates
Improve patient access to copay programs
Prohibit drug manufacturers from using copay cards as a patient inducement tool.
Prevent manufacturers from discriminating against patients who cannot document their financial need, provide assistance for some medications but not others, or limit coupons to only a few prescription fills rather than the duration the patient needs the medication.
Improve access to copay programs via public registration, so patients and providers can identify them.
Eliminate manufacturers’ practices that obscure pricing process, such as copay coupons given to patients in commercial setting.
Mitigate inflationary effects of copay assistance
Shift cost to patient
Restrict Medigap plans from covering cost-sharing below a combined threshold and limit plans from covering no more than half the cost sharing between the deductible and out of pocket cap.
Ban DTC advertising
Ban DTC advertising.
Either ban DTC advertising, or use FDA to ensure clear and accurate information is presented.
Amend the Federal Food, Drug, and Cosmetic Act to restrict direct-to-consumer drug advertising (Responsibility in Drug Advertising Act).
Eliminate tax incentives for DTC advertising
Amend the Internal Revenue Code to deny a tax deduction for the cost of direct-to-consumer advertising of prescription drugs (Protecting Americans from Drug Marketing Act).
Remove tax breaks for drug promotion activities.
Disallow tax deductibility of DTC advertising as a business expense.
Enable oversight of DTC advertising
Professional societies should be involved in reducing the hype around new cancer drugs that do not have a major impact on patient outcomes.
Direct FDA to implement stricter rules around DTC advertising, specifically requiring additional critical information – such as drug list price for a common course of treatment (or annually in the case of drugs that manage ongoing, chronic conditions) and comparative effectiveness results.
Price and input transparency
Require manufacturers to submit as part of the drug approval process information on anticipated product pricing for both a single unit and a course of treatment; anticipated public spending on the product (e.g., from government purchasers including Medicare, Medicaid and TRICARE, among others); and information on how the product was priced, including anticipated portion of the product price that will contribute to current or future marketing and research and development costs. Drug manufacturers also would be required to provide information on the research that contributed to the development of the drug. Manufacturers would need to specify all entities that conducted research that contributed to the development of the drug, the amount spent on that research and the funding source.
Require drug manufacturers to disclose costs of research, development, manufacturing, marketing, and acquisitions, as well as federal investments, revenues and sales, and other factors that influence drug prices, by product, to the Secretary of the Department of Health and Human Services (HHS), to be made publicly available in a searchable format (Improving Access to Affordable Prescription Drugs Act).
Require pharmaceutical companies to publicly report information that affects drug pricing, including the total costs incurred for research and development and clinical trials, as well as the portion of drug development expenses offset by tax credits or paid by federal grants (Prescription Drug Affordability Act).
Support initiatives to provide transparency on drug prices.
Require pharmaceutical companies to disclose the total costs of R&D, production, sales and marketing budgets, along with the amount of their R&D budgets that is spent on basic research, as well as R&D efforts that have not resulted in any approved drugs.
Require manufacturers to disclose information on the estimated unit price for the product, the cost of a course of treatment and a projection of federal spending on the product.
Require drug companies to report not only the price information charged to federal payers, but also requires companies to submit prices, profits, and sale information in other countries in which those products are sold (Prescription Drug Affordability Act).
Require manufacturers to disclose true R&D costs funded by public, academic, or private entities.
Require transparency in drug pricing and price increases. A proposed example includes the federal government mandated requirement for manufacturers and PBMs to report information on rebates and prices paid.
Buttress existing transparency tools while studying the effects of additional manufacturer price and payer cost disclosures.
Oppose provisions in pharmacies' contracts with pharmacy benefit managers that prohibit pharmacists from disclosing that a patient's co-pay is more than the drug's cash price.
Require drug manufacturers to disclose the prices of prescription drugs in any direct-to-consumer advertising and marketing to practitioners of a drug.
Require entities that offer or furnish health care related products or services to the public to disclose the price for those products and services at the point of purchase or on the internet. The entities must disclose all prices, including wholesale, retail and discounted prices that are accepted as payment in full for products and services furnished to individual consumers.
Require disclosure of information on quarterly basis at the NDC level from: insurance plans about net prices paid for drugs (including patient cost sharing), biopharmaceutical companies about average net volume and prices for drugs across sales channel (including discounts).
Require biopharmaceutical companies to submit an annual report to be published publicly stating list price, rebate and discounts, and average net price of each drug sold in the U.S.
Expand disclosure requirements on all income sources by biopharmaceutical companies exempt from income tax.
Conduct rigorous post-approval surveillance of follow-on biologics to ensure the safety and effectiveness of these products.
Require research on long-term efficacy and side effects of a drug to continue, with specific timelines and reporting requirements after market entry.
Require manufacturers to report data for all trials that summarizes non-identifiable demographics and participant characteristics, primary and secondary outcome results, and adverse event information, even if a drug is not approved.
Direct CMS to specify when patient cost charing is calculated as a fraction of drug prices in insurance policies through Medicare Part D and health insurance exchanges.
Encourage transparency to allow informed policy choices
Require manufacturers to notify HHS and submit a report 30 days before raising price of certain products by more than 10%. The report should contain justification and costs for manufacturing, R&D, along with net profits, and marketing and advertising (FAIR Drug Pricing Act).
Require independent charity assistance programs to disclose to the IRS the total amount of patient assistance provided to patients who are prescribed drugs manufactured by any contributor to the independent charity assistance program.
Require a GAO study on the impact of patient assistance programs on prescription drug pricing and expenditures (Improving Access to Affordable Prescription Drugs Act).
Require HHS to provide an annual report to public to include top 50 price increases by branded/generic drugs; the top 50 drugs by annual spending and how much government pays in total for these drugs’ and historical price increases for common drugs.
Require PBMs to disclose their contractual relationships with drug manufacturers and pharmacies, including any rebate payments that flowed from drug manufacturers.
Establish standards for pharmacy benefits manager under the Medicare prescription drug program and Medicare Advantage program to further transparency of payment methodologies to pharmacies, and for other purposes (Prescription Drug Price Transparency Act).
Amend titles XI and XVIII of the Social Security Act to provide public disclosure of information on rebates, discounts, and price concessions with respect to an individual drug or an individual plan (C-THRU Act of 2017).
Require more information from manufacturers seeking orphan drug status, such as intention to pursue additional orphan drug indications, and drug utilization if already approved for other indications.
Leverage comparative evidence and cost
Continue federal funding for independent comparative effectiveness research (PCORI).
Increase funding for public and private research on drug pricing and value.
Consider comparative effectiveness in health insurance design (although not on the basis of cost alone).
Require generation and dissemination of information about the comparative clinical and economic value of drugs, possibly by leveraging PCORI.
Require the secretary of Health and Human Services to use a research-based, independent organization with adequate stakeholder participation—including insurers, providers, and patient representatives—to assess independently, industry-sponsored CER and to conduct additional, independent CER to supplement existing studies and evaluate added benefit compared to existing therapies.
Require drug companies to include this information in their labeling and marketing in the form of star ratings, allowing them to compare their treatment options.
Require drug manufacturers to submit to FDA a dossier of comparative effectiveness research as part of the drug approval process, something that already is required by other countries as part of their drug review and approval processes. FDA would make this information publicly available and would serve as a starting point for assessing the value of an individual drug.
Require manufacturers to submit CER studies.
In addition to statutory changes in Medicare, expansion of reference pricing or other value-based benefit-design policies will probably require the collection and dissemination of more and better evidence on comparative effectiveness.
Invest in comparative-effectiveness research.
Inform clinical choice
Enable Medicare Pay-for-Performance
Judiciously amend or reverse the laws that limit Medicare's flexibility with respect to cancer drugs, while moving rapidly toward the creation of a center for comparative effectiveness that could guide Medicare's actions.
Link the price of a drug with patient health outcome goals via an outcome-based agreement.
Enable Medicare to pay the high cost of drugs with uncertain benefits only if the new drugs turn out to be successful in treatment.
Enable value-based insurance design
Allow for value-based insurance design throughout Medicare Advantage.
Adopting value based insurance designs that alter coverage based on price, effectiveness, safety and other parameters.
Require CMS to include cost and clinical effectiveness of drugs when determining patient cost sharing rates.
Enable indication-specific pricing
Link price of drugs to effectiveness in each indication it is approved to treat.
Require CMS to use evidence from published studies and review to link price of drugs to their clinical effectiveness for their various indications.
Require manufacturers to vary rebates according to CER for each indication.
Develop pathways for value-based payment
Allow broad-based group representing cancer experts, PCORI, patients and their advocates, regulatory bodies, and pharmaceutical and insurance companies to review the new drugs for their cost and benefit after FDA approval and formulate pathways that incorporate costs and benefits of cancer drugs.
Vary patient cost-sharing for certain drugs based on value.
Ensure federal programs like Medicare and Medicaid can take advantage of recent developments in value-based, to benefit from market-based negotiating efforts to lower drug prices.
Require CMS to undertake a public, multi-stakeholder process to develop and test potential VBP models for drugs.
Clarify treatment of Value Based Purchasing initiatives.
Require Medicare and Medicaid programs to exempt value-based contracts that meet certain criteria from the requirement that the resulting prices, and the discounts, be used toward calculating Medicaid best price.
Issue regulation to clarify how drug makers, insurance plans, and health systems can rationalize value-based and indication-based contracts with their price reporting calculations.
Incentivize manufacturers to align package sizes with common dosage amounts while not requiring mandatory reductions.
Allow the U.S. Department of Health and Human Services to test and refine methods for determination of a drug's "value". Identify approaches to support value-based payments, formulary design and price negotiation with manufacturers.
Remove regulatory barriers to value-based pricing
Relax implementation of current price-setting constructs like the calculation for Medicaid best price, the ceiling price for the 340B program, and the reporting rules for Medicare’s Part B average sales price.
Require FDA to concede that commercial, contract-related communications constitute protected speech under the First Amendment and thus are not subject to the agency’s active regulation, or require Congress to establish safe harbors in legislation, rather than leaving it up to the FDA to stipulate these principals in non-binding guidance/regulation.
Require Office of the Inspector General to change its interpretation of anti-kickback rules to enable drug makers to provide discounts based on the clinical indications for which drugs are prescribed, as well as the outcomes they deliver.
Price Inflation Limiters
Implement inflation cap
Implement an inflation cap on the price of drugs under the Medicare program. Under Medicare Part B, such a cap could be operationalized through a manufacturer rebate to Medicare when the average sales price (ASP) for a drug increases faster than a specified inflation benchmark. A similar cap could be placed on increases in the prices of Part D drugs.
Require the HHS Office of the Inspector General (HHS OIG) to monitor changes in drug prices and take steps to prevent drug manufacturers from engaging in price gouging. If price of a drug increases beyond medical inflation, the manufacturer would be subject to a graduated excise tax that depends on the size of the price increase, with prior assessment of the extent to which the price increase was due to changes in a drug’s supply chain or for other justifiable reasons (Improving Access to Affordable Prescription Drugs Act).
Amend title XI of the Social Security Act to require drug manufacturers to submit justification of drug price increases within 60 days of determination of applicability of rule (SPIKE Act of 2017).
Establish an excise tax on certain prescription drugs which have been subject to a price spike (Stop Price Gouging Act).
Remove inflation penalty caps, increase penalties on drugs with the largest price hikes, and apply penalties to new drugs with launch prices far in excess of top sellers in the same class.
Establish price review board
Establish an Interagency Drug and Device Price Review Board to collect data on drug and device prices and manufacturing costs, and if necessary, take enforcement action against manufacturers that charge consumers excessive prices (Prescription Drugs Act).
Government as Purchaser
Allow Medicare Part D negotiation
Instruct the Secretary of HHS to negotiate drug prices under the Medicare Part D prescription drug program (Prescription Drug Affordability Act).
Allow Medicare to negotiate drug prices, including for Part D.
Allow Medicare to negotiate bulk discounts for Part D Prescriptions.
Require the Secretary of HHS to negotiate for the price of drugs covered by Medicare Part D that are either sole source drugs or biologics and are not manufactured by more than two drug manufacturers (FAIR Drug Pricing Act).
Allow the Secretary of HHS to negotiate with drug companies to lower prescription drug prices, and direct the Secretary to prioritize negotiations on specialty and other high-priced drugs. If, after a year, the Secretary and drug manufacturers fail to successfully negotiate a fair price, the Secretary will use the price that the Department of Veterans Affairs or other federal agencies that purchase prescription drugs use (Improving Access to Affordable Prescription Drugs Act).
Amend title XVIII of the Social Security Act to require the Secretary of Health and Human Services to negotiate lower covered part D drug prices on behalf of Medicare beneficiaries (Prescription Drug and Health Improvement Act of 2017).
Amend part D of title XVIII of the Social Security Act to require the Secretary of Health and Human Services to negotiate covered part D drug prices on behalf of Medicare beneficiaries (Medicare Prescription Drug Price Negotiation Act of 2017).
Create a voluntary Drug Value Program (DVP) with the following elements: Medicare contracts with a small number of private venders to negotiate prices for Part B products; Providers purchase all DVP products at the price negotiated by their selected DVP vendor; Medicare pays providers the DVP-negotiated price and pays vendors an administrative fee, with opportunities for shared-savings; Beneficiaries pay lower cost-sharing; Medicare payments under the DVP would not exceed 100 percent of ASP; and Vendors use tools including a formulary and, for products meeting selected criteria, binding arbitration.
Enable Medicare to negotiate drug prices for individual Part D plans and exclude coverage for expensive products that add limited clinical benefit; experiment with value-based drug pricing and rational prescribing reimbursement models for Medicare.
Allow the Secretary of Health and Human Services to negotiate prescription drug prices under Part D of the Medicare program by striking the subsection of the Social Security Act that prohibits interference by the Secretary in negotiations between manufacturers, pharmacies, and plan sponsors, as well as requirements for a particular formulary or price structure for reimbursing Part D drugs (Empowering Medicare Seniors to Negotiate Drug Prices Act of 2017).
Improve payer and PBM purchasing power
Aggregate purchasing power of payers and PBMs that offer a Medicare plan or plan through the marketplaces to negotiate and publish prices for specialty drugs.
Establish alternative government-purchasing projects for drugs that protect public health, such as medicine that prevent and limit the spread of serious infections.
Enable states to operate PBMs, which will broaden purchase and negotiation power, including Medicare and other state programs as negotiators.
Modernize and strengthen current ceiling price formulas to ensure that government payers are not paying more than commercial payers.
Increase inter- and intra-agency collaboration to consolidate federal and state negotiating power.
Allow the U.S. Department of Health and Human Services to negotiate prices with producers and suppliers of medicines, including negotiating on behalf of state agencies that elect to participate.
Authorize the U.S. Department of Health and Human Services, federal agencies and associated private payers to expand flexibility in formulary design, like selective exclusion of drugs when less costly drugs provide similar clinical benefit.
Expand demonstration projects to test alternative payment models and assess impact of models in outcomes and cost through the Centers for Medicare & Medicaid Services.
Improve government purchasing power
Authorize the federal government to enter into purchase contracts with generic drug manufacturers if the number of manufacturers for essential medicines, as defined by the World Health Organization or another similar entity, falls below two (Improving Access to Affordable Prescription Drugs Act).
Require persons who undertake federally funded research and development of drugs to enter into reasonable pricing agreements with the Secretary of Health and Human Services (S. 1681).
Allow Medicaid formulary exclusion
Test Medicaid drug coverage and financing reforms to that take on private sector best practices, such as State determination of drug formularies.
Amend the Medicaid Drug Rebate Program to allow for exclusion of certain drugs from coverage under rebate provisions.
Amend Social Security Act to provide for negotiation of lower covered part D drug prices on behalf of Medicare beneficiaries and the establishment and application of a formulary by the Secretary of Health and Human Services under Medicare part D and for other purposes.
Allow Medicaid to exclude drugs based on effectiveness. Health plans should have the ability to manage their own formularies.
ASP based reimbursement
Packaging and vial sizes
Access to Treatment
Leverage federal action
Invoke “march-in” rights or government royalty-free license rights on excessively costly products that were developed in large part with government funding.
Use 28 USC § 1498 to purchase rights to manufacture high-cost prescription drugs for treatment of burdensome diseases, such as hepatitis C.
Congress could also consider amending the Bayh-Dole Act by specifying in greater detail the precise circumstances in which march-in rights should be exercised. Congress may also take such steps as transferring authority over the administration of march-in rights, requiring government contractors to submit periodic reports regarding the commercialization of inventions achieved through public funding, creating a centralized database of inventions subject to the Bayh-Dole Act, and taking steps to ensure that patents on inventions developed through government funding are licensed to the most capable enterprise.
Limit influence of international trade agreements on drug prices
Direct the United States Trade Representative to reject provisions in trade agreements that would raise drug prices in the U.S., extend periods of patent exclusivity, or remove flexibilities in U.S. law regarding drug pricing (Prescription Drug Affordability Act).
Increase Medicare and Medicaid rebates
Restore minimum rebate on drugs covered under Medicare Part D for low income Medicare beneficiaries, previously eliminated in the creation of Part D (Prescription Drug Affordability Act).
Overhaul ASP calculation
Require all manufacturers of products paid under Part B to submit ASP data, and impose penalties for failure to report. Reduce wholesale acquisition coast (WAC) based payments to WAC +3%. Require manufactures to pay Medicare a rebate when the ASP for their product exceeds the inflation benchmark, and tie the beneficiary cost-sharing and the ASP add-on to the inflation-adjusted ASP.