U.S. House passed an ambitious bill to lower drug prices
At the end of 2019, important legislative changes took place in the United States that could impact the country’s pharmaceutical industry over the coming years. The U.S. House of Representatives has passed the Lower Drug Costs Now Act on 12th December 2019, setting it on course for Senate judgment. If passed into law, the bill, also known as H.R. 3, could save more than $450 billion over the course of a decade. The bill was brought by a group of Democrats, led by House Speaker Nancy Pelosi, and passed by 230 to 192 votes.
The bill aims to cut costs of prescription medicines for American patients. Democrats created the bill as a response to the disproportionately high costs of drugs in the US – prescription medicines are three to four times higher than in other developed countries, and sometimes even more than that. Key proposals in H.R. 3 include:
- Requirement for the Centers for Medicare & Medicaid Services (CMS) to negotiate directly with the drug companies. The negotiated prices would be available for Americans with private insurance, not just Medicare beneficiaries
- Mandate to negotiate prices on insulin products and at least 25 branded and high-cost drugs in the first year, then a minimum of 50 drugs every year after
- Stronger penalties for companies that raise the prices of drugs at a rate higher than that of inflation
- Reduction of the annual out-of-pocket spending threshold
- Reinvesting in innovation and the search for new treatments, using some of the savings made from lowering drug prices
Lower Drug Costs Now Act has so far had a mixed reception, with experts saying it could save billions of dollars in spending reductions for Medicare; however, it could lower the number of innovative drugs coming to the market. For now, while the legislation enables Democrats to send a message on this issue, disagreement over the bill with Republicans is also predicted. Furthermore, Senate’s seeming disinterest means that it won’t become law anytime soon. Although this outcome was an anticipated one, House Democrats had initially attempted to navigate the issue with President Donald Trump, who said that reducing prescription drug prices was a priority for him.
Thomson Reuters has reported that Pfizer, GlaxoSmithKline, Sanofi, Teva, and other drugmakers have hiked up U.S. list prices for more than 200 drugs on New Year’s Day. As drug prices continue to rise in the U.S. it will be interesting to see the Senate’s stand on Lower Drug Costs Now Act in the upcoming weeks.
GPI pulse allows you to track changes in drug prices in US, among many other markets. For more information contact GPI at email@example.com, or call: +44 (0) 203 874 3050.
By Dr. Saurabh Patil, Business Analyst and Jack Ziomek, Project Manager