On September 25, 2019, the Senate Finance Committee, led by Chairman Chuck Grassley, released the text of its long-awaited bill intended to reduce prescription drug prices in Medicare and Medicaid.
The bill is less aggressive than one put forth by Democrats in the House of Representatives, and we can expect that Senate Finance Chairman Chuck Grassley will highlight the differences between the two bills in the coming weeks and months. As currently drafted, the proposed Senate legislation would restructure the Part D benefit, modify payment methodologies for some drugs, and impose an inflation cap on drug price increases. The Committee marked up the legislation prior to leaving for the August recess, and it cleared the committee despite a lack of Republican votes.
As noted above, in the time between the markup and the recent release of this bill text, House Democrats have introduced their own bill on drug pricing and transparency that goes much further than this Senate draft, including requiring the Department of Health and Human Services (HHS) to directly negotiate drug prices with manufacturers. However, Chairman Grassley has remained a steadfast supporter of the noninterference clause. The Congressional Budget Office has predicted that repealing the noninterference clause would have a “negligible” impact on federal spending on prescription drugs.
What Comes Next?
While President Trump has signaled his support for Chairman Grassley’s bill and has praised the House Democrats’ draft as well, the kickoff of an impeachment inquiry threatens to derail not just drug pricing but Congress’s entire legislative agenda.
Finance Chairman Chuck Grassley signaled that he believes the bill might not receive consideration until next year, continuing that he hopes to get President Donald Trump’s support on the legislation. “It is nice to have the White House say they support the bill, but it’s better if you have the President himself supporting it,” said Chairman Grassley. He highlighted popular support for drug pricing reforms as potential pressure for the bill to be taken up on the floor, saying “if McConnell wants to keep the majority, then this drug pricing bill is part of that plan.” However, Senate Majority Leader Mitch McConnell has seemed hesitant to bring the bill to the floor given that a number of republican senators oppose significant parts of the legislation – most notably the mandatory rebates to HHS for prices that rise faster than inflation. However, Chairman Grassley said that he believes the release of the text could spur additional support.
The bill reflects the Chairman’s Mark from July 2019 and the subsequent modifications that were made to the Chairman’s Mark. While various Committee members offered and withdrew a number of amendments that appeared to be possibilities for consideration and inclusion in the final text, none found their way into the released proposed legislation. However, as the House and Senate do not typically see eye-to-eye these days, it is entirely possible some of those withdrawn amendments may come back to light in the coming weeks and months of negotiations.