House Committees Bring Pelosi’s Drug Bill to Floor; Action Expected by Late November

October 29, 2019

In keeping with U.S. House Speaker Nancy Pelosi’s schedule for pushing H.R. 3, the Lower Drug Costs Now Act, through the House of Representatives, the three committees of jurisdiction held mark-ups and passed the proposal, as amended, along party lines. However, the timing of when the full House will consider the proposal has slipped from the end of October, to by the end of November.

Three Committees With Jurisdiction

The three committees with jurisdiction over parts of H.R. 3 are the House Ways and Means Committee, the Energy and Commerce Committee and the Education and Labor Committee.

House Ways and Means Committee. The House Ways and Means Committee has sole jurisdiction over Part A. It shares jurisdiction of Part B with the Energy and Commerce Committee. Because of the committee’s pivotal role over the financing of Medicare, it also has jurisdiction over Medicare Parts C and D.

Education and Labor Committee. The Education and Labor Committee oversees the Employee Retirement Income Security Act (ERISA) and ERISA plans. H.R 3 permits ERISA plans to use negotiated drug prices, so the committee has jurisdiction over those parts of the bill related to ERISA.

Energy and Commerce Committee. The Energy and Commerce Committee shares some jurisdiction over the Medicare program with Ways and Means, but also has jurisdiction over public health programs and the Food and Drug Administration. The committee specifically amended sections of the bill related to the 340B program.

Coordination of Amendments

House Democratic leadership, including the leadership of the three committees, worked in concert to agree to specific changes in the legislation before the mark-ups to seek more support among progressives. In fact, prior to the mark-up, two progressives announced their support for the bill with the changes outlined by leadership. Those changes related to the number of drugs subject to negotiation.

Committee Mark-Ups

In each committee, Republican members opposed the bill and offered amendments to delay implementation until certain criteria were met for implementation. They also offered amendments to carve out drugs from negotiations for specific diseases. In addition, their comments highlighted how the bill had not followed regular order with hearings and mark-ups at the subcommittee level within each of the committees. Particularly at the Energy and Commerce Committee, Republicans said the process damaged the bipartisan discussions members of the Subcommittee on Health had been holding. In each committee, Republican amendments failed on recorded votes.

At the Ways and Means Committee, the chairman of the Ways and Means Health Subcommittee, Rep. Lloyd Doggett (D-Texas), said H.R. 3 did not go far enough, even with the changes made before mark-ups began. At the mark-up, he offered a number of amendments concerning negotiations and how savings would be spent for improvement of Medicare benefits. He withdrew some amendments before a vote. Other amendments offered by Rep. Doggett failed. He voted present on final passage of the bill in committee.

It is unclear whether all House Democrats will support H.R. 3 when it is brought to the House floor for consideration.

Principle Changes Approved by Committees

  • Increases the number of drugs subject to negotiation to 30 brand-name drugs in 2028, and 35 drugs in 2033. This is an increase from the original proposal of 25 brand-name drugs.
  • Drugs remain “eligible” for negotiation until there are two generic competitors. The original legislation required only one generic competitor.
  • Removes the 340B exemption from negotiations. H.R. 3 originally ensured that any drug selected by the U.S. Department of Health and Human Services (HHS) for negotiation would be exempt from the 340B Drug Discount Program, which requires drug companies to offer discounts on products to safety-net hospitals and other designated facilities in exchange for getting their drugs covered by Medicaid.
  • Requires drug manufacturers to submit reports to highlight manufacturing and research costs for a product subject to negotiation. If a company refuses, the penalty could be up to $75,000 per day.
  • Adds retirement plans to those plans that may use the negotiated “fair price.”
  • Applies to all territories (Guam, American Samoa, the U.S. Virgin Islands) and the Commonwealths of Puerto Rico and The Northern Mariana Islands.
  • Clarifies that out-of-pocket costs cannot exceed the negotiated price.
  • Includes newly launched drugs for negotiation when the initial cost exceeds the median family income in a year.
  • Requires the Government Accountability Office to conduct a study on the implementation of the fair price negotiation program.
  • Requires the Department of Labor to conduct a feasibility study regarding establishing an inflation rebate for group health plans.
  • Clarifies that the secretary of HHS must ensure that data collection under the bill is coordinated with, and not duplicative of, other data collection efforts.
  • Requires reporting from drug manufacturers in advance of price increases. This includes prescription drug price hike reporting; and combining provisions of the Ways and Means Committee’s passed legislation — the Survivorship, Treatment, Access and Research (STAR) Act — with the Energy and Commerce Committee’s passed legislation, the Fair, Accurate, Inclusive, and Respectful Education (FAIR) Act.
  • Requires reporting on drug price increases of 10 percent in one year or 25 percent over three years.
  • Includes a provision that would allow beneficiaries with high-cost drugs that trigger catastrophic thresholds on the first fill to pay their cost-sharing for that prescription over time.
  • Includes a provision on pharmacy quality metrics, requiring the secretary of HHS to develop standardized quality metrics for pharmacies that Part D plans must use if they have a pharmacy quality-reporting program.

After the death of Congressman Elijah Cummings (D-Md.), Democrats approved naming the bill after him.

Little Senate Appetite for Pelosi Bill

To date, the Senate has shown no interest in moving H.R. 3.

Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), the chairman and ranking member of the Senate Finance Committee respectively, continue to work with members of the Senate to gain support for their proposal, marked up by the committee earlier in the summer. Some predict that pieces of the Senate proposal could be included as part of a year-end healthcare package.

Should the full Senate and House move drug pricing legislation, H.R. 3 would be the House position for negotiations with the Senate.