trending Market Intelligence /marketintelligence/en/news-insights/trending/UetuAdv7c_eDz5X75POYgw2 content esgSubNav
In This List

US House adopts Pelosi drug pricing bill, rejects Republican substitute


Perspectivas América Latina 2023 Emerging Trends & Growth


Insight Weekly: SVB fallout limited; US rents up; renewable natural gas investments flow in


A Cloud Migration Plan for Corporations featuring Snowflake®


Investor Activism Campaigns Hit Record High in 2022

US House adopts Pelosi drug pricing bill, rejects Republican substitute

After a fierce debate between Democrats and Republicans, the U.S. House adopted Speaker Nancy Pelosi's legislation that would permit the federal government to negotiate the prices of the most expensive prescription drugs on behalf of the Medicare program and the commercial insurance market.

"For the people, we will lower the costs of healthcare by lowering the costs of prescription drugs," Pelosi said on the House floor on Dec. 12 about her bill, the Elijah E. Cummings Lower Drug Costs Now Act, or H.R. 3.

SNL ImageHouse Speaker Nancy Pelosi
Source: AP Photo

The vote was 230 to 192.

However, Senate Majority Leader Mitch McConnell, R-Ky., has already said he has no plans to ever bring up the bill for a vote in his chamber.

President Donald Trump also has indicated he would veto H.R. 3 if it ever made it to his desk.

"It's deader than a doornail," Rep. Kevin Brady, R-Texas, ranking member on the Ways and Means Committee, said on the House floor.

Democrats banded together to defeat a rival package of bills from Brady and other Republican committee leaders, rejecting it 223 to 201.

Pelosi said it was appropriate for Republicans to be given the opportunity to bring their alternative package of "nice little bills," known as H.R. 19, to the floor. But it lacked a negotiation mechanism, "the heart of the matter," she said.

Rep. Greg Walden, R-Ore., the ranking member on the House Energy and Commerce Committee and one of the co-authors of H.R. 19, said the Republican package was the "only bipartisan bill" offered Dec. 12.

He noted it included 40 bipartisan provisions that had already been adopted by House and Senate committees, including 28 from the Senate Finance Committee drug pricing legislation.

In addition, 17 of the measures in H.R. 19 were already approved by the House, including the CREATES Act. The act would make it easier and faster for generic-drug companies to sue brand-name biopharmaceutical makers when those manufacturers withhold samples of their medicines that their competitors need to conduct required studies for U.S. approval.

But H.R. 19 lacked any measures to stop drugmakers from raising their prices year after year, said Rep. Katie Porter, D-Calif.

The Pelosi bill includes a provision that would require drugmakers to pay rebates to the U.S. government if the companies increase their prices above the rate of inflation.

SNL ImageReps. Kevin Brady and Greg Walden with House Minority Leader Kevin McCarthy
Source: AP Photo

The legislation also includes a measure that would penalize biopharmaceutical companies that refuse to negotiate or that do not reach agreement with the U.S. Department of Health and Human Services — fines that could be as high as 95% of a drug's revenue.

Republicans said that penalty could devastate the drug industry. They also argued H.R. 3 would harm innovation — pointing to an analysis by the nonpartisan Congressional Budget Office that said there could be eight fewer drugs introduced to the U.S. market over the first decade of the bill, with that increasing to 30 fewer medicines over the subsequent decade.

That same report also said H.R. 3 could save the U.S. government $456 billion over a decade by permitting the Medicare program to negotiate drug prices directly with biopharmaceutical manufacturers.

Pelosi said the savings from H.R. 3 would be used to add dental, vision and hearing benefits to Medicare. The funds would also be used to support biomedical research and development and to address the U.S. opioid crisis.

Other amendments

Before the House voted on H.R. 3, it added a number of amendments to the legislation, including a measure from Rep. Joe Kennedy, D-Mass., that would require a Senate-confirmed officer within HHS, such as the U.S. Food and Drug Administration commissioner, to carry out H.R. 3's negotiation duties if the agency's secretary is found to have any conflicts of interest.

But Brady said Kennedy's measure was "narrowly tailored to be a petty jab" at HHS Secretary Alex Azar, who previously worked in the pharma industry.

Also agreed to by the House was an amendment from Rep. Paul Tonko, D-N.Y., which would require HHS to evaluate private drug plans sold under Medicare Advantage and the Part D program on how well they offer beneficiaries access to lower-cost versions of biologic therapies, or biosimilars.

But Walden said the Tonko amendment could result in higher prices for biosimilars because they would give manufacturers too much negotiating leverage "and we don't want to do that."

"They can keep the price high knowing they'll likely still be placed on the plan's formulary," Walden said.

The House also adopted an amendment from Rep. Abby Finkenauer, D-Iowa, that would require drugmakers to disclose "truthful and non-misleading" pricing information about prescription medicines and biological therapies when they advertise the products directly to U.S. consumers.

Brady, who supported the amendment, noted it was also among the measures included in H.R. 19.