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Grassley, Wyden reveal tweaked drug bill, tack on expiring health programs

The bipartisan leaders of the Senate Finance Committee revealed the tweaks they made to their legislation aimed at lowering prescription medicine costs for Medicare beneficiaries.

The lawmakers also added into the legislation a number of must-pass measures to extend the life of several healthcare programs through the $100 billion projected savings generated from their drug pricing bill — a strategy to entice their colleagues on Capitol Hill to get behind the package.

SNL ImageSens. Ron Wyden and Chuck Grassley
Source: AP Photo

Those measures include extending the Patient-Centered Outcomes Research Institute, a program created under the Affordable Care Act to fund research testing the effectiveness of various medical treatments. It would also change certain elements of the program.

The legislation would also extend the Maternal, Infant and Early Childhood Home Visiting program through fiscal 2024 and the Temporary Assistance for Needy Families program for three years and institute certain requirements for it.

The White House backs the bill.

But it is unclear if the revisions, addition of the program extenders and the White House support will be enough to get skeptical Republicans on board with the legislation, which was adopted in July by the Senate Finance Committee in a 19-to-9 vote. All nine of the senators who opposed the bill were Republicans.

The Grassley-Wyden bill affects Medicare Part D, which covers medicines for seniors and disabled Americans at the pharmacy counter, as well as Part B, which covers injectable drugs administered at the doctor's office or in clinics. It also includes some reforms to the Medicaid program, which provides insurance for low-income Americans.

Republicans' key objection to the bill is a measure that would require drugmakers to pay rebates to Medicare if the companies increase their prices faster than inflation.

A number of Republicans have said that provision would be imposing price controls on biopharmaceutical manufacturers.

But the authors of the bill, Sens. Chuck Grassley, R-Iowa, the Senate Finance Committee chairman, and Ron Wyden, D-Ore., the ranking member, were not willing to let that measure go by the wayside.

It is "critical" that the inflationary rebate provision stays in the final version of the bill, a committee aide told reporters at a Dec. 6 briefing.

The legislation needed something that would reduce drug prices "and that is a key element," the aide said, adding that Grassley and Wyden were in lockstep on that front.

Under their legislation, the Senate Finance Committee leaders are seeking to make substantial changes to the structure of the Medicare Part D benefit, which they said would simplify the design and realign incentives to encourage more efficient management of drug spending.

The Part D program's coverage gap, commonly known as the doughnut hole, would be eliminated. In the initial bill, beneficiaries would have paid 25% in cost-sharing before they reached the catastrophic threshold, which would be set at $3,100 in 2022 — the point at which they would pay nothing out of pocket.

But in their revisions, Grassley and Wyden have cut the amount of spending during the initial phase of the benefit to 20%, which would lower the costs for beneficiaries who have expenses above their deductible, committee aides said.

Another change requires insurers to offer a cap on the amount of out-pocket-costs that a beneficiary must pay in any one month. Part D plans would be required to establish the voluntary program starting in 2022. The program is open to all beneficiaries.

Spreading high out-of-pocket costs over multiple months protects against the burden of a significant one-time expense, committee aides said.

A beneficiary would never pay more than the maximum total out-of-pocket costs below the catastrophic phase during which the beneficiary has no cost-sharing.

Beneficiaries could elect the program in advance of a plan year or at any month during the plan year.

A beneficiary who fails to pay the monthly amount billed is disenrolled from the program and would subsequently pay the cost-sharing as otherwise required by the plan.

The revised bill also would require Part D plans and their pharmacy benefit managers — often called middlemen — to include concessions and fees they negotiate with a pharmacy in the price Medicare beneficiaries pay at the pharmacy counter.

That measure would reduce out-of-pocket expenses for beneficiaries, the aides said. It would also prohibit retrospective recoupment of payments to pharmacies to provide more financial predictability.

Another change the two senators made to the legislation is aimed at smoothing the new required brand-name manufacturer discount, lowering it from 20% in the catastrophic phase to 14% starting in 2022.

Committee aides said that effort was more about ensuring access to certain medications, such as mental health treatments, than smoothing the path for biopharmaceutical manufacturers.