Summary
The House and Senate are both in recess until after Labor Day. During this Congressional break, we are taking the opportunity to provide in-depth analysis of policies under consideration for a potential lame duck package, which culminate with the release of the Impact Health Policy Partners Lame Duck and Election Preview memo in September. To start, we are highlighting pharmacy benefit manager (PBM) reform, prescription drug patent reform, and legislation to address generic drug shortages.
PBM Reform
Last year, the House and the Senate both advanced several bills aimed at addressing PBMs, including legislation to increase PBM transparency, prohibit spread pricing in Medicaid, and delink PBM reimbursement from the cost and utilization of the drug, among other reforms. This year, lawmakers remain focused on advancing PBM reform, primarily as an offset to other health care priorities, such as extending the COVID-19 telehealth flexibilities. Most recently, the House Committee on Oversight and Accountability convened its third hearing on the role of PBM in prescription drugs markets, which coincided with the Committee’s release of its report on the impact of PBM practices on health care costs (Impact summary).
Impact Health’s chart here features the primary PBM bills still under consideration, as well as a compendium of PBM bills introduced in the 118th Congress. As PBM reform is an area that has received bipartisan support, it is likely that some combination of provisions from the bills previously advanced could be included in a potential lamed duck package, especially if they are scored by the Congressional Budget Office (CBO) to generate savings. Provisions that have received the most bipartisan support appear to be the transparency requirements and prohibiting spread pricing in Medicaid. The delinking provisions, which are featured in recent House telehealth legislation (H.R. 8261 and H.R. 7623) face less bipartisan support.
While the Administration remains focused on implementing the prescription drug provisions of the Inflation Reduction Act, including the forthcoming release of the maximum fair price for the initial price applicability year 2026 of the Medicare Drug Price Negotiations program, Congress has expressed interest in advancing legislation aim at patent reform. Last month, the Senate passed S. 150, the Affordable Prescription for Patients Act of 2023, which prohibits products hopping by drug manufacturers. The Congressional Budget Office estimates that this bill would generate $2.4 billion in savings over ten years. The Senate Judiciary has also advanced S. 148, the Stop STALLING Act, and S. 142, the Preserve Access to Affordable Generics and Biosimilars Act, which are estimated to save $300 million and $1.2 billion, respectively. Such legislation could be featured in a potential lame duck package, if lawmakers seek to offset the cost of other health care priorities.
Generic Drug Shortages
Amid reports of ongoing generic drug shortages, the House and Senate held hearings to examine such shortages, as well as related supply chain challenges, and potential policy solutions. Following the hearings, the Senate Finance Committee released a white paper, and subsequent discussion draft, aimed at addressing persistent drug shortages. The Biden Administration also released a white paper, as well as a request for information to address the shortages. With no legislation advanced at this time, it is unlikely that provisions to address drug shortages will be included in a potential lame duck package.