Summary
Prescription Drug Pricing and Health Care Reforms
Following President Joe Biden’s call for prescription drug price negotiation this year in his address to Congress, key Democratic lawmakers are pushing to add the proposal to the $1.8 trillion American Families Plan. While Democrats likely have the votes to pass the drug pricing measure in the House, they potentially face an uphill battle in the evenly split Senate. In addition, lawmakers will have to make sure the measure complies with budget reconciliation requirements.
If Democrats can stick together and clear all the Byrd Rule hoops, the next likely hurdle will be deciding how to finalize the policy in a way that generates savings. In 2019, the Congressional Budget Office (CBO) estimated that the price negotiation provisions of Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3) would lower federal spending by $456 billion over 10 years due to its leveraging of international prices as a cap on Part D reimbursements.
In his address, Biden directed Congress to use the savings to “strengthen the Affordable Care Act (ACA) and expand Medicare coverage benefits without costing taxpayers,” which appears to reference proposals to extend ACA premium subsidies and add new benefits like vision and dental or a catastrophic out-of-pocket cap to Medicare. Additional ACA strengthening may include fixing the “family glitch” that blocks families with relatively high employer premiums from accessing subsidies. CBO has estimated that fixing this policy would cost the federal government about $45 billion.
Drug pricing issues aside, over the next few months, Democratic leaders face the herculean task of shepherding Biden’s $4 trillion infrastructure proposal through Congress. They will soon have to refocus their political energy on fiscal year 2022 spending ahead of the September 30 government funding deadline.
We will likely see this debate on prescription drug pricing as well as ACA and Medicare reforms unfold over the coming months as lawmakers continue to craft their infrastructure legislation. This week, the House Energy and Commerce (E&C) Subcommittee on Health will examine H.R. 3; the Lower Costs, More Cures Act of 2021 (H.R. 19), Republicans’ counterproposal to H.R. 3; and several bills aimed to facilitate market entry of generic drugs. The House Education and Labor Subcommittee on Health, Education, Labor and Pensions will also hold a hearing on H.R. 3.
Broadband
On Thursday, the E&C Subcommittee on Communications and Technology will convene a hearing to discuss broadband equity, a pressing need amplified by the COVID-19 pandemic as more people rely on telehealth and remote learning. Biden’s American Jobs Plan calls for $100 billion to improve broadband infrastructure an access – an amount similar to that proposed in E&C Democrats’ LIFT America Act (H.R. 1848). It calls for building broadband infrastructure in underserved areas to reach universal broadband coverage, subsidizing internet costs, and increasing transparency and competition among internet providers.