Inside Health Policy: Meadows Works On Rx Pricing Deal, Introduces Insurer Negotiation Bill

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Washington, April 3, 2019 | comments

Meadows Works On Rx Pricing Deal, Introduces Insurer Negotiation Bill

April 03, 2019

Rep. Mark Meadows (NC) is writing what he says is a comprehensive drug-pricing bill with fellow House Republicans that could expand rebate reforms to the commercial market, the Freedom Caucus chair told Inside Health PolicyWednesday (April 3). On Tuesday, he introduced a separate bill to let insurers jointly negotiate with drug makers on price.

Meadows said he spoke with Trump administration officials about the drug-pricing bill he is writing, he had meetings all Wednesday on the topic, and he will meet with a key House Democrat Thursday.

“It’s a work in progress right now, and certainly we are looking at how we effectively lower prescription drug prices as it relates to a rebate program not just for Medicare, but for all drug prices,” Meadows said.

He said the idea is to use portions of a bill by Rep. Bruce Westerman (R-AR) as a foundation for the deal and incorporate measures by Sen. Mike Braun (R-IN). Westerman’s bill includes the pro-generic CREATES Act and would tighten reporting requirements for the 340B drug discount program and pharmacy benefit managers. Braun’s drug-pricing package would extend HHS’ point-of-sale-rebate proposal to the commercial insurance market, speed FDA reviews of dugs already for sale in other developed countries and crack down on citizen petitions filed by brand-drug makers.

Meadows is framing the already introduced bill, which would allow insurers to band together within states to increase bargaining power with drug companies, as an alternative to Democrats’ Medicare Part D price negotiation proposals, according to a letter to his House colleagues obtained by Inside Health Policy.

The North Carolina Republican said he consulted Avik Roy, president of the conservative-leaning think tank Foundation for Research on Equal Opportunity, GlaxoSmithKline, Blue Cross and Duke Health to draft the bill.

“This market-oriented approach will limit further consolidation in the healthcare market, and balance out the power of the pharmaceutical industry,” the letter states.

The structure draws from Switzerland’s framework to create a safe harbor from antitrust law for private health insurers to negotiate with drug makers. Roy published a white paper in 2017 calling for the United States to adopt the Swiss model, which encourages private insurers in a region to jointly negotiate with drug manufacturers.

“The ability to jointly negotiate with manufacturers would limit the need and desirability of insurers to consolidate, because the primary rationale for consolidation is to level the playing field with providers and drug companies,” Roy wrote.

Meadows’ insurer-negotiation bill would ensure that pharmacy benefit managers pass rebates to insurers, he said. The bill’s impact on pharmacy benefit managers is still being evaluated, Meadows said, though it was highlighted as a “critically important” issue. Pharmacy benefit managers say they pass nearly all rebates to plans already.

“There is one goal in this, and it is not to beat up on one industry or one particular business model. It is to try to make sure we get the lowest prices to the consumer as we possibly can, and normally allowing for more negotiations and direct negotiations with drug companies should produce at least part of that result,” Meadows said.

The insurer-negotiation bill has been referred the House Judiciary Committee. -- Rachel Cohrs(rcohrs@iwpnews.com) and Amy Lotven (alotven@iwpnews.com)

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