20191001 Pelosi Drug Price Plan - Pelosi drug pricing plan could impact covered entities

Pelosi drug pricing plan could impact covered entities

As 340B Health reports, a new proposal unveiled September 19 by House Speaker Nancy Pelosi, the “Lower Drugs Costs Now Act” (H.R.3), aims to bring down drug prices by allowing Medicare to negotiate prices on certain high-cost drugs and capping out-of-pocket costs for Medicare beneficiaries.

Under the bill, each year Medicare would negotiate prices on at least 25 drugs that have high prices and are highly utilized by Medicare patients. That total could go as high as 250 drugs a year. Negotiations would be tied to an index of international prices for those drugs and private insurers would be able to use those same prices in the private market, says 340B Health.

“The legislation, as introduced, contains language related to 340B. 340B Health understands that the intent of the language is to allow 340B hospitals to continue to purchase drugs at the 340B discount price,” the organization said the day the proposal was unveiled. “340B Health is working with congressional staff to guard against unintended consequences.”

“We applaud Speaker Pelosi’s efforts to rein in high drug prices. The cost of many prescription drugs makes it difficult for patients to afford needed medications,” said Maureen Testoni, President and Chief Executive Officer of 340B Health. “We look forward to working with leaders in Congress as they continue to work on legislation to address this pressing concern and preserve the vital role 340B hospitals play for patients with low incomes and those living in rural communities.”

However, according to an article from STAT News published September 30, “a 60-word provision tucked into” the plan “could wreak havoc on hospitals that serve the poor.”

According to the article, “Pelosi’s new bill … would make it impossible to get a 340B discount for any drug that Medicare negotiates for. The provision would likely prevent hospitals from making money off of these drugs because they’d no longer be able to buy them for cheap and sell them for a profit. Instead, they’d get the same terms as any other ordinary hospital. It’s impossible to know exactly how much money these hospitals stand to lose from Pelosi’s plan, but it’s likely in the billions.”

Now, says STAT, covered entities are pushing Congress to rewrite the provision.

“We are looking at potential changes to that language just to make it clear that the purpose would not be to get rid of the 340B program for those drugs,” says Testoni, who clarified to STAT that she “believes the drafters didn’t intend to significantly shake up the program,” though she admitted the language was confusing and concerning.

Sentry will continue to closely monitor this situation as news develops and provide updates to our covered entity customers. We stand by the statements and concerns of 340B Health, and as always, we stand by our covered entities as they continue their mission to deliver high-quality care to vulnerable populations.