The President’s budget was released yesterday (Monday, February 10)—and everyone was waiting for details on the international price index or other plans around drug pricing.
The good news: the budget didn’t mention IPI specifically, or any foreign reference pricing…
However: The budget includes a placeholder that assumes congressional action on “bipartisan drug pricing proposals.”
In the “placeholder,” the Administration says it supports “…legislative efforts to improve the Medicare Part D benefit by establishing an out-of-pocket maximum, improving incentives to contain costs, and reducing out-of-pocket expenses for seniors. The Administration also supports changes to bring lower-cost generic and biosimilar drugs to patients. These efforts would increase competition, reduce drug prices, and lower out-of-pocket costs for patients at the pharmacy counter.”
How much are we talking? $135 billion—a number very similar to the CBO’s score of the Grassley-Wyden legislation passed out of the Senate Finance Committee. Many have interpreted this as a tacit endorsement of this legislation by the White House.
And what would it do? The Grassley-Wyden legislation would implement an out-of-pocket cap in Part D, smooth beneficiary cost sharing throughout the year, and impose inflation caps on price increases in both Medicare Parts B and D, among other changes.
And it does not have a foreign reference price component—so you can breathe a sigh of relief, for now.
Acceleration of drug and device approval and reimbursement.
Value-based payment for drugs in Medicaid.
Improving 340B program integrity.
Promoting generic and biosimilar competition.
Providing more funding for biodefense and emergency preparedness procurement through BioShield and the Strategic National Stockpile, including $175 million for global health security (some of which, the budget notes, will be leveraged to respond to the coronavirus.
Alex's Analysis: Generally, there are some good principles behind what's in the budget, particularly support for reducing seniors’ out-of-pocket costs and supporting biopreparedness, though it remains to be seen how the details will shake out. My hope is that the administration will consider a holistic approach to the problem of health care costs – rather than importing foreign price controls that will lead to fewer medicines for patients and do little to lower costs at the pharmacy counter. – Alex Keeton, BIO’s Director of Policy Research and Analytics