Prescription drug policies were discussed at a very high level—and largely reiterated previous proposals based on the President’s American Patients First Blueprint.
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.
Honorable mentions:
- 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.
The budget also calls for more funding in science and biotech, especially for agriculture and the environment including:
- Proposing $100 million in discretionary funding for USDA's Higher Blends Infrastructure Incentive program, which will support the installation of ethanol and biodiesel pumps across rural America.
- $200 million for USDA's Foreign Agricultural Service to reduce trade barriers and open new markets for products of ag biotech.
- Reducing the budget for the implementation of the Bioengineered Disclosure Law from $2 million to $1 million.
- A re-proposal from FDA to establish an "Innovative Products User Fee" to provide more funding for the review of novel food products, like synthetic foods, and other products of biotech.
So, what happens next? Basically, not much, because as we know, Congress ultimately decides how the budget is spent. (And interestingly, both the left and the right say it may not matter much.) But, it's important to see what the administration is prioritizing, particularly on health care, and particularly in an election year.
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
HHS Budget Fact Sheet
Industries of the Future Budget Fact Sheet
Axios Vitals digs into the budget’s provisions on Medicaid and drug policy.
And POLITICO looks at some other things in the budget, too.
