Health Policy Snapshot: April 2024

Greg Chesmore
April 04, 2024

State Prescription Drug Affordability Board bills gain momentum in Connecticut and Rhode Island; Virginia bill still awaits action by Governor Youngkin
Legislation that would create drug pricing review boards continues to advance at the state level, evidence that state legislators aren’t interested in waiting to see how things change with implementation of the Inflation Reduction Act (IRA). As we mentioned last month, Virginia’s legislature narrowly passed the legislation in early March.  Governor Glenn Youngkin (R) has until Monday to either sign or veto the bill.  If he signs it, he will be the first Republican governor to sign legislation creating a Prescription Drug Affordability Board (PDAB). For those who don’t follow Virginia politics, this legislative session (and the Governor’s veto decisions) has been heavily impacted by debate over a new Northern Virginia sports arena proposal. Both sides of the drug pricing debate have been encouraging the Governor to sign or veto, with anti-industry organizations holding multiple rallies and press conferences around the state. We’ll send a separate email when we know the Governor’s decision. As we await the decision in Virginia, legislation is advancing in Connecticut and Rhode Island. Both bills create boards with broad authority, including the ability to set payment limits on what the state will pay for identified “high cost” prescription drugs. The Connecticut PDAB creation is part of a larger prescription drug affordability package, Senate Bill 8, which also includes other controversial issues like creation of a state program to allow importation of certain drugs from Canada. Connecticut’s legislative session is set to adjourn in early May. In Rhode Island, Democrat legislators are pushing another version of PDAB legislation, Senate Bill 2719, which was featured last week at an AARP press conference in Providence. The Rhode Island legislative session will not end until June 30. A PDAB bill in Illinois, House Bill 4472, enjoys strong support in the House, but faces an uphill battle in the Senate. Opponents of the Illinois legislation are ramping up pressure, with patient advocates publishing an April 2 Chicago Sun Times op-ed warning that PDABs will likely result in certain medications being unavailable to patients. There are 10 states that currently have some sort of prescription drug affordability board or commission in state, but only four states empower the bodies to set prices for medications targeted as “high cost”. 

Congress ramps up scrutiny of Chinese companies; Impact on U.S. health care companies could be extensive
It’s a tough time for Chinese companies on Capitol Hill, especially companies that handle any personal data of U.S. citizens. Elected officials on both sides of the aisle have signaled support for legislation (the BIOSECURE Act (HR 7085 and S 3558) that will bar federally funded institutions from contracting with “foreign adversary” biotech companies of concern. A core issue for Congress is the national security threat posed by alleged ties between a number of firms, including WuXi, and China’s communist government. WuXi has denied any such relationship. The legislation potentially inserts more risk into the complex pharmaceutical supply chain, which relies heavily on places like China and India for medicine manufacturing. The BIOSECURE Act passed the Senate Homeland Security and Governmental Affairs Committee 11-1 on March 6. Interestingly, the main House champion of the legislation, Rep. Mike Gallagher (R-WI) recently announced his retirement from Congress effective April 19. Gallagher’s resignation could impact some of the momentum behind the legislation. With the potential for some sort of bipartisan legislation passing in 2024, companies have begun their examination of relationships with several Chinese companies that could come under scrutiny. An April 2 article from Endpoints News spotlights more than 36 small, mid-size and large companies who have relationships that could be impacted by the current version of the BIOSECURE Act. The Endpoints team discovered the information through a review of various securities filings. While the legislation still has a long, winding road to becoming law, the fact that Democrats and Republicans have voiced support (in an era where bipartisan agreement on anything is newsworthy) makes the issue something to keep an eye on for the remainder of 2024. The law firm Ropes & Gray has published a public, comprehensive summary of the BIOSECURE Act, which can be accessed here.

HHS and biopharma companies begin final negotiation phases for Medicare drug pricing, while Trump campaign seeks to revive 2020 reference pricing proposal
The U.S. Department of Health & Human Services’ Centers for Medicare & Medicaid Services (CMS) and the makers of the first 10 drugs subject to Medicare negotiation continue to make back-and-forth offers on what CMS will identify as a “maximum fair price” for each drug. The price will be published this coming September and go into effect at the start of 2026. CMS announced Tuesday (April 2) it has responded to counter offers from all drug makers participating in the process, and the negotiations are expected to continue until the process officially ends in August. Meanwhile, the left-leaning Center for American Progress launched a state-by-state analysis of how the IRA’s drug price controls will benefit consumers. The state-specific fact sheets have also been heralded by President Biden’s re-election campaign as he hits the campaign trail in several swing states this spring. While Republicans remain critical of the IRA and its drug price controls, former President Donald Trump announced this week that if re-elected, he’ll seek to revive his earlier plan to link U.S. drug prices to the prices paid in other countries, often referred to as “most favored nation” (MFN) drug pricing. Politico first reported that the proposal will be part of the 2024 Trump campaign strategy.  The policy was halted in 2020 before it could be implemented by the previous Trump Administration. It aims to reduce prices by requiring Medicare to pay no more than what other developed countries pay for the top 50 drugs, including drugs that physicians administer to patients, such as cancer drug infusions. The proposal was vehemently opposed by PhRMA and questions were raised about the proposed program’s legality. It appears the life sciences community will have a challenging road ahead regardless of who occupies the White House next January.

Health Policy Snippets:

  • The Biden Administration is continuing to grant flexibility to Americans who lost health care coverage due to the end of the COVID-19 public health emergency (PHE). It’s latest move: extend the deadline for its temporary special enrollment period (SEP) until the end of November for individuals who lost Medicaid or Children’s Health Insurance Program (CHIP) coverage and are eligible for coverage through the ACA health care marketplace. HHS also released new resources at the end of March to help consumers, state Medicaid agencies and health care partners transition individuals to new health care coverage.
  • On March 22, President Biden signed legislation funding the government through September. While all the crucial health care agencies are now funded for the remainder of the fiscal year, the $1.2 trillion government funding bill did not include several health care proposals sought by various stakeholders. This increases the chances that Congress may consider major health care legislation during its lame-duck session after the November elections (which is never easy…or pretty) since Congress is not in session in August or October.  The lame duck session kicks off November 12 and ends December 20.