While the U.S. House and Senate push forward with controversial legislative packages aimed at making prescription drugs more affordable for Americans, other bills that would impact the biopharma sector are making their own way through Congress, being absorbed into the larger pricing packages or getting tacked on to unrelated legislation.
Several of them, like the bipartisan Fair and Accurate Medicaid Pricing (AMP) Act, would crack down on industry, ending some of the games that can lead to higher drug spending.
Signed into law last week after it was wrapped into the continuing resolution to keep the government open through Nov. 21, the AMP Act closes a loophole that allowed drug companies to underpay the rebates owed to state Medicaid programs, thus increasing state and federal costs for prescription drugs.
Medicaid rebates are calculated based on the average manufacturer price of a drug. Under the loophole, drug companies could manipulate that price by combining the price of their brand drug and authorized generic. By removing authorized generics from the brand calculation, the AMP Act is expected to save more than $3.1 billion over the next 10 years, according to the bill's sponsors, Sens. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.).
Other proposed bills address issues near and dear to patients, promote biosimilars – and even check off an item or two on the industry's wish list. The following are some of the bills that have been recently introduced in Congress:
• The Safe Step Act – The bipartisan bill was introduced last week in the Senate as an amendment to the Employee Retirement Income Security Act. The legislation requires group health plans to provide an exception process for step therapy, or "fail first," protocols that require patients to fail on less expensive therapies before they can access the drug their doctor prescribed.
The bill requires payers to establish a clear, transparent process by which patients or their doctors can request an exemption to step therapy. The bill also specifies that an exception must be granted for any of the following reasons: the patient already has tried and failed on the required drug, delayed treatment will cause irreversible consequences, the required drug will cause harm to the patient, the required drug will prevent a patient from working or fulfilling daily living activities, or a patient is stable on current medication.
• The Closing Loopholes for Orphan Drugs Act – A bipartisan bill introduced in the House last week, this legislation would close a loophole in the 340B Drug Pricing Program that currently enables drug manufacturers to escape paying 340B hospitals and clinics a discount for outpatient drugs with an orphan indication even when the drugs are being used for a non-orphan indication.
• The American Innovation and Competitiveness Act – Another bipartisan measure introduced in the House last week, this bill is intended to build on the progress of the Tax Cuts and Jobs Act by eliminating a provision in the 2017 law requiring businesses to amortize R&D expensing over a five-year period beginning in 2022. "Immediate R&D expensing incentivizes long-term investments in innovation and technological breakthroughs by providing a business an opportunity to deduct research and development activities in the tax year that they occur," according to the bill's sponsors, Reps. Ron Estes (R-Kan.) and John Larson (D-Conn.)
• The Chronic Condition Copay Elimination Act – Introduced in the House last week, the bill would require private insurance plans to cover many common drugs, devices and screenings used to treat chronic conditions including diabetes, asthma, bleeding disorders, depression, heart disease, hypertension, liver disease and osteoporosis with no out-of-pocket costs.
• The Affordable Prescriptions for Patients through Promoting Competition Act – The bill is intended to increase generic and biosimilar competition by making it more difficult for brand companies to delay competition through "product hopping," or evergreening. Introduced in the House a few weeks ago, the legislation would strengthen the FTC's ability to bring and win cases against drug companies that engage in all forms of product hopping.
In a memorandum for a House subcommittee hearing on product hopping last month, Energy and Commerce Committee Chair Frank Pallone (D-N.J.) cited a 2009 study that reviewed more than 400 reformulations between the years 1995 and 2009. Several of those were linked with the timing of prospective generic market entry. "These 'suspect' reformulations included 32 minor reformulations, such as 'changes from a capsule to a tablet or vice versa; changes in chemical structure that, according to independent researchers, yielded little or no consumer value; and multiple, seriatim product reformulations,'" Pallone said. The study identified another 22 reformulations that may have qualified as product hops, including switches to extended-release products or combinations of already approved drugs.
While recognizing that many reformulated products offer medical or other benefits, Pallone said, "some are 'undeniably inferior' to the original brand product and can significantly impair consumer access to [a] lower priced generic."
• The Advancing Education on Biosimilars Act – The bipartisan bill was introduced in the House last month as a companion bill to legislation introduced earlier this year in the Senate with the intent of developing the U.S. biosimilar market. The bill would require the FDA to create a public website to educate patients and providers about biologics and biosimilars. The website should indicate which biologics and biosimilars are interchangeable, and it should include the process for reporting adverse events. In addition to the website, the legislation would require the development of continuing education programs on biosimilars for doctors and nurses.
Coincidentally, the week the bill was introduced in the House, the FDA launched a new webpage for patients and an infographic to help increase public awareness of biosimilars. Sort of a Biosimilars 101, the webpage explains, at a basic level, what biosimilars are, but it doesn't mention biosimilars by name or discuss which biosimilars reference a specific biologic.
• The Bolstering Innovative Options to Save Immediately on Medicines (BIOSIM) Act – A bipartisan bill introduced in the House last month, the BIOSIM Act mirrors provisions proposed in other legislation to encourage the uptake of biosimilars. It calls for Medicare to reimburse Part B biosimilars, during their first five years, at average sales price plus 8% of the reference biologic price rather than 6%.
That reimbursement scheme could hurt the sustainability of biosimilars as it would favor new biosimilars over those already on the market. It also would create an uneven playing field that would provide less incentive for biosimilars to compete on price, according to Chad Pettit, executive director for global value access and policy for Amgen Inc.'s biosimilars business unit. (See BioWorld, Sept. 3, 2019.)