Drug pricing legislation continues to forge ahead with a significant healthcare proposal back in play.

Today, Senate Majority Leader Chuck Schumer (D-NY) is resurrecting drug pricing proposals by submitting a potential reconciliation package that includes an agreement backed by all 50 Senate Democrats, including Joe Manchin (D-WV).

As you may remember, the Democrats reached a deal last November on key pillars of drug pricing reform.  Democrats have revived that legislation, introducing a prescription drug pricing reform bill with details that are similar to what we previously analyzed.

The bill introduced today reflects the same key pillars from last fall:

  • Allow Medicare to directly negotiate with manufacturers on the prices of some drugs starting in 2023
  • Cap manufacturer drug price increases to the rate of inflation
  • Reduce out-of-pocket costs for Medicare beneficiaries by limiting drug costs to no more than $2,000 a year 

However, there are a few notable items in the current bill:

  • Vaccinations for seniors at no cost to them 
  • Expand eligibility to help low-income Americans pay for medications covered under Medicare Part D 
  • Removal of the provision to cap out-of-pocket insulin costs as separate bipartisan legislation is being pursued

What’s next?

The broader “reconciliation” legislation – that includes climate, energy, and tax policies – is still stalled, but there is potential for Democrats to pursue a standalone reconciliation focused solely on healthcare. Any action is anticipated to take place prior to August recesses before the focus turns to mid-term elections this fall.

Considerations for manufacturers

Conversations about drug affordability and access will continue to remain in the spotlight so manufacturers should ensure they continue to refine the value story for their products and implement transparency measures related to drug pricing and access.

  • Revisit and external communication on price increase limits

o   As caps are introduced for certain products, the approach may need to shift

  • Inflation rates are significantly higher than previous years so companies may be called out for increases if they abide by the current inflation rate rather than inflation rates that were historically 3-4 times lower. 
  • Highlight pricing and access philosophies, demonstrating patient access and price transparency efforts 

About the Author:

Sarah Brawner is part of the Syneos Health Communications’ Reputation and Risk Management Practice where she helps clients navigate the complex policy environment and develop value and access campaigns. She has worked with organizations across the health ecosystem and excels at translating complex positions into powerful, reputation-building messages.