S 348 — Prescription Drug and Health Improvement Act of 2017

Summary

Prescription Drug and Health Improvement Act of 2017 This bill requires the Centers for Medicare & Medicaid Services (CMS) to negotiate lower prices on behalf of Medicare and Medicare Advantage (MA) beneficiaries for covered prescription drugs that the CMS deems appropriate for negotiation based on: (1) program and per-beneficiary spending, (2) unit price increases over the preceding years, (3) initial launch price, (4) availability of similarly effective alternative treatments, (5) status of the drug as a follow-on to previously approved drugs, and (6) any other criteria determined by the CMS. If, after a one year period, negotiations with respect to a covered prescription drug prove unsuccessful, the CMS shall establish a price for the drug that is equal to the lesser of the price paid by the Department of Veterans Affairs or the price paid by the four largest federal pharmaceutical-drug purchasers. The CMS may (but is not required to) negotiate lower prices on behalf of Medicare and MA beneficiaries for other covered prescription drugs. The Government Accountability Office must report to Congress on the CMS' negotiations. The Center for Medicare and Medicaid Innovation must test several specified models for negotiating drug and biological prices.

Bill Text

• Introduced Introduced in Senate Current html February 09, 2017

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill requires the Secretary of Health and Human Services to negotiate lower drug prices for Medicare beneficiaries, changing existing law regarding price negotiations.

• 42 U.S.C. 1395w-111

  subsection (i) → Notwithstanding any other provision of law, in furtherance of the goals of providing quality care and containing costs under this part, the Secretary shall, with respect to applicable covered part D drugs, and may, with respect to other covered part D drugs, negotiate, using the negotiation technique that the Secretary determines will maximize savings and value for a covered part D drug and plan enrollees (in a manner that may be similar to Federal entities and that may include, but is not limited to, formularies, reference pricing, discounts, rebates, and other price concessions), with drug manufacturers the prices that may be charged to PDP sponsors and MA organizations for such drugs for part D eligible individuals who are enrolled in a prescription drug plan or in an MA-PD plan. In conducting such negotiations, the Secretary shall consider the drug's current price, initial launch price, prevalence and usage, and approved indications, the number of similarly effective alternative treatments for each approved use of the drug, the budgetary impact of providing coverage under this part for such drug for all individuals who would likely benefit from the drug, and evidence on the drug's effectiveness compared to similar drugs.

  This change allows the Secretary to negotiate prices for covered Part D drugs, which was previously prohibited.

• 42 U.S.C. 1395w-111

  If, after attempting to negotiate for a price with respect to a covered part D drug under paragraph (1) for a period of 1 year, the Secretary is not successful in obtaining an appropriate price for the drug (as determined by the Secretary), the Secretary shall establish the price that may be charged to PDP sponsors and MA organizations for such drug for part D eligible individuals who are enrolled in a prescription drug plan or in an MA-PD plan at an amount equal to the lesser of--(A) the price paid by the Secretary of Veterans Affairs to procure the drug under the laws administered by the Secretary of Veterans Affairs; or (B) the price paid to procure the drug under section 8126 of title 38, United States Code.

  This provision establishes a fallback price for drugs if negotiations fail.

• 42 U.S.C. 1315a

  The models selected under this subparagraph shall include at least 3 of the models described in subparagraph (D), which shall be implemented by not later than 18 months after the date of the enactment of the Prescription Drug and Health Improvement Act of 2017.

  This change requires implementation of specific models related to negotiating drug prices.

• 42 U.S.C. 1315a

  The models described in this subparagraph are the following models for negotiating drug and biological prices under the applicable titles (including under both parts B and D of title XVIII) in order to improve the value of payments for such drugs and biologicals under such titles: (i) Discounting or eliminating patient cost-sharing on high-value drugs and biologicals. (ii) Value-based formularies. (iii) Indications-based pricing. (iv) Reference pricing. (v) Risk-sharing agreements based on outcomes. (vi) Pricing based on comparative effectiveness research. (vii) Episode-based payments for chemotherapy and other conditions determined appropriate by the Secretary.

  This change outlines specific models to be used for negotiating drug prices, aiming to improve their value.

Action History

1. February 09, 2017

   Introduced in Senate

2. February 09, 2017

   Read twice and referred to the Committee on Finance.

Sponsors

• Al Franken · Primary

Subjects