The drug pricing regulatory and legislative landscape continues to evolve rapidly at federal and state levels. Below, we highlight a few of the major federal changes that have occurred between February 29 through May 23, 2024.
Federal regulatory activity
Commercial business
Notice of Benefit and Payment Parameters (NBPP) final rule
On April 2, 2024, CMS issued the NBPP final rule. CMS finalized the following policies related to prescription drugs:
- Revised the minimum membership standards for Pharmacy & Therapeutics (P&T) committees to include a patient representative. CMS requires the patient representative to:
- Have relevant experience or participation in patient or community-based organizations
- Demonstrate the ability to integrate data interpretations with practical patient considerations
- Have a broad understanding of one or more conditions or diseases, associated treatment options, and research
- Disclose their financial interests
- Codified its current policy that prescription drugs in excess of those covered by a state’s essential health benefit (EHB)-benchmark plan are considered EHBs and would be subject to EHB protections, including the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless the drug is an additional state-mandated benefit, in which case, it would not be considered an EHB. The final rule does not address the application of this policy to Large Group market health plans and self-insured group health plans. However, in separate sub-regulatory guidance, the U.S. Departments of Health and Human Services (HHS), Labor and Treasury (the Departments) noted that they intend to issue rulemaking that would align this policy across all markets for purposes of the annual limitation on cost sharing.
- Retained the current United States Pharmacopeia (USP) Medicare Model Guidelines (MMG) to classify the prescription drugs required to be covered as EHB. HHS notes they may consider changes to the drug classification system — which could include anti-obesity medications — in future rulemaking.
Prescription drug reporting
On April 30, 2024, the Departments published an updated version of the proposed Reporting Instructions for Prescription Drug Data Collection (RxDC) for the 2023 Plan Year, due by June 1, 2024. The 30-day comment period closed on May 30, 2024 — two days before the RxDC reports are due. Concurrently, the Departments submitted the updated version of the reporting instructions to the Office of Management and Budget (OMB) for review.
General drug update
White House Budget
On March 11, 2024, the White House released the President’s Budget for fiscal year (FY) 2025. The President is requesting $130.7 billion for the Department of Health and Human Services, a 1.7 percent increase from FY2023 and $7.2 billion for the U.S. Food and Drug Administration (FDA), a 7.4 percent increase from FY2023.
Among the drug provisions, the President proposes to:
- Expand the number of drugs subject to price negotiation under the Medicare Drug Price Negotiation Program; and,
- Extend the $2,000 Medicare cap on out-of-pocket prescription drug costs and the $35 cost-sharing cap for insulin to the commercial market.
HHS white paper on preventing shortages
On April 2, 2024, HHS released a white paper that describes policy concepts for consideration, including collaboration with the private sector to develop and implement a Manufacturer Resiliency Assessment Program (MRAP) and a Hospital Resilient Supply Program (HRSP) aimed to bring transparency into the market, link purchasing and payment decisions to supply chain resilience practices, and incentivize investments in supply chain resilience and diversification in the supply chain — including domestic manufacturing — at a scale that would drive impactful change in the market.
Congressional Budget Office (CBO) request for research
On April 29, 2024, the CBO released a presentation calling for research on how Medicare’s coverage of anti-obesity medication would affect the federal budget as lawmakers consider legislation removing Medicare coverage restrictions.
Federal Trade Commission (FTC) drug patent listing challenges
On April 30, 2024, the FTC sent warning letters to 10 drugmakers, alleging more than 300 improperly listed patents used to delay generic competition. The letters targeted medications for diabetes, weight loss, asthma, and chronic obstructive pulmonary disease.
Reclassification of marijuana proposed rule
On May 16, 2024, the U.S. Drug Enforcement Administration (DEA) issued a proposed rule (with a 60-day comment period) to move marijuana from its current classification as a Schedule I drug to a Schedule III drug, thereby loosening federal DEA restrictions. Rescheduling to Schedule III also means that marijuana would remain subject to applicable provisions of the Federal Food, Drug, and Cosmetic Act.
National Institutes of Health (NIH) Request For Information (RFI) on promoting access
On May 21, 2024, the NIH issued an RFI seeking input on a proposed policy that would require innovators of NIH-owned inventions (including drugs, biologics, vaccines, or devices) to submit an Access Plan outlining steps they intend to take to promote patient access to the licensed product. The Access Plan would address the anticipated patient populations; other products, tools, facilities, or unique resources necessary for the licensed product; and one or more strategies to mitigate access challenges across criteria including affordability, availability, acceptability, and sustainability. Comments on the RFI are due on July 22, 2024.
Congressional activity
Senate activity
Drug shortages
On May 3, 2024, the U.S. Senate Finance Committee released a discussion draft to address and mitigate generic drug shortages. The draft would establish a voluntary Medicare Drug Shortage Prevention and Mitigation Program requiring participants to meet minimum standards and requirements to receive Medicare incentive payments. They include:
- Minimum three-year contracts with generic drug manufacturers
- Purchase volume and stable pricing commitments
- Contingency contracts with alternate manufacturers
- Prohibition of exclusive provider contracting requirements
- Transparency standards to address quality control issues, and
- Modifications to the Medicaid Drug Rebate Program to allow for reductions or waivers to the inflation rebate for certain generic drugs in the event of a shortage.
Comments on the draft are due to the Committee on June 2, 2024.
Senate committee hearing on weight loss drug prices
On April 24, 2024, the Senate Health, Education, Labor, and Pensions Committee (HELP) Chairman sent a letter to the Novo Nordisk Chief Executive Officer concerning the list and net prices of Ozempic and Wegovy. The Chairman requested information about the following:
- Costs and volumes of the drugs sold
- Prices paid by government payers
- Revenue Novo Nordisk has made from selling the drugs
- Manner in which prices are determined, and
- Research and development expenditures linked to the drug
On May 16, 2024, the Senate HELP Committee issued a report that found that higher uptake of Wegovy and new weight loss drugs among adults with obesity at current net prices could lead to an unprecedented increase in prescription drug spending. The report also found that the magnitude of savings new weight loss drugs will achieve relative to their price appears to be overstated.
Senate Judiciary Committee hearing on prescription drug competition
On May 21, 2024, the Senate Judiciary Committee titled, “Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market.” The hearing largely focused on curbing abuses of the patent system by drug companies to improve competition between brand drugs and generics and biosimilars.
Senators introduce the electronic prior authorization for Prescription Drugs Act
On May 17, 2024, a group of bipartisan Senators, including U.S. Senators Roger Marshall, M.D. (R-KS), Ben Ray Luján (D-NM), Roger Wicker (R-MS), Sheldon Whitehouse (D-RI), and Joe Manchin (D-WV), introduced legislation that would establish an electronic prior authorization (e-PA) process for commercial plans.
House activity
PBM reform
On May 8 and May 16, 2024, the House Committee on Ways & Means and the House Committee on Energy and Commerce, respectively, advanced legislation extending authorities for telehealth services and other home-based healthcare services in Medicare. Embedded in both pieces of legislation are provisions that would mandate PBMs be compensated only bona fide service fees under Medicare Part D.
Conclusion
We hope you found this summary of federal legislative and regulatory activity helpful. While topics that legislators and regulators are focusing on are constantly evolving, this summary captures many of the issues that are currently in review.
The information above is current as of May 23, 2024.
