The trade coalition representing pharmacy benefit managers is raising concerns about major bipartisan legislation aimed at streamlining the approval of new medicines and medical devices. However, the Pharmaceutical Care Management Association’s (PCMA) opposition to the legislation is not about the content of the bill but rather how Congress intends to pay for it.
The 21st Century Cures Act (Cures bill) seeks to overhaul the FDA’s drug and medical device approval processes. It would also provide significant funding increases for the FDA and the National Institutes of Health. Further, the legislation would place greater regulatory attention on personalized medicine and rare diseases. Members of Congress on both sides of the aisle, many industry experts, and patient advocacy organizations consider this legislation a significant and needed reform to the FDA’s regulatory system. In a display of bipartisanship, the House Energy and Commerce Committee passed the Cures bill out of committee with a unanimous 51-0 vote.
While some critics are concerned about the substantive provisions of the bill, a growing number of stakeholders disapprove of how the bill’s sponsors want to pay for it. It is not uncommon for legislation to run aground due to legislators’ disagreements over so-called pay-fors, the provisions detailing how a bill will be financed. Since 2007, Congress operates under Pay-As-You-Go (PAYGO) rules. Under PAYGO, Congress cannot pass a bill that adds to the deficit or undoes deficit reduction measures without identifying an offset. The Cures bill’s price tag is more than $13 billion.
The PCMA opposes one of the current pay-fors provided for in the legislation: a payment delay for Medicare Part D prescription drug plans. In a statement released on its website, the PCMA stated that “[i]f the 21st Century Cures initiative can only be advanced by cutting billions from America’s premier health program – Medicare – then its costs outweigh any potential benefits it may yield down the road. Leveraging payments to Part D plans to fund this legislation ironically could have the unintended consequence of making it harder for beneficiaries to access the very medicines that 21st Century Cures seeks to advance.”
The proposed pay-for saves the federal government money by delaying when the government makes payments to Part D providers. Currently, government reinsurance funds pay Medicare Part D plans several weeks before the plan spends the money on medical care. This structure allows the Part D plans to accrue interest on the funds, which they can spend on their beneficiaries. These advance payments are considered to grow the deficit because the government could earn the interest instead. The Medicare Part D payment delays are estimated to save $5 to $7 billion over 10 years, offsetting half of the Cures bill.
Opposition to the Medicare Part D plan pay-for is growing. As recently as June 17th, 44 House members sent a letter to Speaker John Boehner and Minority Leader Nancy Pelosi expressing support for the current Part D reinsurance payment structure and concern for restructuring the program to be used as an offset. This bipartisan opposition to the pay-for may complicate the schedule for the Cures bill’s next vote.
The House Energy and Commerce Committee vote is a vital step forward for the legislation, but is not the final obstacle. The Cures bill still faces hurdles prior to final passage, including a potential vote in the House Ways and Means Committee and the Senate Health Education Labor and Pension Committee. It is anticipated that the House Ways and Means Committee will vote on the Cures bill later this summer.