The revenue provisions of the US Senate Finance Committee’s draft health reform proposals would establish a fee of $2.3 billion to be paid every year by the drug industry, starting from 2010.
The fee would be allocated by market share, says the draft, which would also impose annual fees of $4 million on medical device manufacturers, $6 billion for health insurance providers and $750 million for clinical laboratories.
The draft was sent this week by Committee chairman Max Baucus to a group of Senators on the Committee known as the Bipartisan Six, for their consideration. The Senate Finance Committee is the only panel in either chamber with jurisdiction which has yet to unveil a health reform bill, and Sen Baucus has pledged to do so next week, whether this is with Republican support or not.
None of the other bills – approved by the Senate Health, Education, Labor and Pensions (HELP) Committee, and the House Education and Labour, Ways and Means and Energy and Commerce committees – have Republican backing, and Senator Charles Grassley, leading Republican on the Finance panel, pointed last week to their “dramatic shortcomings.”
According to the Congressional Budget Office (CBO), none of these bills would reduce the growth in health care costs “and would add hundreds of billions more to the federal deficit,” he said.
In June, Sen Baucus announced an agreement with the Research & Pharmaceutical Manufacturers of America (PhRMA) under which drugmakers would provide $80 billion in health care savings over 10 years, including 50% discounts off the price of brand-name drugs provided under the Medicare prescription drug benefits for older Americans and some disabled people, once they reach the “doughnut hole” gap in coverage.
This provision appears in his draft bill, as do proposals for higher increases in prescription drug rebates under Medicaid (the programme for America’s poorest) than those put forward in the other Congressional bills, with the minimum percentage for single-source and innovator multiple source drugs rising from 15.1% to 23.1% and from 11% to 13% for generics. For clotting factors and drugs approved for pediatric use only, the rebate would be increased from 15.1% to 17.1%. Orphan drugs would be excluded.
Another provision would require drugmakers and distributors to report to the government the type and amount of drug samples requested by and distributed to medical practitioners, along with the doctors’ names, addresses, professional designations and signatures. The reported information would not be made publicly available.
Commenting on the Finance Committee draft, PhRMA senior vice president Ken Johnson said that the Association had not seen the actual legislative language of the bill but noted that it did contain the industry’s $80 billion pledge.
“That’s a huge commitment which will force our companies to make some very tough choices moving forward. With the recession and ongoing challenges of discovering and developing new life-saving medicines, they are already feeling significant financial pressures. But if health care reform is going to be successful, it will require a shared sacrifice, and we have stepped up to do our part,” he said.
