Illustration: Sarah Grillo / Axios
The House GOP reconciliation bill includes a provision that would expand the number of drugs exempt from Medicare drug price negotiations.
Why it matters: Backers say the provision would encourage innovation to treat rare diseases, but drug pricing advocates say it amounts to a handout to pharmaceutical companies.
Driving the news: The bill would expand an existing carve-out for "orphan" drugs that treat rare diseases.
- Currently, orphan drugs that treat one rare disease are exempt from Medicare drug price negotiations. The bill would broaden that to include drugs that treat two or more rare diseases or conditions.
What they're saying: The Biotechnology Innovation Organization called the measure a "pro-patient, pro-innovation proposal."
- "Unintended consequences should never stand between patients and the new treatments and cures they desperately need," the group said in a statement.
- Merith Basey, executive director of Patients for Affordable Drugs, countered that the measure is "simply put, a giveaway to pharma."
- "Americans are asking Congress to do more to lower drug prices, and believe that drug prices are far too high," she added. "This is going exactly in the opposite direction that voters are demanding."
- CBO finds the change will cost $4.8 billion over 10 years.
The big picture: Although the provision would benefit some manufacturers, drug companies did not get everything they wanted in the reconciliation package.
- The bill does not address what industry terms the "pill penalty," which would involve syncing the length of time that small molecule drugs and biologics are exempt from negotiations.
- House Republicans did not include President Trump's "most-favored nation" policy to equalize U.S. drug prices with those in other developed countries — which the industry vehemently opposes.
- Republicans remain uncomfortable with the idea of government price-setting, though Trump could still implement the policy through executive action.
Between the lines: The standalone version of the orphan drug bill, sponsored by Rep. John Joyce, does have a handful of Democratic cosponsors, including Rep. Don Davis.
- Joyce said the measure helps ensure "millions of Americans with rare diseases can continue to have hope for the future" when he introduced the measure in February.
- A spokesperson for Energy and Commerce Democrats said the provision is "just another example of Republicans taking people's health care away and making prescription drugs more expensive in order to give handouts to giant corporations."
