Comparing the Recent Drug-Pricing Reform Proposals

If lawmakers’ desire to lower drug prices can be measured by the number of bills they introduce, it seems fair to say their desire is strong. In the past few days, a number of bills have either been introduced or re-introduced, while another will be formally considered this week. At least two of the bills have bipartisan support, and a third, while introduced only by Republican members of Congress, consists largely of provisions that have previously garnered bipartisan support. These bills include 70 distinct measures intended to reduce spending on prescription drugs in one way or another.

These bills are:

  • S. 2543, the Prescription Drug Pricing Reduction and Health and Human Services Improvements Act, a bipartisan bill from the Senate Finance Committee;
  • S. 1895, the Lower Health Care Costs Act, a bipartisan bill from the Senate Health, Education, Labor, and Pensions (HELP) Committee;
  • H. R. 19, the Lower Costs, More Cures Act, from the House Republicans of the Energy and Commerce, Ways and Means, Education and Labor, and Judiciary Committees; and
  • H. R. 3, the Lower Drug Costs Now Act, from Speaker Nancy Pelosi, which will be considered this week and which includes what would arguably be the most sweeping changes to how the United States pays for drugs to date—including implementing federal negotiation of drug prices.
  • S. 3129, the Lower Costs, More Cures Act, from Sens. Crapo, Burr, Enzi, Tillis, and Barrasso, which largely mirrors H.R. 19.

This analysis compares these bills and notes the most significant reforms they are proposing. While there are unique parts to each bill, the bills’ provisions overlap significantly.

Past AAF Analyses of These Drug-Pricing Reform Proposals

A summary of the original version of the Senate Finance bill can be found here; aside from tweaks to the Medicare Part D benefit design reforms, the revised bill is largely similar to the original. A summary of the drug pricing provisions originally included in the Senate HELP legislation is here; this legislation also includes provisions to address surprise billing and a number of public health measures.[1] Most of the provisions included in H.R. 19 can be found in either the Finance or HELP packages or were included in various other bills previously considered by Congress. Further, many of the provisions in these bills are similar to proposals that the administration has put forward.

Most Notable Reforms

Federal Negotiation of Drug Prices

H.R. 3 includes new authorities for the Secretary of Health and Human Services to negotiate the price of drugs directly, using as a benchmark a weighted average of the international prices of such drugs, as explained here. This proposal is similar to a proposal from the administration to establish an International Pricing Index. The bill would authorize the secretary to negotiate prices on up to 250 drugs annually (the 125 most expensive drugs provided under each Medicare Part B and Part D).

Medicare Part B and Average Sales Price

Most of the Medicare Part B provisions focus on tweaks to the average sales price (ASP) payment methodology used for provider-administered drugs, with the changes seeking to encourage the use of lower-cost drugs, including biosimilars. One unique provision of note from H.R. 19 is section 103, which provides for variation in the Medicare Part B ASP payment rate based on the drug’s price per beneficiary. If a drug’s per beneficiary charge ranks in at least the 85th percentile, the Medicare payment would be reduced to 104 percent of ASP (rather than the currently standard 106 percent). For drugs ranked in the 70th to 84th percentiles, payment would continue to be 106 percent of ASP. For drugs in the 50th to 69th percentiles, payment would increase to 108 percent of ASP. Finally, for the half of drugs with the lowest per beneficiary charges, payment would increase to 110 percent of ASP.

The Benefit Structure of Medicare Part D

The most significant Medicare Part D provisions are those that would reform the benefit structure, similar to the proposal first put forward by AAF in 2018. S. 2543, H.R. 3, and H.R. 19 all include such a reform, with some differences. The key components included in each of these proposals include providing beneficiaries an out-of-pocket cap, reducing the government’s reinsurance liability in the catastrophic phase, and requiring drug manufacturers to pay a share of the costs incurred in the catastrophic phase.

While each of the proposals sets slightly different parameters (which will result in substantial differences in the impact, particularly to the pharmaceutical industry), the various proposals are now more similar to each other than when originally introduced. The most significant change was a tweak to the Senate Finance bill which now would require drug manufacturers to cover a share of the costs in the initial coverage phase (7 percent) in addition to their liability in the catastrophic phase (now set at 14 percent). H.R. 3 would require manufacturers to cover 10 percent of costs in the initial coverage phase and 30 percent in catastrophic, while H.R. 19 would require a 10 percent manufacturer liability in both phases.

Other Notable Reforms

Finally, other measures include provisions aimed at increasing price transparency (including around discounts and rebates obtained by pharmacy benefit managers); increasing competition in the supply of drugs by making it easier for new products to come to market; and reforms to the Medicaid Drug Rebate Program.

Comparing Specific Provisions

Below is a comparison of the various bills showing, by section number, the significant overlap and few areas of uniqueness. Some of the areas where there is a lack of unanimous overlap is a function of a particular committee’s lack of jurisdiction rather than a lack of support for such a provision. Shaded blocks (found in the attached PDF at the end) or bolded numbers (below) denote areas where the bills include similar, but slightly different, provisions; otherwise, the provisions are identical or nearly identical.

Provision Finance

(S. 2543)


(S. 1895)

Pelosi (H.R. 3) House R’s

(HR 19)


S. 3129


Medicare Part B    
Improving ASP reporting 10101    
Inclusion of manufacturer coupons in determining ASP 10102    
Revised payment for biosimilars during initial period 10103 501 106
Temporary increase in Part B payment for biosimilars 10104 601    
Improvements to site-of-service price transparency 10105 101 101
Part B price inflation rebate 10106 201    
Refunds for unused drugs 10107 102 102
OIG report on bona fide service fees 10108    
Establishing a maximum add-on payment for Part B drugs 10109 104 104
Treatment of drug admin services by certain off-campus providers 10110 105 105
GAO study on ASP 10111 502 108
Providing for variation in ASP add-on payment 103 103
Authority to use alternative payment models to prevent drug shortages 10112    
Government “negotiation” of drug prices via international reference pricing 101-102    
Medicare Part D    
Part D Redesign 10121 301 121 111
Maximum monthly OOP cap 10121A 302 133 114
$50 monthly cap on insulin costs 134 115
Requiring rebate pass-through at the point-of-sale 10121B 206    
Growth rate of OOP threshold (delaying OOP “cliff”) 135 116
Providing MedPAC/MACPAC drug pricing and utilization information 10122 141 205
Public disclosure of drug discounts and PBM provisions 10123 112 202
Public disclosure of DIR review and audits 10124    
Requiring increased use of real-time benefit tools 10125 116 117
Improving provision of A&B claims data to PDPs 10126    
Permanent reauthorization of retroactive Part D coverage for LIS beneficiaries 10127 131 112
Part D price inflation rebates 10128 202    
Prohibiting branding on Part D benefit cards 10129    
Requiring plans to report potential waste/fraud/abuse to HHS 10130 503 118
Establishment of standard pharmacy quality measures 10131 303 504 119
New star ratings for access to biosimilars 10132    
HHS study on influence of manufacturer 3rd party reimbursements hubs on prescribing practices 10133    
Allowing the offering of additional PDPs 132 113
Policies to lower costs for low-income beneficiaries Title IV    
Drug manufacturer price transparency 10141 114 201
PBM transparency 10142 206    
Drug pricing dashboards 10143 212    
Improving coordination between FDA/CMS 10144 505 402
Patient consultation in Medicare coverage decisions 10145 506  
GAO study on Medicare/Medicaid spending due to copay coupons 10146    
MedPAC report on shifting drugs from B to D 10147 507 403
Treaty obligations 10148    
Reporting on excessive price hikes 10141 412 501 111  
Study on pharmaceutical supply chain 213 113  
Making drug marketing sample info available 115 204
Requiring DTC ads to include truthful and non-misleading price information 508 404
Create Chief Pharmaceutical Negotiator at USTR 509 405
Waiving Medicare coinsurance for colorectal cancer screening 510  
Medicaid P&T committee improvements 10201 202  
Improving reporting requirements and developing standards for use of drug review boards 10202    
GAO report on conflicts of interest in state P&T committees 10203 203  
Ensuring accuracy of price information in MDRP 10204 204  
Excluding authorized generics from AMP 10205    
Preventing use of spread pricing in Medicaid 10206 206 205  
T-MSIS data reports 10207 206  
Risk-sharing VBPs for outpatient drugs 10208 207  
Modification of maximum rebate under MDRP 10209 201  
Applying MDRP to drugs included in hospital bundled payments 10210 208  
Purple Book reforms for patent transparency 401 331-332  
Orange Book modernization 406 341-342  
Streamlining transition to biologic products 403 361  
No new exclusivities for new biologics 402 391  
Biosimilars can show proposed indications have been previously approved for reference product 404 393  
Education on biosimilars 405 351 107
BLOCKING Act 407 321  
Clarifying meaning of new chemical entity 408 394  
Orphan Drug designation clarification 409 392  
New FDA authority for generic label safety information 410    
CREATES Act 411 301-303  
Pay-for-Delay prohibition 311-315  
OTC drug review regulations 370-382  

[1] The surprise billing provisions have been revised since this summary from AAF was written in July 2019 to reflect a bipartisan, bicameral compromise. The new provisions include the establishment of an in-network benchmark rate upon which patients’ cost-sharing would be based, as well as the option for parties to use an independent dispute resolution (binding arbitration) for bills exceeding $750.

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