House Bill Would Require Manufacturer Rebates

Last week, US Reps. George Miller (D-CA), Charles Rangel (D-NY), and Henry Waxman (D-CA) introduced the America’s Affordable Health Choices Act (H.R. 3200) to reform the nation’s healthcare system. The bill meets President Obama’s goals of lowering costs, preserving choice, and expanding access to care, said Miller at a press conference. Several aspects of the bill would affect the manufacturers of pharmaceuticals and biopharmaceuticals.

Beginning in 2011, the bill would progressively increase Medicare Part D’s initial coverage limit and decrease the annual out-of-pocket threshold until the “doughnut hole” in coverage was eliminated. The bill would require drug manufacturers to provide the government rebates for each medicine for any full-benefit dual eligible person covered by Part D. In addition, drugmakers would have to provide a discount of 50% of the amount of the drug-component negotiated price for qualifying drugs. The bill also would extend prescription-drug discounts to Medicaid managed-care enrollees.

Drugmakers also would be required to provide annual reports of all payments they make to physicians beginning on March 31, 2011. The reports would include recipients’ names, the form of payments (e.g., cash, stock, or drug samples), and the amount of the payments. The provisions in the bill are similar to those in The Physician Payments Sunshine Act, S. 301, which was introduced by Sen. Chuck Grassley (R-IA).

In addition, the bill would require the establishment of a Center for Comparative Effectiveness Research, which would seek to identify the most effective and appropriate treatments for diseases. The bill would set aside $90 million for the Center for fiscal year 2010.

Reps. Miller, Rangel, and Waxman are the chairman of the House Committee on Education and Labor, the chairman of the Committee on Ways and Means, and the chairman of the Committee on Energy and Commerce, respectively. The House Committees on Education and Labor and on Ways and Means passed H.R. 3200 on July 17, 2009. The Energy and Commerce Committee is currently marking up the bill.