Post by icemandios on Jan 18, 2022 16:44:04 GMT
CBO: Medicare negotiations will hamper drug development more than previously thought
Zachary Brennan
Senior Editor
As President Biden’s Build Back Better Act — and, with it, potentially the Democrats’ last shot at major drug pricing reforms in the foreseeable future — remains on life support, the Congressional Budget Office isn’t helping their case.
The CBO last week released a new slide deck, outlining an update to its model on how Medicare negotiations might take a bite out of new drugs making it to market. The new model estimates a 10% long-term reduction in the number of new drugs, whereas a previous CBO report from August estimated that 8% fewer new drugs will enter the market over 30 years.
“The results differ from the results of the August 2021 working paper because of technical improvements to the model that now allow it to account for,” CBO said, noting three new factors: “the policy’s effects on financing costs, its effects on decisions made during preclinical development, and an accelerated approval process.”
Like the updated model, that prior report evaluated House Speaker Nancy Pelosi’s drug pricing provisions, which were generally the basis for what’s included in the BBBA, and which CBO said previously would result in 59 fewer new drugs over three decades.
CBO warns of almost 60 fewer new drugs over three decades with Medicare drug negotiations bill
Under the new model, the pricing provisions would have little effect in the first decade after the bill’s enactment, CBO says, but a 10% reduction over the long run would mean that whereas the old model saw 34 fewer drugs in the third decade, this new model would see 40 fewer drugs.
The new model also shows how drugs approved under the FDA’s accelerated approval program would see larger decreases in earlier phase trials compared to drugs obtaining a standard approval.
What this updated CBO model means in terms of the likelihood that drug pricing provisions are enacted remains unknown. Just before Christmas, Sen. Joe Manchin derailed Democrats’ efforts to finish what the House had started and pass the BBBA, but he has maintained his support for the drug pricing provisions.
Alex Lawson
Alex Lawson, executive director of Social Security Works who has worked closely on the Hill on the BBBA, told Endpoints News that he thinks the drug pricing provisions will remain in whatever scaled back legislation that eventually gets passed, because Medicare negotiations are “one of the most solid provisions” in the trillion-dollar-plus package.
“Nothing has really changed for 4 or 5 months. Just continue negotiating for Manchin’s vote,” he said. But he also warned that if Democrats try to pass Medicare negotiations as a standalone bill, that would likely end up as “a very big failure.”
Zachary Brennan
Senior Editor
As President Biden’s Build Back Better Act — and, with it, potentially the Democrats’ last shot at major drug pricing reforms in the foreseeable future — remains on life support, the Congressional Budget Office isn’t helping their case.
The CBO last week released a new slide deck, outlining an update to its model on how Medicare negotiations might take a bite out of new drugs making it to market. The new model estimates a 10% long-term reduction in the number of new drugs, whereas a previous CBO report from August estimated that 8% fewer new drugs will enter the market over 30 years.
“The results differ from the results of the August 2021 working paper because of technical improvements to the model that now allow it to account for,” CBO said, noting three new factors: “the policy’s effects on financing costs, its effects on decisions made during preclinical development, and an accelerated approval process.”
Like the updated model, that prior report evaluated House Speaker Nancy Pelosi’s drug pricing provisions, which were generally the basis for what’s included in the BBBA, and which CBO said previously would result in 59 fewer new drugs over three decades.
CBO warns of almost 60 fewer new drugs over three decades with Medicare drug negotiations bill
Under the new model, the pricing provisions would have little effect in the first decade after the bill’s enactment, CBO says, but a 10% reduction over the long run would mean that whereas the old model saw 34 fewer drugs in the third decade, this new model would see 40 fewer drugs.
The new model also shows how drugs approved under the FDA’s accelerated approval program would see larger decreases in earlier phase trials compared to drugs obtaining a standard approval.
What this updated CBO model means in terms of the likelihood that drug pricing provisions are enacted remains unknown. Just before Christmas, Sen. Joe Manchin derailed Democrats’ efforts to finish what the House had started and pass the BBBA, but he has maintained his support for the drug pricing provisions.
Alex Lawson
Alex Lawson, executive director of Social Security Works who has worked closely on the Hill on the BBBA, told Endpoints News that he thinks the drug pricing provisions will remain in whatever scaled back legislation that eventually gets passed, because Medicare negotiations are “one of the most solid provisions” in the trillion-dollar-plus package.
“Nothing has really changed for 4 or 5 months. Just continue negotiating for Manchin’s vote,” he said. But he also warned that if Democrats try to pass Medicare negotiations as a standalone bill, that would likely end up as “a very big failure.”