Reconciliation Bill Focuses on Health-Care Provisions

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Update: On August 7, 2022, the Senate passed the Inflation Reduction Act (IRA), a broad climate, tax, and health-care reconciliation bill, with a vote of 51 to 50. During a review of the IRA, the Senate parliamentarian removed provisions from the bill that would have required drug companies to pay a rebate for drugs on the commercial market if their prices increase faster than the rate of inflation. A consumer spending cap on insulin on the commercial health insurance market was also removed during Senate floor debate on the legislation.

The bill includes federal investments in energy security, addressing climate change, and deficit reduction. These investments will be paid for by implementing a 15% corporate minimum tax, taxing stock buy-backs, and strengthening Internal Revenue Service enforcement.

The House of Representatives reconvened on August 12, 2022, to consider and vote on the legislation, which was passed. On August 16, President Biden signed the bill into law.

In early August, the U.S. Senate was poised to consider the Inflation Reduction Act, which included multiple drug pricing provisions that would impact cancer care. The legislation made proposals similar to those included in the Build Back Better Act (BBBA), which was passed by the House of Representatives in 2021 but failed to move in the Senate.

ASCO supported the bill’s aim of reducing the cost of prescription drugs and lowering patient out-of-pocket costs. However, in a recent letter to Senate leadership, ASCO and several other specialty societies expressed concern that the drug price negotiation provision will negatively impact patient access to critical prescription drugs under Medicare Part B and asked that Congress take steps to offset cuts to Part B reimbursement.

Key provisions in the legislation that would impact cancer care include:

  • Drug Price Negotiation: The final proposal directs the Department of Health and Human Services (HHS) to negotiate the price of a set number of drugs within Medicare Part B and Part D. HHS would be directed to negotiate a specific number of drugs every year, rather than “up to” the required number of drugs. Additionally, the first year of negotiation has been moved to 2023 (from 2024 in BBBA, and negotiated prices will go into effect in 2026 (compared to 2025 in BBBA).
  • Prescription Drug Inflation Rebates: Medicare Part D inflation rebates would begin October 2022 (vs July 2022 in BBBA). The start date for Part B inflation rebates remains January 2023.
  • Medicare Part B Coinsurance Protection: Application of an inflation growth cap to beneficiary coinsurance in Part B would begin in April 2023 (compared to January 2023 in BBBA).
  • Medicare Part D: Proposals remain for an out-of-pocket cap and other updates, including the following: (1) beneficiary maximum out-of-pocket cap begins in 2024; (2) starting in 2024, beneficiaries would owe $0 out-of-pocket in the catastrophic phase; by 2025, beneficiary total out-of-pocket spending for Part D drugs will be capped at $2,000 per year; (3) the income threshold for eligibility for the Part D low-income subsidy has been expanded from 135% to 150% of the federal poverty level; (4) redesign of Part D benefit will take place in 2025 (vs 2024 in BBBA); (5) premium growth will be capped at 6% per year through 2029 (instead of 4% through 2027 as proposed in BBBA); (6) HHS will be authorized to make a one-time adjustment to the beneficiary Part D premium percentage in 2030 to provide longer-term beneficiary premium protection; (7) $0 cost-sharing for vaccines will go into effect in January 2023; (8) repeal of the rebate rule will begin January 2027.
  • Affordable Care Act (ACA): Premium tax credits would be extended. 

ASCO continues to have serious concerns about the changes to Part B and Part D reimbursement that would result from drug price negotiation. The Association closely monitored the reconciliation package as it moved through Congress and weighed in on issues related to cancer care. ASCO will continue to work with Congress and the Administration to advocate for policies that better address high drug costs without compromising patient access to cancer care.