Health Policy Brief

Health Policy Brief on HR 465 Prescription Drug Price Relief Act of 2019

Introduction

In recent times, the cost of prescription medications and therapies has emerged as one of the top legislative agenda for lawmakers across the divide (Johnson, 2019). The issue of prescription drugs has even caught the attention of President Trump, who has promised to deal with the problems in a bipartisan way, while also offering proposals (Johnson, 2019). Considering the recent Congressional hearings, the rising cost of pharmaceuticals is key to their debates.

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Thus, on January 31, 2019, the Department of Health and Human Services proposed to lower the prices of prescription drugs by encouraging manufacturers to give direct discounts to patients.

Prescription Drug Price Relief Act of 2019

The Bill aims to establish a variety of oversight and disclosure requirements that relate to the prices of brand-name drugs (Text – H.R.465 – 116th Congress, 2019-2020). It calls for an annual review of all brand-name drugs for excessive pricing. Within the bill, the Department of Health and Human Services must also review the prices when a petition is filed. Under the proposal, a drug price is considered excessive if the domestic average manufacturing price goes the median price of five countries (Text – H.R.465 – 116th Congress, 2019-2020). These countries include the UK, Canada, Germany France, and Japan. Other factors that the bill focuses on for pricing are cost, revenue, and the size of the affected patient population (Text – H.R.465 – 116th Congress, 2019-2020). Thus, such factors are considered if the pricing information is unavailable in at least three countries mentioned above. Also, the bill makes it mandatory for drug manufacturers to report specified financial details for the brand-name drugs; such information includes research and advertisement expenditures (Text – H.R.465 – 116th Congress, 2019-2020).

Current Status

In its current status, the leaders of the House and Senate Committees are already conducting hearings on the drug pricing issue. The conferences have been placed open even to top executives of major pharmaceutical companies to present their testimonies (Philips, 2019). The House and Senate hearing has been able to weigh issues on several themes such as:

  • Determining the need for fairer prices through negotiations between Medicare and drug companies.
  • Considering the pharmaceutical benefit managers as unhelpful middlemen
  • A comparison of negotiations between Medicare and the VA system on possible lower prices
  • Enhanced competition in the industry characterized by transparency at every step of the process
  • Questions on the whether the effect of higher rates on reflect R& D of related companies

In the hearings, the House Oversight Democrats have criticized the industry for gouging and fixing prices by spending more on marketing and buybacks than on R&D (Johnson, 2019). However, the Republican committee has spoken against the Democrats and accused them of pushing for excessive government involvement in the healthcare sector (Johnson, 2019). They argue that Democrats should be bot fault the private sector for high prices when government intervention was behind many current price distortions (Johnson, 2019). The basis for supporting the bill is the aggressive nature with which the drug manufacturers increase prices on existing drugs and setting higher launching prices for new drugs.

Key Stakeholders

The major players in this issues are U.S. Sen. Bernie Sanders and U.S. Republican Senator Ro Khanna (Philips, 2019). These two legislators announced the need to introduce the Prescription Drug Price Relief Act for debate in Congress to ensure that prescription drug prices are reduced to affordable levels for Americans (Philips, 2019). Other stakeholders included in this debate on health policy include the CEOs of drug manufacturing companies, the Oversight Committees in the House and Senate like the House Oversight Democrats, Senate Finance and House Oversight committees, House Energy and Commerce Committee, and Oversight and Investigations Subcommittee (H.R.465 – 116th Congress, 2019-2020). President Trump has also given his proposals towards the bill and committed himself to support the law in a bipartisan approach.

Potential Impact of the Bill

If the bill passes, the Department of Health and Human Services will have to take specific measures against excessive pricing of prescription drugs. First, the HHS will have to void any government-granted exclusivity and issue open, non-exclusive licenses for the medicines (H.R.465 – 116th Congress, 2019-2020). The impact will also involve an expedition of the review of the similar applications for generic drugs and biosimilar biological products (H.R.465 – 116th Congress, 2019-2020). This will also include the creation of a public database for each prescription and its determinants.

Other than the high automatic impact that will come with the passing of the bill, there are several benefits likely to arise. First, the Director of Knowledge Ecology International contributes that the legislation will help ensure that the legal monopoly of the companies involved is at risk if the prices are excessive, instead of the patient. Also, it will also enhance government ability to end legal monopolies to curb exorbitant prices. The U.S consumers will no longer suffer excessive charges for drugs as compared to the listed countries.

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