Healthcare Reform Update: Senate Finance Committee Mark-Up Adds Tweaks Favorable to Generics; House Energy and Commerce Begins Second Mark-Up Tomorrow

By Alan M. Kirschenbaum –

The Senate Finance Committee began today to mark up its healthcare reform bill, the America’s Healthy Future Act of 2009.  In a previous post, we provided an outline of the provisions of the Chairman’s Mark that would specifically affect drug and device reimbursement, discounting, fees, and reporting.  Several of these provisions were amended today, including the following (page numbers refer to the Committee’s Modifications list):

• In one of three amendments favorable to generic drugs, the Medicaid Federal Upper Limit (FUL) provision of the Mark, which set the FUL at 175% of the weighted average of the AMPs of the therapeutically equivalent multiple source drugs, was amended to say “no less than 175%.”  Presumably, this would permit CMS to set a higher FUL if the agency deemed it appropriate, but there is no hint in the Mark of when a higher FUL might be warranted.  (p. 14)

• Another new provision favorable to generics would amend the civil monetary penalty against federal health care program beneficiary inducements (42 U.S.C. § 1320a-7a(a)(5)), which currently prohibits waivers of coinsurance except in cases of financial need.  The amendment would exempt sponsors of Medicare Part D plans to allow them to waive copayments for first fills of generic drugs as an incentive for Part D beneficiaries to try generics.  (p. 28)

• Another new provision would require the Comptroller General to review state laws that have a negative impact on generic drug utilization in federal programs due to restrictions such as limits on pharmacists’ ability to substitute generics, or carve-outs of certain classes of drugs from generic substitution.  (p. 14)

• The provision of the Mark that would impose Medicaid rebates on drugs dispensed by Medicaid managed care organizations was amended to exclude drugs purchased through the 340B program.  (p. 14)

• The provision that would have made prescription drug coverage mandatory for all Medicaid beneficiaries was stricken.  (p. 14)

The Senate Finance Committee will continue its mark-up tomorrow and hopes to conclude it by Sunday evening.

Meanwhile, in the House, the Energy and Commerce Committee will begin its second mark-up of its healthcare reform bill, H.R. 3200 (see our earlier post on this bill), and has released a list of amendments it will be considering.  One of these appears similar to the amendment described above that would exclude 340B drugs dispensed by Medicaid managed care organizations from Medicaid Rebate liability.  Others include an amendment to enhance compliance by manufacturers and covered entities under the 340B program, and a change that would appear, based on the brief description, to narrow the preemption provisions of the physician payments sunshine section of the bill.

We will continue to report on these bills as they work their way through Congress.