CMS announces first 27 drugs with price control penalties

CMS announced the first 27 drugs to be penalized under the Inflation Reduction Act, and we fact check President Biden’s remarks about drug price controls. Plus, the long-awaited Plant Biostimulant Act was reintroduced yesterday, and we celebrate the first anniversary of ARPA-H. (621 words, 3 minutes, 6 seconds)

CMS announces penalties on 27 drugs, Biden pitches price controls – and we fact check

It was a busy Wednesday as the administration announced Inflation Reduction Act penalties on the makers of 27 prescription drugs, and President Biden said the government "won"—here’s what happened and a fact check of Biden’s remarks.

The news: Centers for Medicare and Medicaid Services (CMS) announced the first 27 drugs covered by Medicare Part B whose makers will be penalized under the Inflation Reduction Act because prices rose faster than inflation. The drug makers will be required to pay “inflation rebates” for these drugs beginning in 2025, though tabulation of rebates began in January 2023. CMS also released draft guidance on its new "negotiation" (price controls) program in Medicare.

How it will work: As of January 2023, every quarter, CMS will use the formulas described here to determine which makers of Medicare Part B drugs will owe “inflation rebates.” Tabulation for inflation rebates for Part D began in the fall of 2022. Rebates in Part D will be enforced on an annual basis, starting this fall. On the "negotiation" program, the first 10 drugs selected will be announced September 1, 2023 and the "negotiation" process will commence a month later. 

Mistruth #1: “Medicare will be able to negotiate prices,” President Biden said at the University of Nevada Las Vegas. “We’ll drive down prices because we give Medicare the power.” 

Fact check: It’s not “negotiation”—drug makers comply or face painful penalties.

Mistruth #2: “After decades of trying to take on Big Pharma, we finally, finally won,” President Biden bragged. 

Fact check: BIO’s members are 90% small- and medium-sized companies—the innovators behind most new drugs—who now face investor concerns.

BIO’s take: While Biden’s proposed expansion of price controls would be “another costly blow to the millions of patients depending on innovative cures,” said BIO’s Chief Advocacy Officer Nick Shipley last week. “BIO will continue to work alongside the current administration and lawmakers to find real policy solutions that help patients access innovative treatments.”

More Health News:

ARPA-H: On one-year anniversary, agency releases funding opportunities, site selection process, and idea competition
The Advanced Research Projects Agency for Health (ARPA-H) “announced a series of firsts that serve the agency’s mission of accelerating better health outcomes, including support of the Administration’s Cancer Moonshot initiative. Specifically, ARPA-H is issuing its first funding opportunities through an Agency-wide Open Broad Agency Announcement (Open BAA) and an idea competition called the ‘ARPA-H Dash,’ in addition to releasing its site selection strategy."

Biostimulant Act clarifies market path for needed agricultural biotech

The Plant Biostimulant Act, reintroduced in Congress yesterday with bipartisan support, would clarify regulation on biotech advances that can increase food security and reduce the use of pesticides and fertilizers.

What are plant biostimulants? Substances or microorganisms that, when applied to seeds, plants, or soil around roots, enhance nutrient uptake and efficiency, tolerance to heat or drought, crop quality, or yield—like Joyn Bio’s microbes.

Why we need them: They make agriculture more sustainable.

What’s the big deal? The global plant biostimulant market is expected to be worth $5 billion by 2025 and $9.4 billion by 2030, with U.S. interest growing. But there’s no clear regulatory path for bringing biostimulants to market.

What would this legislation do? Amend the Federal Insecticide, Fungicide, and Rodenticide Act to define plant biostimulants and exclude their regulation by that act; require the U.S. Environmental Agency to officially include this new plant biostimulant definition; require a USDA study of how plant biostimulants can enhance soil health.

Who’s behind this? It’s sponsored in the House by Reps. Jimmy Panetta (D-CA) and Jim Baird (R-IN), and in the Senate by Sens. Alex Padilla (D-CA) and Mike Braun (R-IN).

BIO’s also behind it. BIO has long supported this technology—including in the 2018 Farm Bill, when BIO joined a coalition letter explaining the need for regulatory clarity. BIO also backed this legislation when it was introduced in the previous Congress.

President Biden’s Thursday: No official events scheduled.

What’s Happening on Capitol Hill: Agriculture Secretary Tom Vilsack will appear before the Senate Agriculture, Nutrition & Forestry Committee. Jitters in the banking industry are expected to come up when Treasury Secretary Janet Yellin testifies before the Senate Finance Committee regarding President Biden’s 2024 budget proposal.