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Omnibus Mandates Extensive Drug-Cost Report from CMS, VA

By Kerry Young, CQ Roll Call

December 16, 2015 -- The fiscal 2016 spending package requires a wide-ranging report within six months on prescription drugs purchased by Medicare, Medicaid, and Department of Veterans Affairs (VA), a sign of growing congressional interest in the costs of medicine and Americans' access to them.

Through a statement attached to the $1.15 trillion spending package (HR 2029) unveiled Wednesday, House and Senate appropriators direct the Department of Health and Human Services to work with the VA on a report on prices paid since 2003 for prescription drugs purchased through major federal medical programs. The report also is intended to evaluate access to these treatments and include an analysis of how much time and money it takes to bring new medicines to market. The report—which could generate attention presidential candidates if released publicly—is due 180 days following the enactment of this spending package, likely creating a June deadline.

The rising costs of medicines have become an increasingly political concern that has gotten traction on the campaign trail in recent months, with the extreme case of a price markup of a decades-old antifungal serving as a rallying point for a more widespread problem facing many Americans. Spending on medicines in the U.S. may reach the $560 billion to $590 billion range in 2020, a 34 percent increase from estimates for 2015, according to pharmaceutical industry consultant IMS Health Inc.

There's bipartisan interest in this report, which was suggested by Rep. Marcy Kaptur, D-Ohio. Senate appropriators revised an initial proposal for this study, which called for information on the 10 most frequently prescribed and 10 most costly medicines purchased though the VA, Medicaid and Medicare's Part B outpatient program that covers treatments administered by doctors and Part D prescription-drug plans. The final version appears to drop an earlier request to tie in information about the prices paid in foreign nations, including Canada and Mexico. That had been included in the House report (H Rpt 114-195) for the Labor-Health and Human Services-Education bill (HR 3020).

But the final version of the drug-report mandate adds a request for a detailed evaluation of how easily people in these programs can obtain needed medicines and their satisfaction with them.

Separately, the final version of the omnibus also signals support for the continued work of the Center for Medicare and Medicaid Innovation, which was created by the 2010 health law. The center is intended to fund projects carried out in doctors' offices and hospitals to test proposals for improving the quality of health care while keeping costs in check.

The center has faced criticism for drawing slowly from the $10 billion provided it in initial funding through the health law. That may have made this money an easy target for lawmakers in search of rescissions to beef up spending for favored programs. Operating under an initial tight budget cap, the House GOP appropriators had proposed rescinding the $6.8 billion in remaining funds for the center. Both the Senate draft bill (S 1695) and the final omnibus measure left these funds alone.

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