House Ways and Means Committee Chair Richard Neal (D-Mass.) will broach the idea of using arbitration to give HHS leverage with drug manufacturers over prices in a hearing next Tuesday.
The committee plans to convene a hearing to discuss a bipartisan set of bills aimed at drug price transparency, the chairman said. But he said that he and the panel's Ranking Member Kevin Brady (R-Texas) have discussed arbitration "in a general way" in their regular talks. He described those talks as "fluid," but confirmed that a policy like arbitration is possible.
Brady told Modern Healthcare he has just begun to look at the policy, and declined to signal what his position might be.
Neal's comment came as Democrats are getting antsy for discussion of more sweeping policy that gets at their party's promises on drug price negotiation, and as lawmakers from both parties feel out how far they're willing to go on a package that has the backing of the White House yet also needs to navigate the demands of House Democratic progressives and the GOP-led Senate.
Whatever policy the House settles on needs to originate through the committee process, said Drew Hammill, deputy chief of staff for House Speaker Nancy Pelosi (D-Calif.). The Ways and Means and Energy and Commerce committees share jurisdiction over the issue.
Tuesday's hearing will be the first legislative discussion for Ways and Means, while the Energy and Commerce Committee on Wednesday reached bipartisan agreement on measures to boost generic competition.
"I don't know what the hesitation is personally," Rep. Peter DeFazio (D-Ore.) said, regarding the lag in introducing a more sweeping policy. "The people dislike drug companies more than they do Congress, and if we took on the drug companies, they may even like us a little better."
Rep. Peter Welch (D-Vt.), who sits on the Energy and Commerce Committee, said lawmakers need to "land the ship at some point." As work continues, he expects to get more specifics on whether Democrats land on a formulary or arbitration as the Medicare leverage with drug companies.
Still, he said he worries the final deal could ultimately fail to give that leverage to HHS.
"The bottom line is, I think we probably will get to the point where people like me want to do a good deal more than our counterparts," he said. "But we'll see, and I think it's going to be whatever we can do together. That's good, it gives a foundation, but at the end of the day we've got to have real authority for the secretary to do on behalf of American consumers and taxpayers what all other countries do, as a counterweight to the monopoly pricing."
Much of the task for generating enthusiasm among Republicans could fall to the White House. The administration raised conservatives' eyebrows last fall when it announced a proposed demonstration to set an international reference price for Medicare Part B drugs.
"I want to work with Democrats and the administration," said Rep. Gus Bilirakis (R-Fla.), who sits on the Energy and Commerce Committee.
He said he is open to an arbitration policy and he hopes Congress can coalesce around a substantive idea because "of course my constituents want that more than anything."
While talk ramps up about arbitration, it's still unclear whether that will be the policy lawmakers will settle on, and also which committee will propose the "bold" policies Democrats hope for.
In Ways and Means, the leader of the health subcommittee is Rep. Lloyd Doggett (D-Texas). He has a bill that would let HHS license generics if a brand manufacturer doesn't agree to a price deemed reasonable. It has the support of progressive Democrats, but is considered a nonstarter because it lets the HHS secretary override patent exclusivity rights.
In Energy and Commerce, Rep. Anna Eshoo (D-Calif.) chairs the health panel. Last week she told Modern Healthcare she is focused for now on the measures currently moving through the committee.
Meanwhile, House progressives are rallying around Doggett's bill, as they told Pelosi's health deputy Wendell Primus in a Tuesday meeting.
Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) said her group's discussion with Primus largely didn't yield any breakthroughs, but that lawmakers articulated their position.
"We have been very clear that we need a bold solution to the drug pricing issue," Jayapal said. "It's off the charts for our constituents across the country, so we wanted to make it very clear that it needs to be something bold that has teeth in it. And I believe that is what Rep. Doggett's bill has in it."
When asked for a sense of where leadership stands in terms of its ambitions, she said it's "hard to know."
For all the Democratic momentum, the GOP-led Senate also needs to be convinced for anything to pass. Rep. Tom Reed (R-N.Y.), who sits on the Ways and Means Committee and co-chairs the moderate bipartisan Problem Solvers Caucus, expressed skepticism that anything hinting at Medicare negotiation could secure enough support.
He said ideas such as arbitration require "a longer conversation" and right now he thinks it's more realistic to focus on transparency measures given the need for 60 votes in the Senate for any bill.
"Before we get to that bigger debate and more complicated debate about how do you reincentivize or restructure the Medicaid and Medicare programs to force prices to go down, you've got to get the data so we go in with the best information possible," he said.
Still, the White House remains the wild-card factor for Republicans and drug pricing reform is the administration's top agenda item.
"We share the common interest of lowering drug prices and are having ongoing conversations to see where we can work together," a White House official said of the administration's meetings with Pelosi's office, although he did not disclose specifics.