Drug Pricing Lab 09/01/2021

Senate Moves Forward with $1.2 trillion Infrastructure Bill, Includes Funding Offset from Bach’s Drug Vial Waste Research

The infrastructure bill includes a drug waste provision from the Recovering Excessive Funds for Unused and Needless Drugs (REFUND) Act, which requires manufacturers to rebate the amount wasted back to CMS. An estimated $3 billion over 10 years can be recouped and invested in roads, bridges, and other infrastructure initiatives.

The infrastructure bill heads to the House. If enacted, manufacturers might think twice about wasteful drug packaging.

On August 10th, 2021, U.S. Senators Rob Portman (R-OH) and Dick Durbin (D-IL) officially announced the passing of their bipartisan bill, the Recovering Excessive Funds for Unused and Needless Drugs (REFUND) Act in the Senate. The bill includes a measure to compel drug companies to reimburse Medicare for certain wasted medications. Specifically, it requires “manufacturers of certain single-dose container or single-use package drugs payable under Part B of the Medicare program to provide refunds with respect to discarded amounts of such drugs”. Wasted medications include leftover portions of drugs packaged in single-use vials.

Dr. Bach’s work on drug vial waste set the foundation for the bill. Many vials for infusion therapies cannot be salvaged once opened, and drugs dosed by body weight are unlikely to match the amount in vials. Further, Medicare reimbursement at 106% of ASP encourages the use of these expensive drugs even when a significant portion is ultimately thrown out. Manufacturers appear to deliberately increase the package size to ensure there are nearly always leftovers.

The REFUND Act includes provisions which would require the Department of Health and Human Services (HHS) Secretary to aggregate the total amount of discarded Part B drugs each quarter using Medicare Part B claims and calculate refunds using the Average Sales Price (or Wholesale Acquisition Cost, if ASP is not available). The drug manufacturer will be required to provide a rebate to HHS for the total amount of discarded medication recorded, above a 10% low-volume threshold. Non-compliance to provide a timely rebate could incur civil monetary penalties under this Act.

The bill is now with the House of Representatives, where it awaits further discussion and approval.

Read the entirety of the Infrastructure Investment and Job Acts bill here.
Read the Recovering Excessive Funds for Unused and Needless Drugs Act of 2021 here.


Research & Insights

We conduct non-partisan, independent research, and make our work accessible and informative to policymakers and the general audience alike. Browse our featured research or explore our work by article type.

What A Waste! The National Academy Of Medicine’s Report On…
Why Congress should not follow the National Academy of Science, Engineering, and Medicine’s recommendation to remove the JW modifier.
Health Affairs Blog 07/09/2021
Overspending Driven by Oversized Single Dose Vials of Cancer Drugs
Drug companies will make $1.8 billion this year by using package sizes that promote waste.
BMJ 03/01/2016
Production Plus Profit Pricing (P-quad) FAQ
Medicare Must Study Unproven, Expensive Alzheimer’s Drug
Medicare cannot indiscriminately cover the cost of Aduhelm for the treatment of Alzheimer's disease without first evaluating whether it truly works.
Bloomberg Opinion 06/15/2021
Value-Based Management of Specialty Drugs: Practical Considerations and Implications for…
Not all approaches are suited to meeting policy makers and health plans’ goals of managing specialty drugs based on their value. Researchers conducted a qualitative study with Blue Cross Blue Shield plans interested in implementing value-based specialty pharmacy management to observe the plans’ objectives, strategies, and factors influencing their ability to execute on these strategies.
AJMC 05/13/2021
The Drugs at the Heart of Our Pricing Crisis
The US drug pricing system is broken, but not irreparable. For large-molecule biologic drugs, enter: Production Plus Profit Pricing (P-quad, pronounced like Ahab's seagoing vessel).
NYTimes 03/15/2021
Biosimilars: Market Changes do not equal policy success
Numerous articles and reports have trumpeted biosimilar market growth, but it's critical we do not lose sight of the sole objective for creating the biosimilar market: to reduce the cost of older biologic drugs for society and taxpayers.
Drug Pricing Lab 03/15/2021
Instead of debating 'first-shot' vs 'set-aside' vaccine approaches, hospitals' study…
Hospitals could start studies of their own employees to answer important questions, including whether the first-shot approach has downsides when compared to the set-aside strategy.
STAT 01/04/2021
After 4 Years of Trump, Medicare and Medicaid Badly Need…
Many promising ideas won't work as expected, and that's all the more reason for CMS to evaluate how medical care is delivered to its patients.
NYTimes 12/01/2020
Trump's Drug-Pricing Ideas Would Cost Taxpayers a Bundle
Meanwhile, pharmaceutical companies would stand to make a lot more money.
Bloomberg Opinion 09/29/2020
We can't tackle the pandemic without figuring out which Covid-19…
There may be several Covid-19 vaccines by winter, but there will also need to be a study comparing the viruses to one another as part of rolling out widespread vaccination.
STAT 09/24/2020
CMS's Proposed Medicaid Best Price Loophole for Value-Based Purchasing of…
The administration has proposed a loophole in the Medicaid Best Price rules that would dismiss linking the drug's effectiveness to its price.
HA Blog 07/06/2020

Stay up to date on our work and news