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.

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