September 27, 2021

Reduced Costs and Continued Cures Act

How it Could Work

The Reduced Costs and Continued Cures Act (RCCCA), introduced by Representatives Scott Peters (D-CA 52) and Kurt Schrader (D-OR 5) aims to lower drug costs for patients without risking future innovative cures. One provision in the bill establishes payment rules for negotiation eligible drugs and biologics (Sec. 101). For this survey, experts were asked to limit their analysis to that section of the bill.

RCCCA would permit Medicare negotiation on a limited subset of Medicare Part B drugs and biologics that no longer have any FDA exclusivity protections and for which any patents issued up to 1 year after approval have expired. The price for an eligible drug or biologic is then negotiated for by the Secretary of HHS and the manufacturer. If the Secretary and manufacturer cannot agree on a maximum allowable price, the Secretary determines the maximum allowable cost between 65-75% the Average Sales Price (ASP) in the year before negotiation.

What the Experts Think

The CIDSA experts agreed that the Reduced Costs and Continued Cures Act would reduce drug spending; 7 experts believe the policy would minimally reduce spending, while the other one believes it could moderately reduce spending. While they do not believe the policy would affect list prices, the experts unanimously agreed that it would moderately decrease drug net prices. The panel also unanimously agreed that the RCCCA would moderately increase drug access for Medicare beneficiaries, while there would be no change in access for other patient groups.

All of the experts opined that Rep. Peters and Schrader’s bill would advance drug spending policy, but were spilt on if it would be a minimal or moderate advancement. The experts agreed that the ability to be implemented and the precedent-setting value of the policy should be considered strengths. The size of the affected population and the magnitude of the impact that it would have on drug spending are both weaknesses, while experts were unable to determine if the evidence base in support of the policy is a weakness or strength.

Only 8 experts were able to participate in this survey.

How likely would this policy be to reduce drug spending?
Would Increase Drug Spending
Would Not Affect Drug Spending
Would Minimally Reduce Drug Spending
Would Moderately Reduce Drug Spending
Would Significantly Reduce Drug Spending
Would Substantially Reduce Drug Spending
How likely would this policy be to reduce drug prices?
Would Significantly Increase Drug Prices
Would Moderately Increase Drug Prices
Would Not Affect Drug Prices
Would Moderately Decrease Drug Prices
Would Significantly Decrease Drug Prices
List Prices
Net Prices
How likely would this policy be to increase patient drug access?
Would Significantly Reduce Drug Access
Would Moderately Reduce Drug Access
Would Not Affect Drug Access
Would Moderately Increase Drug Access
Would Significantly Increase Drug Access
Rare Disease
Large Patient Groups
How significant is this policy in the evolution of US drug spending policy?
Does Not Advance Drug Spending Policy
Minimally Advances Drug Spending Policy
Moderately Advances Drug Spending Policy
Significantly Advances Drug Spending Policy
Ground-Breaking Shift in Drug Spending Policy
What are strengths and weakness of this policy?
Size of Affected Population
Evidence Base in Support of Policy
Precedent-Setting Value
Magnitude of Drug Spending Impact
How important are the following in your analysis of the policy's impact?
Not Important
A Little Important
Somewhat Important
Very Important
Impact on new innovation
How patents on biologics will be identified
Which patents or market exclusivities will take precedence for defining eligibility
May increase incentives for companies to over-patent
Ability of manufacturers to manipulate ASP in the year before negotiation
Brand manufacturers could create their own biosimilar or generic to prevent triggering the penalty
Unclear how line extensions or additional indications would be handled

Considerations for Policymakers

The expert panel highlighted several policy concerns for policymakers to consider. Most notably, the uncertainty surrounding which patents or market exclusivities would take precedence for defining eligibility for negotiation, if the policy would increase incentives for companies to over-patent their products, and how manufacturers could manipulate their ASP in the year before they are eligible for negotiation. Another key consideration is that brand manufacturers could create their own biosimilar or generic products to prevent the penalty. Policymakers should also consider the possible impact this could have on innovation, how biologic patents would be identified, and how line extensions or additional indications would be handled under this policy.