Tax extenders bill may include drug discounts

Drugmakers would be forced to offer more discounts for hospitals that treat the poor under a provision that may be included in the tax extenders bill expected to be unveiled early next week.


The provision was excised at the last minute from the health reform bill under pressure from the pharmaceutical lobby but it has bipartisan support in the House and Senate.

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The provision is part of a short “wish-list” of health provisions that Democrats still hope to pass this year, said a Republican health policy consultant. The tax extenders package is seen as the last best shot to get it done.

“What I’m hearing is it’s fluid – it’s not in or out” at this point, said a Democratic consultant.

A spokesman for the pharmaceutical lobby declined to comment on hearsay: “We can’t comment on a bill that has yet to be attached.”

“Details on the final package are still being finalized,” said a House Ways and Means spokeswoman.

Under the current law, drugmakers must offer deep discounts to federally qualified health centers and other places that serve poor patients – but only for outpatient care, for patients who haven’t been admitted to a facility such as a hospital.

The Senate health reform bill would have extended the discounts to cover people in the inpatient setting. The Senate provision had the support of President Barack Obama but was removed at the 11th hour.

Now lawmakers are trying to get it through.

Hospitals eligible for the program would on average save $1.7 million per year if they could get the same discounts for their inpatient drugs “and the hospitals must devote significant time and resources managing two separate drug inventories,” four Democrats wrote to Speaker Nancy Pelosi (D-Calif.) in March – just as the drug lobby ramped up its opposition.

“There is no rational policy for requiring safety net hospitals to pay more for inpatient drugs than outpatient drugs,” the letter said.

Drug lobbyists say the provision would go beyond the original intent of the program.

The four signers – Reps. Bobby Rush (D-Ill.), Bart Stupak (D-Mich.), Kathy Castor (D-Fla.) and Carolyn Maloney (D-N.Y.) – all support Rush’s bill to expand the program to the inpatient setting. The bill has 102 co-sponsors, including several Republicans.

In the Senate, a companion measure from Jeff Bingaman (D-N.M.) has seven co-sponsors including Republicans Saxby Chambliss (Ga.) and John Thune (S.D.).

A spokeswoman for Rush said their office had “no information on what ‘movement’ may be taking place.”