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Massive House Bill Proposes Mandatory Coverage of COVID-19 Vaccines and Therapies

As the COVID-19 public health crisis continues, it is sometimes easy to forget what issues were at the forefront of our national conversation before the pandemic.  It was mere months ago when Congress appeared to be edging closer to a deal on legislation addressing drug pricing. While the focus on drug pricing issues may have shifted of late, the American public’s access to drugs—and, more recently, vaccines—remains a critical public health issue, perhaps now more than ever.  As Congress works feverishly to pass legislation to mitigate the effects of the COVID-19 crisis, it remains to be seen what will come of the various drug pricing proposals that were being debated earlier this session.  For now, it looks like any legislative action to enhance patients’ access to drug therapies will likely come through a coronavirus-related stimulus bill, such as the one introduced by the House of Representatives last week.

On Friday, the House passed the “Health and Economic Recovery Omnibus Emergency Solutions Act” (HEROES Act) stimulus bill. With a $3 trillion price tag, the bill is a monumental proposal addressing a wide range of issues, health care-related and otherwise. Among the many provisions spanning its 1,815 pages, the bill includes an allocation of $4.575 billion to the Public Health and Social Services Emergency Fund “to prevent, prepare for, and respond to coronavirus, domestically or internationally, including the development of necessary countermeasures and vaccines, prioritizing platform-based technologies with U.S.-based manufacturing capabilities, the purchase of vaccines, therapeutics, diagnostics, necessary medical supplies” and other related items and services. The Secretary of Health and Human Services would be required to purchase vaccines developed using the allocated funds to respond to an outbreak or pandemic related to coronavirus. The Secretary would also be responsible for taking measures “authorized under current law” to ensure that vaccines, therapeutics, and diagnostics developed with allocated funds will be affordable in the commercial market.

In addition to appropriating funds, the HEROES Act would mandate coverage of vaccines, items, or services (including drugs) for the prevention or treatment of COVID-19 that are administered during an emergency period (defined in the bill) to Medicare and Medicaid beneficiaries. It would also prohibit such individuals from being charged any cost-sharing amounts. Similarly, commercial plans would be required to cover “medically necessary items and services” related to diagnosis and treatment of COVID-19 patients (or patients presumed to have the virus) during the applicable emergency period, without imposing any cost sharing on plan members. The Secretary of Health and Human Services, Secretary of Labor, and Secretary of the Treasury would be tasked with issuing guidance specifying applicable diagnoses and medically necessary items and services related to COVID-19. Covered items and services would “include all items or services that are relevant to the treatment or mitigation of COVID–19, regardless of whether such items or services are ordinarily covered under the terms of a group health plan or group or individual health insurance coverage offered by a health insurance issuer.”

Making COVID-19 treatments and vaccines widely available to as broad a population as possible is a key component of ending the current public health crisis. That availability will depend on not only having physical product to distribute, but also making such product(s) affordable. The HEROES Act in its current form would take a big step toward alleviating many Americans’ concerns that any coronavirus vaccines or treatments coming to market will be priced out of their reach.  Interestingly, though, the HEROES Act omits any sort of broader price caps or controls limiting the prices manufacturers may charge for vaccines or therapies that are ultimately developed and approved for widespread use with funds appropriated by the Act. The costs of expedited research, development, and manufacturing of such products, along with anticipated demand, suggest that the prices charged by successful drug companies may not be cheap. Democrats and patient advocacy groups had hoped to include anti-profiteering language in the legislation that would deny manufacturers exclusive rights to vaccines and to prohibit high prices. Some Democrats have suggested that the absence of such provisions means that they will need to revisit the issue later in the year. While the Secretary of Health and Human Services would be tasked with ensuring that vaccines, therapies, and diagnostics developed using HEROES Act funding will be affordable in the commercial market, it is unclear how that mandate would be carried out.  The Secretary’s approach, in the event this bill becomes law, could inform future drug pricing reform proposals (or at the very least, provide new fuel for the drug pricing debate).

The HEROES Act faces a tough path forward as it heads to the Senate, where leading Republicans have already vocalized objections to the bill. We, along with our colleagues at ML Strategies, are monitoring developments with the legislation and will continue to keep you updated.

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Theresa advises clients on all aspects of the pharmaceutical supply chain, including counseling industry stakeholders on a range of business, legal, transactional, and compliance matters. She provides clients with strategic counseling and creative business modeling that considers legal restrictions and regulatory risk in light of innovation and business goals.