Today, the President sent Congress the $4 trillion Fiscal Year 2017 Budget Proposal – his last while in office.  While the Budget on the whole is dead on arrival in the Republican-controlled Congress, there are provisions worth noting because of their current newsworthiness and possible reemergence in future policy debates.  Moreover, proposals directed at addressing the problems associated with opioid abuse could attract bipartisan cooperation this year.

Here is a summary of some of the key proposals, taken from the Department of Health and Human Services Budget in Brief:

• Modify Reimbursement of Part B Drugs – lowers payment from 106 percent of the average sales price to 103 percent of average sales price starting in 2017
• Allow the Secretary to Negotiate Prices for Biologics and High Cost Prescription Drugs – Beginning in 2017, the Secretary would be given the authority to directly negotiate prices with manufacturers for high-cost drugs and biologics covered under Part D
• Reduce Length of Exclusivity – This proposal reduces the number of years (from 12 to 7) that a drug company has exclusivity and prohibiting additional years of exclusivity due to minor formulation changes. The proposal also modifies how Part B pays for biosimilar and innovator biological products
• Establish Transparency and Reporting Requirements in Pharmaceutical Drug Pricing –  this proposal requires pharmaceutical manufacturers to publically disclose production costs, including research and development investments, and discounts to various payers for specific high cost drugs that the Secretary identifies through regulation based on the public’s interest
• Prohibit Brand and Generic Drug Manufacturers from Delaying the Availability of New Generic Drugs and Biologics – Beginning in 2017, this proposal authorizes the Federal Trade Commission to prohibits  “pay-for-delay” agreements between branded and generic pharmaceutical companies
• Preventing Prescription Opioid Overdose, including Improved Prescribing Practices  – seizing on growing congressional and health community concerns, the Budget  increases spending by $559 million for programs to address opioid abuse, misuse, and overdose.  The Budget provides $80 million, for CDC to support improved uptake of CDC’s new “Guideline for Prescribing Opioids for Chronic Pain” among providers.  In addition, Budget proposes to require states to track high prescribers and utilizers of prescription drugs in Medicaid

Also of note, and buried in the Tax Expenditures section of the Budget’s Analytical Perspectives, is a provision impacting orphan drugs.  This section describes the ways the government proposes to pay for the budget and one idea on the table is to eliminate existing tax credits for “particular activities, investments, or industries.”  Included in this would be elimination of the current tax credit of “50 percent of the costs for clinical testing required by the Food and Drug Administration for drugs that treat rare physical conditions or rare diseases.”

All materials for the Fiscal Year 2017 Budget are available here.

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