Posts tagged with "Inflation Reduction Act"

FDA to allow Florida to import prescription drugs in bulk from Canada

January 8, 2024

The Food and Drug Administration said on Friday, January 8, that it will allow Florida to buy prescription drugs directly from wholesalers in Canada—a move that is intended to lower the cost of prescription drugs for residents in the state, reports NBC News.

Prescription drugs are often much cheaper outside the United States, and some states—including Florida, Vermont and Colorado—have urged the federal government to allow them to import drugs from other countries.

The FDA already permits individuals to buy prescription drugs from Canada under certain circumstances.

The push to allow states to do so has been in the works for years. In 2019, the Trump Administration announced preliminary plans to import drugs from Canada, asking states to come up with proposals on how to do so safely. In 2021, President Joe Biden issued an executive order directing the agencies to work with states on the importation plans.

The FDA’s new policy will allow Florida to purchase prescription drugs in bulk. The medications will be made available to its residents through various state-run health care programs, such as Medicaid.

Meredith Freed, a senior policy analyst with KFF’s Program on Medicare Policy, said it’s unclear when Florida will begin importing the drugs.

Florida must meet certain requirements, such as testing the drugs to ensure they are not counterfeit and relabeling the drugs to be consistent with FDA-approved labeling, Freed said.

The state will also be required to submit a quarterly report to the FDA that includes information about the imported drugs, cost savings, and any potential safety and quality issues under the new policy, according to the agency.

The plan is only authorized for two years from the date the agency is told about the first drug importation shipment, according to the FDA. The agency has the authority to extend the authorization for an additional two years at a time.

Florida’s Agency for Health Care Administration has previously estimated that Canadian drug imports will save the state $150 million annually if enacted.

Stephen Ubl, the president and CEO of the Pharmaceutical Research and Manufacturers of America, the drug industry’s trade group, called the FDA’s decision “reckless.”

“Ensuring patients have access to needed medicines is critical, but the importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health,” said Ubl, who has previously issued statements opposing the importation plan. (To be eligible for importation, the FDA has said that the prescription drugs must be approved by regulatory authorities in Canada.)

Friday’s move comes as the federal government continues to negotiate with major drug companies on the cost of the ten costliest drugs in the United States as part of a provision in the Inflation Reduction Act. The negotiated prices won’t go into effect until 2026.

An analysis published Thursday from the Commonwealth Fund, a research group that studies health care issues, found that the U.S. prices for the ten drugs were three to eight times higher compared to other countries of similar size and wealth.

Research contact: @NBCNews

GOP’s plan to fund Israeli war with IRS cuts raises questions

November 1, 2023

A Republican plan to fund an aid package to Israel via cuts to the Internal Revenue Service (IRS) budget has sparked a debate among politicians, experts, and commentators, reports Newsweek.

Under the leadership of new House speaker Mike Johnson, the U.S. House of Representatives seeks to provide $14.3 billion in aid to Israel by cutting funding to the revenue service for the United States federal government—which is responsible for collecting U.S. federal taxesusing some of the increased funding earmarked for it through President Joe Biden‘s Inflation Reduction Act.

Responding, some have raised concerns that Republicans are using the aid as a political opportunity to cut funding to the IRS. Typically, Congress doesn’t cut funding elsewhere to make room for emergency aid or spending.

Indeed, under Biden’s Inflation Reduction Act, the agency’s funding was boosted by $80 billion to improve taxpayer services and pay for more enforcement actions against wealthy tax cheats. But, due to Republican opposition, Biden and House Republicans agreed to repeal roughly $20 billion of that $80 billion as part of a deal in May.

White House Press Secretary Karine Jean-Pierre issued a statement accusing Republicans of “politicizing national security” and calling their bill a non-starter.

Meanwhile, Rosa DeLauro, the ranking Democratic representative on the House Appropriations Committee, said in a statement: “House Republicans are setting a dangerous precedent by suggesting that protecting national security or responding to natural disasters is contingent upon cuts to other programs.”

Democrat Debbie Wasserman Schultz said in a statement, “Support for defending Israel should not come with conditions…When your neighbor’s house is on fire, you don’t haggle over the price of the garden hose,” she wrote.

Meanwhile,  Biden initially had requested the House pass a $106 billion package that would include aid for Israel, Ukraine, and border security.

Johnson, who voted against aid for Ukraine before he was elected House speaker last week, had said he wanted aid to Israel and Ukraine to be handled separately. He has said he wants more accountability for money that has been sent to Kyiv and that supporting Israel in the aftermath of the Hamas attack on October 7 should be the U.S.’s top security priority.

“I understand their priority is to bulk up the IRS, but I think if you put this to the American people and they weigh the two needs, I think they’re going to say standing with Israel and protecting the innocent over there is in our national interest and is a more immediate need than IRS agents,” Johnson said in a Fox News interview.

At an event on Monday at the University of Louisville’s McConnell Center, Senator Mitch McConnell urged support for Ukraine.

“Right now, loud voices on both sides of the aisle are suggesting that American Fleadership isn’t worth the cost. Some say our support for Ukraine comes at the expense of more important priorities, but as I’ve said every time I’ve got the chance, it’s a false choice,” he said. “America is a global superpower with global interests, and enemies of democracy around the world like nothing more than to outlast our resolve to resist Russian aggression.”

The House Rules Committee is expected to consider the Republican Israel bill on Wednesday, November 1. It will need bipartisan support to become law.

Research contact: @Newsweek

White House announces first drugs picked for Medicare price negotiations

August 30, 2023

On Tuesday, August 29, the Biden Administration unveiled a long-awaited list of the first ten medicines that will be subject to price negotiations with Medicare—kicking off a landmark program that is expected to reduce the government’s drug spending but is being fought by the pharmaceutical industry in court, reports The New York Times.

The medications—which treat diabetes, cancer and other disorders—are taken by millions of older Americans and cost Medicare billions of dollars annually. The Centers for Medicare & Medicaid Services selected the drugs through a process that prioritized ones that account for the highest Medicare spending, have been on the market for years, and do not yet face competition from rivals. Additional medications will be selected for price negotiations in the coming years.

Drugs Selected for Price Negotiations

  1. Eliquis, for preventing strokes and blood clots, from Bristol Myers Squibb and Pfizer
  2. Jardiance, for diabetes and heart failure, from Boehringer Ingelheim and Eli Lilly
  3. Xarelto,for preventing strokes and blood clots, from Johnson & Johnson
  4. Januvia, for diabetes, from Merck
  5. Farxiga, for diabetes, heart failure and chronic kidney disease, from AstraZeneca
  6. Entresto, for heart failure, from Novartis
  7. Enbrel, for arthritis and other autoimmune conditions, from Amgen
  8. Imbruvica, for blood cancers, from AbbVie and Johnson & Johnson
  9. Stelara, for Crohn’s disease, from Johnson & Johnson
  10. Fiasp andNovoLog insulin products, for diabetes, from Novo Nordisk

The final list had some overlap with what experts had anticipated. Its release was an important moment for Democrats, who have campaigned on a promise to lower the cost of prescription drugs. President Joe Biden will mark the occasion with remarks at the White House on Tuesday afternoon, in another sign that he intends to make lowering health care costs a theme of his 2024 re-election campaign.

In a statement issued by the White House, the president called the negotiations “a key part of Bidenomics, my economic vision for growing the economy from the middle out and the bottom up—not the top down.”

Stephen J. Ubl, the chief executive of the Pharmaceutical Research and Manufacturers of America, the drug industry’s main lobbying group, called the announcement “the result of a rushed process focused on short-term political gain rather than what is best for patients.” He warned that it would “have significant negative consequences long after this administration is gone.”

Medicare gained the authority to negotiate the price of some prescription medicines when Congress passed the Inflation Reduction Act last year—a signature legislative achievement for the president. The announcement on Tuesday is a key step toward those negotiations, which will unfold over the coming months, with the new prices taking effect in 2026.

The ten selected medications range from very expensive drugs taken by relatively few older Americans to cheaper drugs taken by huge numbers of people.

Imbruvica, which in a recent 12-month period was taken by 20,000 Medicare beneficiaries with blood cancers, has a sticker price of $17,000 a month. The blood thinner, Eliquis, which was taken by 3.7 million beneficiaries, has a monthly sticker price under $600.

The negotiation program is projected to save the government an estimated $98.5 billion over a decade. It is also expected to eventually reduce insurance premiums and out-of-pocket costs for many older Americans, although the magnitude of those savings remains to be seen.

Research contact: @nytimes

Eli Lilly to cut prices of insulin drugs by 70%, cap patient costs at $35

March 2, 2023

Eli Lilly—facing pressure to curb diabetes-treatment costswill cut the list prices for its most commonly prescribed insulin products by 70% and take other steps to make it easier for patients to afford the drugs, reports The Wall Street Journal.

On Wednesday, March 1, the Indianapolis-based company announced that the 70% price cuts will take effect in the fourth quarter for Humalog and Humulin, its two biggest-selling insulin products.

The company also said that on May 1 it would reduce the list price of an unbranded insulin it sells to $25 a vial from $82 a vial—the lowest level for any insulin that diabetes patients take around mealtimes, and less than Lilly’s list price for a Humalog vial in 1999. And it plans to improve a program capping patients’ out-of-pocket costs at $35 a month.

“The aggressive price cuts we’re announcing today should make a real difference for Americans with diabetes,” said Lilly Chief Executive David Ricks.

Drugmakers—including Lilly, Novo Nordisk and Sanofi—substantially raised the prices for their insulin products during the 2010s. Now, the products cost hundreds of dollars a month. Humalog currently has a list price of $530 for a five-pack of injection pens and $274 for a vial; although Lilly said most people with commercial insurance and Medicare pay no more than $95 a month.

The manufacturers have said that, while list prices increased, they have had to pay larger rebates to companies that manage drug benefits.

Yet, because of the high prices, people without insurance or with high-deductible health plans can have trouble affording the products—forcing them to ration use.

To ease the burden, some U.S. states have enacted insulin-cost caps in recent years. Last year’s Inflation Reduction Act mandated that patients covered by the federal Medicare health-insurance program should pay no more than $35 a month in copays or other out-of-pocket costs for an insulin prescription.

In his State of the Union address in February, President Joe Biden called for that $35 monthly cap to be expanded beyond Medicare to include every diabetes patient.

In addition to reducing the list prices for its top-selling insulins, Lilly said it would introduce on April 1 a new insulin, named Rezvoglar, that is a copycat version of Sanofi’s Lantus insulin. Lilly will list its price at $92 for a five-pack of injection pens, a 78% discount to the list price for Lantus.

The company said it would make improvements to its program, introduced in 2020, to cap insulin out-of-pocket costs at $35 a month. Participating pharmacies will now implement that cap automatically when people with commercial insurance fill their prescriptions, rather than requiring people to present a Lilly savings card.

People without insurance can continue to cap monthly costs at $35 for Lilly insulin products by using a savings card that can be downloaded immediately online, the company said.

Research contact: @WSJ

Treasury Department delays electric vehicle tax credit guidance until next March

December 21, 2022

The Treasury Department is delaying plans to issue proposed guidance for the sourcing of electric vehicle batteries for federal tax incentives from the end of this month to next March, reports CNBC.

The sourcing of materials and batteries for EVs is a major part of the Inflation Reduction Act’s federal tax credits of up to $7,500 for consumers, which was signed into law by President Joe Biden in August.

That means some electric vehicles that are not expected to comply with the new standards will continue to be eligible for the credits until the proposed guidance is issued. Other non-battery elements of the IRA will still take effect January 1, including new income caps for eligible buyers and restrictions on vehicle pricing.

Some have argued that the sourcing guidelines for vehicle materials are unrealistic, given the current supply chain. Other countries and non-domestic automakers, such as Hyundai, have argued the rules should be defined more broadly to allow some exemptions.

The Treasury said late on Monday that it will issue the “anticipated direction of the critical mineral and battery component requirements” by the end of this month, and that nothing will take effect until the proposed guidance is issued in March.

The Inflation Reduction Act limits EV tax credits to vehicles assembled in North America and is intended to wean the U.S. off battery materials from China, which reportedly accounts for 70% of global supply of battery cells for the vehicles.

For a $3,750 critical minerals credit, the law states that 40% must be extracted or processed in the United States, or in a country where the USA has a free-trade agreement, or from materials that were recycled in North America.

Credit for the other $3,750 requires that at least 50% of battery components were manufactured or assembled in North America. The percentage requirements for both rise annually to reduce reliance on foreign countries.

Starting January 1, a tax credit will not be available to single individuals with a modified adjusted gross income of $150,000 or higher. The income cutoff is higher for others—$225,000 for heads of household; and $300,000 for married couples who file a joint tax return.

Cars with a retail price of more than $55,000 also aren’t eligible, nor are vans, SUVs or trucks that cost $80,000 or more.

Research contact: @CNBC

Rivian has nearly 200,000 orders for its EV trucks and delivery vans—but has produced only 8,000

August 15, 2022

Startup electric truck manufacturer Rivian, based in Irvine, California, continues to see robust demand for its inaugural products, with nearly 200,000 orders in hand—but a long way to go to fill them, reports The Chicago Tribune.

 Rivian announced during a second quarter earnings call on Thursday, August 11, that it had more than 98,000 orders for its R1T pickup and R1S SUV as of June 30. Amazon, an early investor in Rivian, has ordered 100,000 commercial electric delivery vans.

 The company—which launched production in Normal, Illinois, nearly a year ago and has struggled with a slower than expected ramp-up—has built about 8,000 EVs and reaffirmed a scaled-back production target of 25,000 vehicles this year.

 Rivian generated $364 million in revenues and reported a net loss of $1.7 billion for the quarter. The company reported Thursday it had $15 billion in cash at the end of the second quarter.

 In addition to concerns about the production ramp-up, Rivian is navigating the implications of President Joe Biden’s historic climate bill, which passed the Senate on Sunday, August 7, and was expected to pass a vote in the House on Friday.

 The bill includes an extension of the $7,500 federal tax credit for EV purchases—but sets a cap that would make trucks and SUVs priced over $80,000 ineligible. That would cut the majority of Rivian’s sales out of the mix for the tax credit beginning next year.

 The $430 billion Inflation Reduction Act focuses on healthcare and clean energy, with a number of measures to promote EV adoption. The bill extends the $7,500 tax credit until 2032, adds a $4,000 tax credit for used EVs and lifts the 200,000 vehicle sales cap for manufacturers.

 It also imposes new restrictions, excluding higher-income buyers and EVs priced above $55,000 for sedans and $80,000 for SUVs and trucks, which could impact Rivian and other manufacturers. The bill also includes new domestic battery sourcing requirements.

 “We’re incredibly happy to see policy that helps drive more rapid adoption of electric vehicles, as well as important investments in building domestic battery cell production,” Rivian CEO and founder R.J. Scaringe said on August 11. “While many of our R1 configurations won’t meet the bill pricing requirements, our (next-generation) R2 product line and associated cell roadmaps are being developed to allow our customers to capture the value of these incentives.”

 The starting price for the R1T truck is $67,500, while the R1S SUV lists for $72,500. But after add-ons and options, most Rivian customers spend more than $80,000 on their EVs, the company said.

 On Wednesday, Rivian sent current customers who have reserved an EV a potential workaround to qualify for the full $7,500 tax credit before the bill becomes law January 1. Rivian said buyers can sign a “written binding contract” for their R1T or R1S purchase, making $100 of their existing $1,000 deposit non-refundable, but excluding them from the price and income restrictions, regardless of the delivery date.

 Rivian cautioned that the final bill terms were not certain and there was no guarantee the IRS would approve the tax credit, but offered the option “as a way to do what we can to increase the probability of receiving the $7,500.”

D uring the conference call, Scaringe reiterated that ramping up production in Normal remains the “key focus” for Rivian, but the company has elevated the importance of cost-cutting as well.

 However, while Rivian is downsizing its nonmanufacturing workforce, it still plans to hire an additional 1,500 workers and add a second shift at the Normal, Illinois, plant by the end of the third quarter.

 The company also is building a second $5 billion assembly plant in Georgia, which is slated to produce Rivian’s next-generation EV on the smaller R2 platform beginning in 2025.

 Research contact: @chicagotribune

Democrats’ big climate, healthcare, and tax package clears major Senate hurdle

August 9, 2022

The U.S. Senate voted on Sunday, August 7, to advance a sweeping climate and economic bill with the support of all 50 Democrats—bringing long-stalled elements of President Joe Biden’s agenda one step closer to reality, reports NBC News.

The procedural vote on the filibuster-proof package was 51-50, with all Republicans opposing the motion to begin debate and Vice President Kamala Harris casting the tie-breaking vote.  The bill will be sent to the House in the coming days.

The legislation, called the Inflation Reduction Act, includes major spending to combat climate change and extend healthcare coverage, paid for with savings on prescription drugs and taxes on corporations. It puts hundreds of billions of dollars toward deficit reduction.

“This is one of the most comprehensive and impactful bills Congress has seen in decades,” Senate Majority Leader Chuck Schumer (D-New York) said on the floor before the vote.

“It’s going to mean a lot for the families and the people of our country,” Harris told NBC News as she arrived to break the 50-50 tie.

The procedural vote, during a rare weekend session, kicks off several hours of debate, followed by a “vote-a-rama”—a process in which senators can offer virtually unlimited amendments that require a simple majority of votes to adopt.

The legislation isn’t subject to the filibuster—it is being pursued through a special process called reconciliation, which allows Democrats to pass it on their own. But the process includes limits; policies included in the bill must be related to spending and taxes, and the legislation has to comply with a strict set of budget rules. It’s the same process Democrats used to pass the American Rescue Plan in 2021 and Republicans used to pass the Trump tax cuts of 2017.

Before Sunday’s vote, the Senate parliamentarian ruled that key Democratic provisions on clean energy and allowing Medicare to negotiate prescription drug prices passed muster and could be included in the inflation package, Democratic leaders said.

“While there was one unfortunate ruling in that the inflation rebate is more limited in scope,” Schumer said, “the overall program remains intact and we are one step closer to finally taking on Big Pharma and lowering Rx drug prices for millions of Americans.”

The Democrats-only package, which includes several pieces of Biden’s Build Back Better agenda, was long thought to be dead after Senator Joe Manchin (D-West Virginia)rejected a larger bill in December. He cut a deal last week with Schumer, pleasantly surprising many of his Democratic colleagues, and has since been on a media blitz to sell it.

“It’s a red, white and blue bill,” Manchin said recently on MSNBC, calling it “one of the greatest pieces of legislation” and “the bill that we need to fight inflation, to have more energy.”

On Thursday, August 4,  Senator Kyrsten Sinema (D-Arizona), following a week of silence, signed off on the bill after securing some changes to it.

Sinema forced Democrats to remove a provision that would have limited the carried interest tax break, which enables wealthy hedge fund and investment managers to pay a lower tax rate.

Instead, it was replaced by a new 1% excise tax on stock buybacks that is expected to bring in $74 billion—five times as much as the carried interest provision, Schumer said. Sinema also secured $4 billion in funding for drought prevention in Arizona and other western states.

Senator Lindsey Graham (R-South Carolina) said on Friday, August 5, that the amendment process would be unpleasant. “What will vote-a-rama be like? It’ll be like hell,” he said.

Research contact: @NBCNews