Schrader’s Bipartisan Approach to Legislating Reaps Benefits on Drug Pricing, Education

March 19, 2020 by Dan McCue
Rep. Kurt Schrader meets with League of Oregon Cities officials. (image via Schrader's Twitter account)

WASHINGTON – Rep. Kurt Schrader doesn’t miss a chance to reach across the aisle if it will benefit his constituents.

Among the most recent of multiple examples is the Oregon representative’s introduction of H.R. 4455, the Bolstering Innovative Options to Save Immediately on Medicines (BIOSIM) Act.

Introduced by Schrader and Rep. Greg Gianforte, R-Mont., the bill aims to increase reimbursements for biosimilar drugs and boost their utilization by doctors.

The Act temporarily increases the reimbursement for biosimilar drugs from the average sales price of the drug plus six percent to the average sales price of the drug plus eight percent for five years to help increase their utilization by doctors.

Currently, Medicare patients pay a 20 percent coinsurance on Part B drugs which includes both biologics and biosimilars. This legislation will reduce patient cost and cost to the government, by increasing the use of lower cost biosimilars.

“Biosimilars have long struggled to grow in utilization and the BIOSIM Act will help them gain market share by providing an incentive for biosimilars that are lower cost than the biologic,” Schrader said.

“Costs for patients and the healthcare system will go down with the transition to greater use of lower cost biosimilar drugs. There is no doubt that this bill is a win-win for patients and providers,” he said.

Schrader and Gianforte also teamed up to introduce H.R. 5304, the PBM Transparency in Prescription Drug Costs Act, which mandates quarterly reports on the costs, fees and rebate information associated with pharmacy benefit manager (PBMs) contracts ensuring that employers know the true costs of the services for which they are paying.

States, local governments, organizations and businesses use PBMs to negotiate lower drug prices for the individuals on their health insurance plans. Three organizations control 85 percent of this market. While PBMs play a crucial role in the drug supply chain, the lack of transparency into their practices has contributed to the rising cost of prescription drugs.

“As the cost of pharmaceuticals continues to escalate exponentially, the opaque process, rebates, discounts and claw-back fees have become part of the problem and do not give consumers the best deals possible,” Schrader said.

“[This bill] will provide certainty to employers and consumers by ensuring greater transparency in the calculations of drug costs. This commonsense, bipartisan legislation will rein in pricing schemes that hide the true cost of medications and prevent the skyrocketing costs of prescription drugs.”

The Act requires that employers receive a report at least every six months from the health issuer or entity providing PBM services including an array of prescription pricing and utilization data for the enrollees of their plan.

PBMs would also no longer be able to utilize spread pricing as the default contracting model — a practice in which the PBM charges the plan sponsor more for a drug than the PBM paid the pharmacy for dispensing the drug.

When contracting with a group health plan, a PBM must pass all rebates and discounts received from a pharmaceutical manufacturer, distributor, or other third party through to the health plan. The bill also addresses a practice of shifting costs into non-transparent fees. Reporting will be structured to safeguard the release of information that could lead to higher drug prices.

The bill has been referred to the House Committee on Energy and Commerce Subcommittee of Health.

Schrader’s commonsense approach to bipartisanship and constituent service has also been on display in the realm of education.

Last congress, he co-sponsored the bipartisan HR 2353, Strengthening Career and Technical Education for the 21st Century Act and saw it signed into law.

“Now schools and educators will have innovative tools and flexibilities to start and expand successful CTE programs. This will help students learn about new careers that will give them family-wages with no student debt,” Schrader said.

This congress, he’s working with his colleagues on Capitol Hill to put in place policies that increase the affordability and access to higher education for all Americans.

Last fall, Schrader was among the House members who introduced a comprehensive bill to reauthorize the Higher Education Act that would make significant changes to the way students access federal financial aid.

The bill — dubbed the College Affordability Act (CAA) — opens federal aid to new populations of students, tweaks pivotal grant and loan forgiveness programs, and establishes a new institutional accountability metric, among other changes.

“Every American should have access to a quality education from early education to continuing education efforts. Know that I value the role that the federal government plays in our education system and will work with my colleagues to make sure our communities always have a strong partner,” Schrader said.

And just this past week, Schrader introduced H.R. 6134, the Veterinary Education and Training Minimizes Educational Debt Act.

The Vet Med Act co-sponsored by Schrader and Rep. Ted Yoho, R-Fla., both of whom are veterinarians and co-chairs of the House Veterinary Medicine Caucus, allows veterinary students serving in their internship or residency programs to be eligible for interest-free deferment on their student loans during their residency.

Veterinary student loan debt is a top issue for veterinarians and can create a financial barrier for them post-graduation and for decades afterwards.

In 2016, the average education debt for vet school grads was $143,758 and more than 20% of grads had at least $200,000 in debt.

“There is a debt crisis in the veterinary community,” Schrader said in introducing the bill. “Young vets are often crippled with debts in the six figures. My bill will help ease the repayment burden by allowing recent graduates to defer their loans while they are in residency and internship programs. This is an important step in fostering the talents of the next generation of veterinarians.”

Susan J. Tornquist, dean of Carlson College of Veterinary Medicine at Oregon State University, agreed.

“This bill is extremely important for the veterinary school graduates who go on to additional training in internships and residencies to become boarded specialists,” Tornquist said.

“The majority of these veterinarians have significant student debt, and in choosing advanced training, they are delaying their ability to earn the kinds of salaries necessary to repay their student loans,” she continued. “This bill acknowledges that the financial stresses associated with specialty training in veterinary medicine are the same, if not greater than those associated with specialty training in the medical and dental fields.”

According to Dr. John Howe, president of the American Veterinary Medical Association, residencies and internships are critical to preparing veterinarians for high-need specialties like emergency medicine, oncology, and large animal medicine.

The problem is that during this time spent in additional training, veterinary borrowers face massive interest accumulation that can make loan repayment feel insurmountable.

“The VET MED Act is an important step toward alleviating this debt burden,” Howe said.


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