Among a slew of health care-related provisions in the most recent draft of the Build Back Better Act, the one with the biggest implications for health insurers is likely the proposal that would temporarily close the Medicaid “coverage gap.” But for the health care industry at large, the proposal that packs the biggest punch in H.R. 5376 is the narrowed-down — but still significant — set of drug pricing reforms recently added to the bill.

Included in those drug-pricing provisions is the long-sought authority that would allow HHS to negotiate the price of a select set of prescription drugs. Drugs with the highest gross spending in Medicare Part B and Part D would be targeted for negotiation, but only those that are single-source therapies and have been on the market for nine years or more (for small-molecule drugs) and 12-plus years (for biologics). All insulin products would be targeted for negotiation, and therapies produced by small biotech companies would be exempted.

Starting in 2023, 10 drugs would be eligible for government price negotiation, and that number would increase marginally in later years. But there is a largely overlooked, crucial detail worth calling out regarding how that provision would work, says Lindsay Bealor Greenleaf, vice president at the Washington, D.C.-based consulting firm ADVI Health.

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