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House, Senate Hold Hearings on Prescription Drug Prices

March 8, 2019

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PRESS CONTACTS
Jason Kleinman, Senior Legislative Analyst, Govt. Relations

The Senate and House the week of March 4 each held hearings to examine prescription drug prices. The Senate Special Committee on Aging hosted the first two in a series of hearings on the topic, while the House Ways and Means Health Subcommittee continued its work to find solutions to help lower drug prices.

During the March 6 Special Committee on Aging hearing, Chairman Susan Collins (R-Maine) announced that the committee will be holding three hearings related to drug prices and that “addressing the rising costs of prescription drugs is the top priority for this committee.” The March 6 hearing focused on patients who were struggling to afford their prescriptions, while the March 7 hearing examined potential policy solutions to alleviate this problem.

In her opening statement during the March 7 hearing, Collins highlighted the Biologic Patent Transparency Act, which she introduced March 6 with Sen. Tim Kaine (D-Va.) to require drug companies to publicly disclose the patents covering their products. According to Collins, “This bill will shine a light on disturbing patent strategies and deter companies from introducing patents late in the game in an attempt to prevent lower priced alternatives from coming to market. By addressing patent strategies that hinder true innovation, this legislation, I hope, will pave the path for new, lower cost alternatives.”

The March 7 House Ways and Means Health Subcommittee hearing focused on ways to promote competition to lower Medicare drug prices. During his opening statement, Subcommittee Chair Lloyd Doggett (D-Texas) discussed various proposals to reduce drug prices, noting, “I believe that the most important of those measures is to use bargaining power to lower prices for those who rely on Medicare.” He continued to blame pharmaceutical companies for high drug prices, questioned whether or not the companies have done a good job at innovating, and concluded by stating, “I believe we have a responsibility to ensure that patients come first and that it is their health and livelihoods that are the only thing that are nonnegotiable. Unaffordability and inaccessibility are not the unavoidable side effects of innovation. They’re the result of unrestrained monopoly power.”

Witnesses highlighted different problems that contribute to high drug prices and provided potential solutions. In her testimony, Robin Feldman, director of the Center for Innovation, University of California, Hastings College of the Law, stated, “Our regulatory system is allowing companies to drive patients towards more expensive drugs, while preventing cheaper drugs from gaining a foothold in the market.” She provided four policy solutions to improve pharmaceutical markets: closing tax loopholes, implementing a policy that would allow a drug to receive only one period of exclusivity, increasing transparency, and making improvements to the National Institutes of Health grant policy.

The hearing also included debate about whether the government should be allowed to negotiate Medicare Part D prices with pharmaceutical companies. Rep. Doggett touted his bill, the Medicare Negotiation and Competitive Licensing Act of 2019 (H.R. 1046). In her testimony, Amy Kapczynski, co-director, Global Health Justice Partner, Yale Law School, supported the idea. She noted, “Congress should introduce government negotiating power to the Part D program,” but mentioned that there must be a way to define a fair price and determine what happens if a company rejects the price offered by the government.

American Action Forum President Douglas Holtz-Eakin disagreed. He noted, “Government negotiation of drug prices could only be effective if the government were willing and able to impose a drug formulary (like the Part D plan sponsors already do) and to restrict access to medicines for which the price is ‘too high.’” He also added that the government would have to impose a single formulary to leverage negotiating power, which would eliminate the differentiator between plans.

Additionally, Holtz-Eakin encouraged Congress to recognize existing policies that exacerbate price increases. Specifically, he mentioned that the 340B Drug Pricing Program has created unintended consequences and urged Congress to reform the program.

Both committees will continue to examine solutions to rising drug prices. According to Sen. Collins, the Special Committee on Aging will host the third in its series of hearings in the spring, which will feature administration officials on their proposed solutions.

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