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  • Washington Highlights

    Senate, House Committees Hold Hearings on Drug Pricing

    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The Senate Finance Committee and House Committee on Oversight and Reform Jan. 29 each held hearings focused on high prescription drug prices. 

    During his opening comments, Senate Finance Committee Chair Chuck Grassley (R-Iowa) noted the committee will hold a series of hearings on high drug prices to “look at all aspects of the prescription drug market and make changes where necessary.” He highlighted the need for increased transparency and stated his support for requiring manufacturers to include list prices on TV ads. He also promoted the Right Rebate Act, which he recently reintroduced with Ranking Member Ron Wyden (D-Ore.), to close a loophole in Medicaid that has allowed pharmaceutical manufacturers to misclassify their drugs.

    In his opening remarks, Sen. Wyden pointed out the “crisis of prescription drug costs,” noting that “millions of Americans have skipped doses or declined to fill prescriptions because of their cost.” He specifically mentioned the drastic price increase for insulin. Wyden underscored the need to address several policy issues related to pharmacy benefit managers and Medicare Part D plans.

    Both Grassley and Wyden expressed their displeasure with the pharmaceutical industry for declining their invitation to participate in the hearing.

    During the course of the hearing, American Action Forum President Douglas Holtz-Eakin, PhD, asserted that the 340B Drug Pricing Program is one factor that has led to increased drug prices. During her comments, Sen. Debbie Stabenow (D-Mich.) responded to that comment, noting that she disagreed that the program causes higher drug prices.

    The House Oversight and Reform Committee hearing focused on why drug companies are increasing prices, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices. The hearing follows a Jan. 14 request from Committee Chair Elijah Cummings (D-Md.) to 12 drug companies seeking detailed information on the companies’ drug pricing practices [see Washington Highlights, Jan. 18].

    Chairman Cummings began the hearing by stating, “But today, for our first hearing, I wanted to focus on one of the biggest problems facing American families across the country — the actions of drug companies that have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs, all while recording windfall profits.” He also noted there is a “strong bipartisan consensus that we must do something to rein in out-of-control price increases.”

    Ranking Member Jim Jordan (R-Ohio) said there are few issues more in need of the committee’s attention than drug prices, and that one thing he, Chairman Cummings, and President Trump all have in common is a commitment to finding reforms that will improve access and affordability with respect to prescription drugs. Jordan did express concern with Chairman Cummings’ recent investigation into drug companies since it was done without consultation from Republicans and without any indication of their scope or plans. He added that the problem is not the private sector; rather, it is that government intervention has distorted incentives and created barriers to competition.

    In his written testimony, Johns Hopkins University Bloomberg School of Public Health Professor of Health Policy and Management Gerard Anderson, PhD, outlined seven topics for the committee to prioritize. He focused on the first two during his oral testimony, urging the committee to ask branded drug companies to explain why they increased prices for specific drugs and to use its investigative authority to understand how drug companies allocate costs to research.