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  • Washington Highlights

    Ways and Means Committee Holds Hearing on Rising Drug Prices

    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The House Ways and Means Committee held a Feb. 12 hearing on the cost of rising prescription drugs. Prior to the hearing, Committee Chair Richard Neal (D-Mass.) and Ranking Member Kevin Brady (R-Texas) issued a joint statement acknowledging that “the time is now to take meaningful action to lower the cost of prescription drugs” and pledging to work “together to end this cycle while preserving access to life-saving innovations.”

    During his opening statement, Chairman Neal noted, “The problem is complex, and Congress will need a multi-pronged approach to address it: we will need to change policies and incentives in the FDA, CMS, and potentially even look in the tax code. We need to change incentives within the system, and at the heart of this is the patient who needs relief.”

    Rep. Brady also outlined potential solutions in his opening statement, “We must avoid policies that jeopardize the valuable innovation of our researchers, pharmacists, and medical professionals. We must get the incentives right to lower costs while we accelerate new advances in medicines. And we must give patients much more power to choose the care and the medicines right for them, not what’s right for Washington. Medicare Part B and Part D are due for needed reforms, and we want to work together to bring those bipartisan reforms across the finish line.”

    Additionally, several of the witnesses provided suggestions for how the committee should address this problem. Washington University in St. Louis Associate Professor of Law Rachel Sachs, JD, encouraged the committee to lower patients’ out-of-pocket costs, fix misaligned incentives in the pharmaceutical payment system, and strive to reduce overall pharmaceutical spending.

    During his testimony, Arnold Ventures Executive Vice President of Health Care Mark Miller, PhD, outlined four key areas to address high drug prices: identifying the drivers of innovation and developing alternative incentive structures that drive innovation; encouraging competition by reforming our current patent and exclusivity system that grants monopolies to pharmaceutical companies for decades; rethinking the way we pay for drugs to move away from high list prices and spread pricing and moving towards alternative methods of payment; and increasing transparency throughout the drug delivery and payment system.

    American Enterprise Institute Wilson H. Taylor Scholar in Health Care and Retirement Policy Joseph Antos, PhD, acknowledged that any single policy proposal can only address some aspects of the overall problem of high drug costs. He suggested a balanced policy agenda that would: promote competition to lower prices while retaining appropriate incentives for the development of innovative new treatments; ease the financial burden of rising drug prices on consumers while slowing the growth of total health spending; promote greater efficiency in the delivery on health services; and promote private sector solutions that can better adapt to changing conditions in the health market.