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In testimony before the Senate Finance Committee, Arnold Ventures’ Executive Vice President of Health Care Mark Miller outlined several potential solutions to control drug spending in Medicare and Medicaid.

In his opening statement, Miller emphasized the philanthropy’s health objective is to lower cost and increase value for businesses, for governments, and patients. He elaborated on four key focus areas: hospital and physicians’ prices; excessive drug prices and spending; reducing inappropriate and unsafe utilization; and caring for complex patients.

When asked by Chairman Chuck Grassley for ideas to lower the cost of drugs while preserving innovation, Miller said, “There is a fair amount of headroom between the prices that are being charged and paid and how much is being spent on R&D, so I think you can go after prices and go after spending and not immediately threaten innovation.”

Miller, a 30-year veteran health policy professional, discussed potential fixes to Medicare and Medicaid, including a series of reforms to Medicare Part D’s payment structure “to increase pressure on the plans to more aggressively negotiate drug prices.” Miller suggested for the Committee to consider increasing the transparency of and examining the rules around sharing rebates and other fees between the Medicare program and the plans to maximize tax payer savings.

“More ambitiously, you could consider whether the rebate compensation model should be changed altogether to a fee-based model.” As for Medicaid, Miller added, “Legislatively and administratively, we support state innovation such as Louisiana’s subscription model for Hepatitis C drugs and New York State’s spending cap in negotiation models.”

Tuesday’s hearing was the first in a series of hearings scrutinizing prescription drug pricing and considering policy and oversight solutions to lower costs for American patients. The Senate hearing took place on the same day the Democratic-led House Oversight and Reform Committee held the first of its own drug pricing hearings.

The full Committee hearing can be watched here.