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Drug Pricing Debate Brings More Testimony from Experts, Patients

Another round of congressional hearings tackles affordability and access, lack of transparency in the pharmaceutical supply chain

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Another flurry of congressional drug pricing hearings has come and gone, but one thing remains clear -- the debate over drug prices is showing no signs of slowing down, and that’s a good thing. Last week alone, three committees heard from patients and health policy experts on issues ranging from affordability and access, to the lack of transparency in the pharmaceutical supply chain.

Here’s what happened, and what’s ahead:

Senate Aging Committee

  • In the first of a three-part series of Aging Committee hearings on lowering drug prices for seniors, five patients from around the country shared the hardships and frustrations they experience because of the fluctuating cost of their medication.

Pamela Holt, a retired teacher from Granger, Indiana, is $10,000 in debt since being diagnosed with multiple myeloma, an incurable blood cancer, in 2012. Holt urged members of Congress to take meaningful steps to pass legislation like CREATES to restore competition and allow for more generics to enter the market.

“There are no competing drugs in this category, so they (Celgene) can charge whatever they want for their drug (Revlimid).”
Pamela Holt retired teacher
  • The next day, the committee heard from health policy experts who weighed in on policy solutions to address this escalating issue. Witness Stacie B. Dusetzina, a professor of health policy at Vanderbilt University School of Medicine, spoke to the committee about her research findings related to the prescription drug supply chain, including the role of drug rebates in increasing patient and taxpayer spending in the Medicare Part D program.
Our work has shown that the Medicare Part D benefit requires patients to pay a percentage of the drug’s price for virtually all anticancer drugs. This means that most Medicare beneficiaries needing these drugs will spend thousands of dollars out of pocket to fill their first prescription and, in some cases, over $1,000 per month after they reach the catastrophic coverage.
Stacie B. Dusetzina professor of health policy at Vanderbilt
  • The third hearing in the series, according to Sen. Susan Collins, who chairs the committee, will focus on administration officials’ proposed policy solutions.

Ways and Means Committee

  • The House Ways and Means Health Subcommittee’s hearing focused on using Medicare to encourage competition and increase access. Three academics took the witness stand, along with Doug Holtz-Eakin, executive director of the American Action Forum, and Frederick Isasi, executive director of Families USA.
  • A newly introduced bill that would allow Medicare to negotiate prices was among the topics of the hearing. If passed, the bill would enable the Secretary of Health and Human Services to issue a competitive license to another company to produce a generic, if drug companies refuse to negotiate in good faith.
  • Amy Kapczynski, co-director of the Global Health Justice Partnership at Yale Law School, stressed the importance of giving the government authority to negotiate fair prices. Kapczynski added that prices should reflect the value of the drug while taking into account the costs and risks associated with drug development. Another expert witness, Ameet Sarpatwari with Harvard Medical School, agreed with the implementation of a value-based pricing model, adding that “arriving at drug prices based on their benefits would be helpful.”
  • In her opening statement, Professor Robin Feldman called for changes to improve the pharmaceutical market. She addressed the secret deals between drug makers and the middlemen and blamed tax provisions for feeding the patent and rebate game. Feldman urged Congress to close the loopholes that allow drug makers to deduct the cost of lobbying and implementing a one-and-done principle in which a drug receives one period of exclusivity.
Companies have become masters at repeatedly extending their protections. In fact, I have seen in my own research that drug companies are largely recycling and repurposing drugs these days, rather than inventing new ones.
Robin Feldman professor of law at UC Hastings

Committee on the Judiciary

  • Increased consolidation throughout the industry was the focal point of a hearing of the House Judiciary Committee. And while the negative impact that mergers and acquisitions have on patients and taxpayers’ pockets was discussed in great detail, three of four witnesses focused their testimonies largely on drug prices.
  • Consolidation throughout the health care industry was addressed by witnesses and members of Congress as a key factor in increasing costs. Martin Gaynor, an economics professor at Carnegie Mellon, said evidence shows consolidation between close competitors results in higher prices. (There have been almost 1,600 hospital mergers in the past 20 years, resulting in one large powerful health care system dominating the majority of local areas, according to Gaynor). Other witnesses, including Professor Fiona Scott Morton, also pointed the finger at unrestrained monopolies that allow providers to have free rein and charge whatever they want.
Lack of competition means that providers of various kinds… don’t have to compete with one another for the business of patients. When we don’t have competition, we have higher prices and lower quality, and that just hurts everybody.
Fiona Scott Morton economics professor at Yale
  • Witnesses discussed various legislative fixes to bring down prices in many areas of pharmaceutical and medical care. The bipartisan CREATES Act was among those bills that got a thumbs up from experts as a potential fix to the issue of competition, or lack thereof. Strengthening anti-trust laws to tackle the issue of evergreening patents and reforming the broken middlemen rebate system were also among policy ideas on the table.

What’s Ahead