THEY SAID IT! LAWMAKERS AND EXPERTS CALL OUT BIG PHARMA’S ANTI-COMPETITIVE PLAYBOOK, URGE CONGRESS TO BOOST GENERIC AND BIOSIMILAR COMPETITION

U.S. House Energy & Commerce Health Subcommittee Hearing Puts Big Pharma on Hot Seat for Rising Launch Prices, Price Hikes Exceeding Inflation, and Anti-Competitive Tactics That Keep Drug Prices High

In case you missed it, the U.S. House Committee on Energy and Commerce Health Subcommittee held a hearing Wednesday titled “Lowering Health Care Costs for All Americans: An Examination of the Prescription Drug Supply Chain.”

During the hearing, lawmakers and expert witnesses highlighted how Big Pharma’s egregious pricing practices and anti-competitive tactics that block more affordable alternatives like generics and biosimilars from reaching the market are driving rising health care costs. Experts urged Congress to enact bipartisan, market-based solutions to lower drug prices, like the Biosimilar Red Tape Elimination Act, and additional solutions to crack down on Big Pharma’s patent abuse and eliminate barriers to greater competition.

During the hearing, lawmakers from both parties and industry experts highlighted the importance of promoting competition and cracking down on anti-competitive tactics used by pharmaceutical companies to extend exclusivity and keep drug prices high, including Big Pharma’s exploitation of patent thickets, increasing launch prices on new medications, price increases exceeding inflation and prioritizing shareholder payouts over patients.

U.S. Representative Kat Cammack (R-FL): “Between 2021 and 2024, median launch prices for new drugs more than doubled, and in a single year, over 1,000 existing drugs saw price increases averaging more than 30 percent. That is far above inflation.”

U.S. Representative Greg Landsman (D-OH): “The number I have in terms of Big Pharma and how much they pulled in profits last year is around $130 billion… You can invest those dollars in innovation, R&D, employees, lowering costs, investing in pricing – which is a strategy. Or it goes up to the investors and the stock buybacks and dividends. Our understanding is that of the $130 billion made last year, $84 billion, or the vast majority of the profits went up, not down, right? So, it went to the shareholders to pay out dividends. That’s a decision in terms of how to invest these additional resources, and I’m curious now that more and more Americans are struggling to pay their bills in general, in particular, their healthcare bills… That means 70 percent, even at 30 percent, 70 percent of those profits are going elsewhere, not in R&D.”

U.S. Representative Diana Harshbarger (R-TN): “I think the unaffordability of a lot of specific drugs is a real problem, and some of that has to do with how our current patent system works… Large employer health plans see firsthand how patent thickets delay competition and keep drug prices high for workers and retirees.”

John Murphy, President and CEO, Association for Accessible Medicines: “Brand manufacturers increasingly deploy patent thickets to block competition long after true innovation has been rewarded. Congress can curb these tactics by strengthening patent review processes, streamlining patent litigation and protecting legitimate tools like skinny labeling that were built into the congressional legislation establishing these markets years ago.”

David Marin, President and CEO, Pharmaceutical Care Management Association (PCMA): “Not only do drug companies enjoy extraordinary government protections from competition, but they then game the system over and over and over again to further prevent competition and block generics from reaching patients… They wield enormous power over the prices of generic drugs and what pharmacies pay for medicines with essentially no oversight.”

Rachel E. Sachs, Professor of Law, Washington University in St. Louis: “Pharmaceutical manufacturers benefit from a combination of government-provided exclusive rights… This combination limits competition and ties payers’ hands, allowing manufacturers to set and maintain high prices over time.”

Ranking Member Diana DeGette (D-CO) expressed frustration with PhRMA’s lack of meaningful answers to how the pharmaceutical industry was trying to deliver lower prescription drug prices for American patients:

U.S. Representative Diana DeGette (D-CO), Ranking Member, House Committee on Energy and Commerce Health Subcommittee: “So, Mr. Chairman, I have to ask you. I don’t understand what this witness is doing here if she can’t give me any details about what her members are doing to try to reduce the cost of drugs… They say they’re reducing prices, then they send somebody over here who can’t even answer the question.”

Multiple witnesses also reinforced that it is brand name drug companies – not others in the supply chain – that set prices on the products they market:

Chester “Chip” Davis, Jr., President and CEO, Healthcare Distribution Alliance: “Manufacturers set the list price.”

Rachel E. Sachs, Professor of Law, Washington University in St. Louis: “[Drug makers] set the list price, yes.”

Lawmakers and experts emphasized that robust generic and biosimilar competition is one of the most effective tools to lower drug prices and deliver savings for patients, taxpayers and the U.S. health system.

U.S. Representative Troy Balderson (R-OH): “The U.S. generics market has historically driven price reductions of up to 95 percent and expanded patient access through increased competition.”

John Murphy, President and CEO, Association for Accessible Medicines: “Generics and biosimilars are the single largest driver of prescription drug affordability in the United States. In 2024 alone, they generated $467 billion in savings for patients in the healthcare system. Those savings flow across Medicare, Medicaid, private insurance, and directly to patients managing chronic and complex conditions. Yet despite that success, the full affordability potential of generics and biosimilars is being suppressed by market distortions and outdated policies. Congress has a real opportunity to unlock even greater savings simply by allowing these markets to function as intended. For instance, generic medicines, while accounting for almost 90 percent of prescriptions filled in the United States, unfortunately, only represent 12 percent of total drug spending. This is down from 27 percent just a decade ago. In fact, generics right now are the only sector of the prescription drug market where total spending has declined over the past decade, even as volume has increased. Meanwhile, overall drug spending continues to rise because costs are increasingly concentrated in a small number of high-priced brand and specialty medicines. In 2023, spending on just two brand medicines, Ozempic and Humira, exceeded the total spending of more than 1,000 generic medicines combined in the United States. That imbalance should concern anyone focused on affordability.”

Witnesses and lawmakers pointed to bipartisan, market-based solutions that would help curb Big Pharma’s anti-competitive tactics, bring more affordable alternatives to market, more quickly, and lower prices for patients.

James Gelfand, President and CEO, The ERISA Industry Committee: “The FDA and PTO legislation would cut down on litigation time and allow biosimilars to enter the market in a quicker and more competitive fashion. But right now, inconsistent filings allow branded drugs to draw out litigation and keep biosimilars off the market much longer than Congress intended. Improving those disclosures would preserve the 20 years of patent life that those innovators get, but it would also ensure that the inherent features are not inappropriately staggered in order to make longer patent life. So, as an innovator under the legislation, you get to choose, you know, its trade secrets, or its patents, but you can no longer jump back and forth between both in order to maximize how long you got exclusivity.”

John Murphy, President and CEO, Association for Accessible Medicines: “FDA should be clearly empowered by Congress to streamline outdated requirements that delay competition, including eliminating unnecessary clinical studies for biosimilars and aligning U.S. policy with global standards by deeming biosimilars interchangeable upon approval.”

Watch the full U.S. House Committee on Energy and Commerce Health Subcommittee hearing HERE.

Read more about how biosimilar competition lowers out-of-pocket costs for patients HERE.

Read more on how Big Pharma games the system to block competition and keep drug prices high HERE.

Read more on bipartisan, market-based solutions to hold Big Pharma accountable HERE.