THEY SAID IT! House Energy & Commerce Lawmakers Roast Big Pharma, Pledge Bipartisan Action and Question the Rebate Rule

May 10, 2019

Washington, D.C. – The House Energy & Commerce Subcommittee on Health held a hearing on the drug pricing supply chain Thursday. During the hearing, lawmakers from both sides of the aisle and several witnesses blasted Big Pharma for the industry’s anti-competitive tactics and price-gouging and praised bipartisan solutions to lower prices. Lawmakers also questioned the proposed Rebate Rule, that would hike premiums on Medicare Part D beneficiaries and cost taxpayers nearly $200 billion.

Representative Anna Eshoo, U.S. Energy & Commerce Health Subcommittee Chairwoman (D-CA): “Today’s hearing focuses on a health crisis facing American families – the soaring costs of prescription drugs … We’ve already taken some first steps, the House passed two drug bills yesterday and we’re pleased about that, but we have a lot of work ahead of us.”

Representative Michael Burgess, U.S. Energy & Commerce Health Subcommittee Ranking Member (R-TX): “I appreciate this hearing today and Madam Chair when we sat down at the beginning of this Congress to … discuss some of the bi-partisan goals we agreed that the drug supply chain hearing that was held [previously] was immensely helpful … The subcommittee has done good work on the issue of drug pricing this Congress, especially with the Purple Book and the Orange Book bills passed yesterday but we need to find a bi-partisan way to move forward with additional legislation.”

Representative Frank Pallone, U.S. Energy & Commerce Chairman (D-NJ): “Fortunately, this Committee is already taking bipartisan action to make prescription drugs more affordable … Yesterday on the House floor we passed two of those bills that will increase the accuracy and transparency of the Food and Drug Administration’s databases that generic and biosimilar manufacturers depend on to bring more affordable prescription drugs to market. And next week the House will consider legislation that has been reported out of our Committee that will further these goals as well, including the CREATES Act and legislation to address pay for delay agreements. Now I’m proud of the bipartisan work but it’s critical that we recognize that the work cannot and will not stop there … I hope that we can continue to work in a bipartisan manner to reduce prescription drug prices and consider real solutions that will lower costs.”

Representative Greg Walden, U.S. Energy & Commerce Ranking Member (R-OR): “I want to thank you Madam Chair for the hearing … I think this really builds on that to educate us about the whole pharmaceutical supply chain … We’re all trying to figure out how do we make sure the medical miracles that are discovered here or elsewhere get to our patients, our constituents in a way they can afford them and take them to save their lives … Just last month this Committee unanimously approved a number of FDA policies designed to increase transparency in the supply chain and bring down prescription drug prices so I hope we can continue to work across the aisle on commonsense policies to address the rising drug costs.”

Representative Buddy Carter (R-GA): “Let us never forget, this is all about the patients. It’s all about lowering prescription drug costs. Folks, I have seen it, I’ve stood at the counter when seniors citizens had to make a decision between buying groceries and buying medicine. When a mother was in tears because she couldn’t afford the medication for her child. This is not a partisan issue, this is a bipartisan issue. And I applaud you again madam chair, thank you for calling this hearing today. It’s been very productive … We all share the same goal and that is lower prescription costs for patients.”

Representative Peter Welch (D-VT): “Look, the bottom line here is that the pharmaceutical industry creates life-saving and extending drugs and pain relieving drugs, that’s a good thing. You’re killing us with the price and that’s on both sides [parties] and we’re trying to get to the bottom of this.”

Lawmakers and witnesses also questioned the merits and effectiveness of the administration’s Rebate Rule, which would hike premiums on Medicare Part D beneficiaries and cost taxpayers nearly $200 billion.

Representative Frank Pallone, U.S. Energy & Commerce Committee Chairman (D-NJ): “Would the Trump Administration’s proposed rule to eliminate rebates in Part D have any measurable impact on the issue of high prices for sole-sourced drugs?”

Amy Bricker, Senior Vice President, Supply Chain, Express Scripts: “No.”

Brent Eberle, Chief Pharmacy Officer, Navitus Health Solutions: “No.”

Representative Billy Long (R-MO): “What are you seeing in terms of changes in premiums and out-of-pocket costs among these plans that apply rebates differently?”

Amy Bricker, Senior Vice President, Supply Chain, Express Scripts: “Every plan is different and the considerations that they’ll take as part of their overall benefit design varies. I will say that the proposed rule by HHS is troubling and that requiring rebates at the point of sale actually doesn’t address the key issue which is overall cost of product. It just rearranges really where the value is deployed and … ten percent of products that are dispensed are brands and of those only 25 percent get a rebate and so it’s a misconception that by putting the rebates at the point of sale that patients will somehow benefit. All will have to be faced with the higher premium and only a few will actually benefit at the point of sale.”

Representative Doris Matsui (D-CA): “I’m thinking about the rebate rule and what your perspective might be on this. Particularly the administration’s proposal that we eliminate certain rebates from that Part D program…So should the rule go into effect it is likely to really significantly alter how we pay for prescription drugs in the Part D program…Ms. Purvis…can you provide AARP’s perspective on the rule?

Leigh Purvis, Director of Health Services Research, AARP: “This is actually something that has raised a lot of concern for us. For a lot of the reasons that you have already mentioned. CBO has estimated this will increase federal spending substantially. It will also increase premiums across the board. We’re also a bit concerned about the fact that there isn’t a whole lot of information about how many people are actually going to meaningfully see a reduction in their out of pocket costs… The other thing that we really have been cognizant of is that the vast majority of the estimates we have seen indicate that list prices will not change and CBO also includes some language that makes it seem like price increases will just continue, business as usual.”

Lawmakers also blasted Big Pharma for their anti-competitive and price-gouging tactics.

Representative Anna Eshoo, U.S. Energy & Commerce Health Subcommittee Chairwoman (D-CA): “I just want to comment that Amgen has gone to court to tie-up biosimilars. That should be understood here.”

Representative Kathy Castor (D-FL): “The Committee has heard expert testimony … the brand manufacturers are using deceptive litigation strategies and gaming regulatory requirements to keep competition out of the market. One example of this behavior is the pay for delay agreements and I’m very concerned about how pay for delay settlement agreements complicate drug pricing.”

A sentiment shared by witnesses, who also praised bipartisan, market-based solutions like the CREATES Act:

Estay Greene, Vice President of Pharmacy Services, Blue Cross Blue Shield of North Carolina: “In just the last three years, drug manufacturers have increased the cost for our customers by $360 million but only increased rebates by $130 million – pocketing the $230 million of those costs increases. To significantly address high costs, we have to address the main driver, expensive prescription drugs. Policies we support include the CREATES Act, which is a bi-partisan market-based solution that confronts some anti-competitive behaviors that are keeping lower priced drugs off the market such as brand name drug manufacturers refusing to sell their drugs to generic competitors.”

Lynn Eschenbacher, Chief Pharmacy Officer, Ascension: “Drug costs are the fastest growing part of our supply chain. In the span of four years, Ascension alone has had to mitigate against a cumulative 34% increase in drug costs totaling $564 million and that’s after 340B discounts … We typically experience up to 40 new price increases each week and see upwards of several hundred price increases each January and July. In January we saw thousands of price increases this year. We have no leverage when it comes to drugs that face no competition. Manufacturers know this. … We greatly appreciate the bipartisan work this committee has already done on CREATES and pay for delay. We agree more can and should be done.”

Dr. Jack Resneck, Chair, Board of Trustees, American Medical Association: “High prices for drugs occur across many areas of the pharmaceutical industry, from new specialty drugs, to older drugs that inappropriately extend the market exclusivity… What do these share? A lack of pricing transparency. We need basic public information to inform policy solutions. Some of my patients with melanoma and severe psoriasis need new targeted biologics. We expect new life altering discoveries to be expensive, but I’ve watched as costs continue to escalate years after these drugs launch.”

Leigh Purvis, Director of Health Services Research, AARP: “There is no reason that Americans should continue to have to pay the highest brand name drug prices in the world. No one should be forced to choose between buying groceries and buying the prescription drugs that they need…Our campaign calls on state and federal legislators to enact solutions that target the root of this problem: the prices set by drug manufacturers.”

CSRxP is encouraged by the building momentum in Congress to tackle the out-of-control prescription drug prices and applauds members’ commitment to passing bipartisan, market-based solutions like the CREATES Act. As one-in-four Americans can’t afford their prescription drug medications, it’s imperative that Congress continues to focus on solutions that hold Big Pharma accountable by increasing competition and boosting transparency.