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House Committee Weighs Drug Pricing Proposals

Posted 12 February 2019 | By Michael Mezher 

House Committee Weighs Drug Pricing Proposals

The House Ways and Means Committee on Tuesday heard testimony on ways the US could address the rising cost of prescription drugs.
The hearing follows two recent Congressional hearings on drug pricing held by the House Oversight Committee and Senate Finance Committee late last month and precedes a much-anticipated Senate Finance Committee hearing on 26 February where the CEOs of drugmakers AbbVie, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer and Sanofi are expected to testify.
Rising prescription drug prices have been a fiercely debated political issue in recent years, with both Democrats and Republicans in Congress and the Trump administration all pitching their own solutions, including allowing prescription drug importation from Canada, further Medicare Part D negotiations, setting international reference pricing and reducing barriers to competition.
The Department of Health and Human Services also recently proposed a rule to eliminate protections for rebates paid to pharmacy benefit managers (PBMs), which the administration says would lower costs for consumers.
While drugmakers, including Eli Lilly and Novartis, have backed the proposal, the Pharmaceutical Care Management Association, the trade group representing PBMs, has argued that PBMs help lower costs by negotiating rebates.
During the hearing, Ways and Means Committee Chairman Richard Neal (D-MA) cited the finger pointing between the various actors involved in prescription drug spending.
“Drug companies point to the PBMs, who point to the insurance companies, who point to the hospitals. The one group that is not the problem but is the biggest victim is indeed the patients,” he said, adding that Congress will need to take a “multi-pronged” approach to address high prescription drug spending involving changes at the US Food and Drug Administration, Centers for Medicare & Medicaid Services (CMS) and potentially changes to the tax code.
Neal, along with ranking member Kevin Brady (R-TX) said they are committed to working together “to take meaningful action to lower the cost of prescription drugs in the US health care system.”
However, despite the promise to work together, members of the two parties are not fully aligned on what steps to take.
One area of disagreement is over whether Medicare should be allowed to negotiate drug prices in its Part B and Part D programs.
While advocating for Medicare Part B and Part D reforms, Brady dismissed the notion that the government should negotiate drug prices. “When Washington negotiates in government-run healthcare programs, taxpayers often end up bearing the cost while Americans can be denied access to the most innovative breakthrough medicines available to others in the private market,” he said.
Instead, Brady argued that “empowering patients to choose the most affordable medicines for them and eliminating the incentives in Medicare that reward bad actors and lead to high prices” would be a more effective solution, referring Medicare’s percentage-based reimbursement structure which some argue incentivizes prescribing more expensive drugs.
Mark Miller, executive vice president of health care at Arnold Ventures, told the committee that moving to a flat fee-per-prescription model for Medicare Part B could help to curb some spending.
Both Miller and Rachel Sachs, associate professor of law at Washington University in St. Louis, also said that the US could save money on prescription drugs by tying their prices to an international reference list, as the Trump administration recently proposed.

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