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Senate Committee Holds Second Hearing on Drug Delivery System and Drug Prices

This morning, the Senate Health, Education, Labor, and Pensions Committee held the second of three hearings on the cost of prescription drugs and how the drug delivery system affects what patients pay for medicines. Senators clashed with health industry executives and asked tough questions about how these companies contribute to higher drug prices.

Senator Lamar Alexander (R-TN), chair of the Committee, announced that the hearing's goal was to learn about the factors contributing to patients paying such outrageous drug prices. The witnesses were:

Lori M. Reilly, Executive Vice President, Policy, Research & Membership, Pharmaceutical Research and Manufacturers of America, Washington, D.C.

Chester “Chip” Davis, Jr., President and Chief Executive Officer, Association for Accessible Medicines, Washington, D.C.

Elizabeth A. Gallenagh, Senior Vice President Government Affairs and General Counsel, Healthcare Distribution Alliance, Arlington, VA.

Mark Merritt, President and Chief Executive Officer, Pharmaceutical Care Management Association, Washington, D.C.

And Thomas E. Menighan, BSPharm, MBA, ScD(Hon.), FAPhA, Executive Director and Chief Executive Officer, American Pharmacists Association, Washington, D.C.

Senator Patty Murray (D-WA), the Committee's ranking member, spoke about the need to address soaring drug costs. She and other Senators constantly hear from constituents who are forced to choose between medicines and housing, transportation, and even food. Democrats have introduced many bills to allow importation of drugs, to allow Medicare to negotiate lower drugs, and to promote generic drug access, to name just a few. The Trump administration, she said, also needs to be a partner in this effort and not sabotage health care.

The witnesses for the various companies all claimed to be doing their best to lower drug prices, and pointed fingers at each other. After they delivered their opening statements, Senator Alexander wondered if it would be better to get ride of health care rebates altogether and simply have direct negotiations between PBMs and manufacturers. The witnesses rejected that idea. Senator Murray accused the brand name drug companies of trying to protect their monopolies and engage in price gouging at the expense of consumers. Senator Alexander also asked the witnesses if they would support importation of cheaper prescription drugs from other countries. Unfortunately, they all opposed that idea, and offered disingenuous reasons and half-truths for why it would supposedly harm consumers.

Senator Susan Collins (R-ME) expressed frustration with the lack of transparency in the health care system, and asked the PBM witness whether he supported gag clauses where PBMs forbid pharmacies from telling consumers about cheaper options to buy drugs. Merritt, CEO of PCMA, the main PBM lobbying group, responded that this was an outlier behavior and not the norm (which is incorrect, it is a common practice), and that he did not support it.

Senators Tim Kaine (D-VA), Elizabeth Warren (D-MA), and Al Franken (D-ME) all mentioned how high prices harm patients. Senator Maggie Hassan (D-NH) denounced Allergan's transfer of Restasis patents to an Indian tribe in an attempt to maintain its monopoly and charge consumers higher prices. Warren attacked brand companies for opposing market-based solutions to reduce prices, like the importation of drugs, and said their industry was based on government granted monopolies. Finally, Senator Franken commented that "each of you claims to be responsible for lowering drug prices", but the United States spends more of drug then any other developed country.

The hearing concluded shortly after noon. We urge the Committee to vote on measures to reduce drug prices and promote information about the industry. The American people have waited far too long for this.

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