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In Complementary Hearings, Senators and Representatives Vow To Tackle High Drug Prices

Yesterday, on January 29th, both houses of Congress focused on rising drug prices, responsibility for this unsustainable situation, and how to lower drug costs. The House Committee on Oversight and Reform held an all day hearing on the actions of drug companies and skyrocketing drug prices, while the Senate Finance Committee's hearing focused on the drug pricing system and took a more general view. But in both hearings, legislators attacked drug companies and PBMs (pharmacy benefit managers), denounced price gouging, and warned that the days of rising drug prices with no consequences were over.

Representative Elijah Cummings opened the House hearing with a powerful statement about the need for action. He mentioned that he has been trying to investigate prescription drug prices for a decade, that drug companies raise prices often overnight and harm patients, and that Big Pharma is one of the most powerful and profitable lobbies in Washington, D.C. "There are powerful interests that do not want us to interfere with their profits," he warned. But there is a bipartisan consensus that the ongoing escalation of drug prices by drug companies is unsustainable.

Both Democrats and Republicans criticized all actors in the drug pricing system. Representative Peter Welch bluntly asked that if high drug prices were needed to promote innovation, then why do drug companies spend more money on advertising and mergers instead of research and development? He also called for an end to evergreening (making small changes to drugs to extend patents and prolong monopolies) and other patent abuses. Other representatives spoke about the need for Medicare to have the power to negotiate lower drug prices, the need to hold PBMs accountable for their role in driving up drug costs, and the urgency of encouraging drug competition and fixing the markets.

The Committee also heard from a distinguished and knowledgeable panel of witnesses. They were Antroinette Worsham, a mother whose children need insulin to survive, Catherine Alicia Georges from AARP, and Professors Aaron Kesselheim and Gerard Anderson. Professor Anderson, in response to a question, said that he favored either getting rid of PBMs or drastically reforming incentives so they no longer contribute to high drug costs.

One representative, Gerry Connolly of Virginia, observed that in most countries drugs are launched and the prices go down, but in America the opposite occurs. Drugs are launched and then the prices go up. He pointed out that Humira, the world's most popular drug, costs $2,269 in the United States, but only $822 in Switzerland, and that insulin prices should not be so high-insulin has been around since the 1920s! Professor Kesselheim added that the insulin is mostly the same, with the high prices due to the patents on delivery devices made by the drug companies, who fight to prolong their monopolies and stifle competition. The government should step in and ensure people have access to insulin.

The Senate Finance Committee's hearing proceeded along similar lines. Senator Chuck Grassley chaired the hearing and expressed disappointment that most drug companies refused to come and testify. Senator Ron Wyden was even more upset, saying that, "Even the Big Tobacco CEOs were willing to come to Congress and testify, and they made a product that kills people. They all lied to me, but at least they showed up. The drugmakers won’t even do that much."

Wyden also launched a fierce attack on PBMs, saying, "I am especially troubled by health care middlemen who skim off enormous sums of money when there is scant evidence that the patients get a better deal. That sure looks like the case with the pharmaceutical benefit managers, or PBMs. They’re supposed to negotiate better deals, but it sure seems like they take a big cut and inflate the prices. The three biggest PBMs are among the 25 biggest companies in America, so I appreciate this hearing."

Senators and representatives repeated this message again and again: the old days where drug companies and PBMs could raise prices and abuse their power with no consequences are over. This is a very encouraging sign for consumers. We urge Congress to pass reforms to lower drug prices by promoting competition, ending patent abuse, regulating PBMs, and using the government's power to stop price gouging, and we eagerly await the next set of hearings.

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