House Ways and Means Committee Examines Measures to Lower Drug Costs

Yesterday, on February 12th, the House Ways and Means Committee held its first hearing on the rising costs of prescription drug prices and how to reduce them. During a lively three and a half hour meeting, representatives asked tough questions about pharmaceutical companies, pharmacy benefit managers (PBMs), and patent abuse, and said they were determined to enact a sweeping agenda to lower drug prices.

The witnesses were Odunola Ojewumi (a patient from Maryland), Mark Miller (Vice President of Arnold Ventures), Rachel Sachs (Law Professor at Washington University), Alan Reuther (Legislative Consultant for UAW Retiree Medical Benefits Trust), and Joseph Antos (scholar at the American Enterprise Institute).

The hearing began at 10 AM. Representative Richard Neal (D-MA) opened with a blunt statement that drug prices are far too high, that this situation is unsustainable, and that one of his constituents had to pay $4,600 for her drugs. There is no silver bullet, and fixing this problem will require multiple bills. Neal mused about requiring drug companies to pay a rebate if their drug prices increased too much, and he said he was having encouraging conversations with Secretary Alex Azar on this.

Ms. Ojewumi gave moving testimony about her life and the cost of drug price gouging. She runs an small education nonprofit that provides scholarships for disabled students, had a heart and kidney transplant years ago, and requires immunosuppressive therapy in order to stay alive. Without insurance, the drugs needed for this therapy cost $2,000 for one month's treatment. Sometimes she hasn't taken her medicine because the costs are too high. Corporate greed and lack of regulation are responsible for this state of affairs. She concluded that drug manufacturers are preying on the most vulnerable people (the chronically ill, children, and people who are disabled) and urged strong reforms to lower prices.

Mr. Miller spoke eloquently about a number of subjects, especially the need to stop patent abuse by brand name drug companies. He observed that drug manufacturers devote lots of resources to protecting their government granted monopolies and extending them beyond their normal periods, and they even try to stifle competitors! This must stop. Congress should pass the CREATES Act to promote generic drugs and outlaw pay for delay settlements (where brand drug companies pay generic companies not to develop generic drugs), and give Medicare the power to negotiate lower drug prices.

Professor Rachel Sachs emphasized the need to eliminate incentives for PBMs to demand higher rebates and put more expensive drugs on their formularies, both of which drive up the costs of medicine. Alan Reuther agreed with these statements, and urged Congress to foster greater competition among insulin manufacturers and throughout the drug supply chain.

The questions and answers from the Committee lasted a long time. Several representatives spoke about patents and how drug companies were manipulating them in violation of the spirit of the law, if not the letter. Others mentioned PBMs and how they actually raise drug costs instead of lowering them. And almost all members told stories of constituents coming to them in tears, saying skyrocketing drug costs were making them choose between their medicine and basic necessities like food and rent.

Rep. Lloyd Doggett (D-TX) informed everyone that Humira costs $2,669 per cartoon in the United States, which is far more expensive than in European countries. Also, the drug was introduced in 2002, but because of patent abuse, it won't face generic competition until 2023. That is a 21 year period with competition! Rep. Earl Blumenauer (D-OR) also pointed out that for all the talk about negative consequences, there are also consequences to doing nothing to lower drug costs. America is currently rationing drugs right now on the basis of price!

With this hearing concluded, the House Committee on Oversight and Reform, the Senate Finance Committee, and the House Ways and Means Committee have all held excellent hearings on rising drug prices. Now the challenge is to draft and build support for various bills that will lower drug costs by giving Medicare to the power to negotiate prices, stopping price gouging, regulating PBMs and stopping their abuses, ending patent abuse by brand name drug companies. This is a big challenge, but the costs of inaction are far too high. Americans deserve access to affordable prescription drugs, and Congress should move swiftly to make it happen.