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Two House Committees Examine Rising Prescription Drug Prices, and What Can Be Done to Lower Them

Yesterday was a banner day for the House of Representatives's drug pricing efforts. Two Committees, the House Ways and Means's Health Subcomittee and the House Judiciary Committee's Antitrust Subcommittee, held hearings on rising drug costs and ways to reduce them. And next week the House Energy and Commerce Committee will hold its first hearing on specific bills-a sign that proposals are making their way forward.

The Health Subcommittee's focus was on promoting competition to lower Medicare drug prices. Representative Lloyd Doggett (D-TX-25), a longtime champion of lower drug prices, chaired the hearing, and said there was no miracle cure for rising costs, but an excellent bill would be to give Medicare the power to negotiate lower drug prices with companies. He also urged legislation to end pay for delay settlements between drug companies that delay generic drugs and supported the CREATES Act, which requires brand drug companies to give generic companies samples so they can develop more affordable medicines. Doggett also pointed out that 74% of all pharmaceutical patent applications are not for new medicines but old medicines, and that patent abuse has become a major problem.

The hearing's witnesses were Professor Robin Feldman of UC Hastings, Ameet Sarpatwari (Assistant Director of the Program of Regulation, Therapeutics, and Law, Harvard Medical School), Amy Kapcynski (Co-Director of the Global Health Justice Partnership, Yale Law School), Frederick Isasi, Executive Director of Families USA, and Douglas Holtz-Eakin of the American Action Forum.

They spoke eloquently about the major problems that lead higher Medicare drug costs. Professor Feldman said that "our regulatory and payment systems allow companies to push patients to more expensive drugs and discourage cheaper ones." Drug companies ensure their products get favorable treatment by paying PBMs rebates, and they create obstacles to generic competition. She recommended closing tax loopholes for drug companies, having only one patent for drugs, and providing more funding for the NIH. Kapcynski pointed out that patent abuse gives drug companies extended monopolies, and they are behaving just like monopolists normally do- charging exclusively high prices, creating patent thickets, and extending their exclusive periods.

The Antitrust Subcommittee hearing looked at consolidation and anticompetitive conduct in health care markets. Chairman and Representative Jerry Nadler (D-NY-10) observed that generic drugs cause drug prices to drop dramatically, and that it is unacceptable that people can't afford the medicine they need to live. Drug companies engage in anticompetitive behavior at every turn. He plans to introduce legislation to stop pay for delay agreements, and also supports the CREATES Act.

Rep. Doug Collins (R-GA-9) delivered a powerful speech criticizing pharmacy benefit managers (PBMs) for their role in increasing drug prices. "PBM markets are incredibly concentrated," he said. "Three PBMs control 85% of the market." He said PBMs have consolidated horizontally and vertically, that they are trying to kill independent pharmacists, and that they are costing patients money. Recently Rep. Collins has introduced a bill requiring PBMs to pass pharmacy rebates and price concessions on to patients at the point of sale, and he hoped it would pass.

Both hearings were excellent, with thoughtful, fact filled discussions about how to lower drug costs. Next week on Wednesday, the House Energy and Commerce Committee is holding its own on drug prices, and it is possible the hearing will focus on specific bills. It is time for Congress to roll up their sleeves and get to work, ensuring that everyone has access to affordable prescription drugs.

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