Senate Aging Committee's Third Hearing on Drug Prices Is Full of Anger and Determination

This morning the Senate Special Committee on Aging held its third hearing on rising prescription drug prices and how to reduce them. The hearing was marked by anger and frustration from the Senators, and a strong determination to take sweeping measures to lower the cost of medicines.

Senator Susan Collins (R-ME) chaired the hearing and said, "the American people are clamoring for action." She was pleased that the House and Senate were acting on a number of proposals, including her proposal to stop patent abuse and measures to address price transparency and out of pocket costs under Medicare Part D. "Our drug pricing system is opaque and rife with misaligned incentives," she remarked.

Senator Robert Casey (D-PA) spoke about how rising drug costs were hurting American families and he was eager to bring prices however. However, giving Medicare the power to negotiate lower drug costs were essential. Casey remarked that "I notice not a single one of the Medicare negotiation proposals has been endorsed by the administration. This is our sacred responsibility!" He also pointed out that the Trump administration's efforts to undermine Medicaid and the Affordable Care Act will harm efforts to lower drug prices, because more people will be uninsured.

The witnesses spoke next. They were:

Demetrios Kouzoukas, Principal Deputy Administrator and Director of the Center for Medicare and Medicaid Services

Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, Food and Drug Administration

Vicki Robinson, Senior Counselor for Policy, U.S. Department of Health and Human Services, Office of Inspector General

Dr. Woodcock gave a strong presentation about how the Food and Drug Administration (FDA) was working hard to approve many generic drugs and reduce prices. In 2018 the FDA approved over 1,000 generic drugs, a new record. The FDA is also identifying anticompetitive abuses by drug companies and doing its best to fix them. She appreciated the Committee's work on the CREATES Act, which would promote generic drugs by ensuring generic companies have access to the samples they need to make them.

Robinson testified in support of the Department of Health and Human Services's (HHS) rule to eliminate safe protection for most PBM rebates and ensure that the rebates are passed on to consumers. Currently drug companies negotiate rebates with PBMs and insurance companies. However, the rebates do not necessarily help beneficiaries because they aren’t reflected at the pharmacy county. HHS's proposed rule is intended to fix this; currently the safe harbor regulations under the federal anti-kickback statute protect rebates and discounts. The rule removes those protections for Medicare Part D plans and managed care groups. It would add a new protection for point of sale discounts that are reflected at the point of sale, and a new protection for fixed fees that drug companies would pay to PBMs for their services. HHS is currently working on the final rule.

Several Senators were angry about rising insulin prices-Collins pointed out that insulin was developed almost a century ago and yet she heard from constituents whose insulin prices increased 240% over the past decade, which is outrageous! Senator Richard Blumenthal (D-CT) demanded to know what the administration was doing to lower insulin costs. Mr. Kouzoukas responded that the rebate rule would help lower them. Both Collins and Blumenthal asked that he follow up with additional evidence of this.

Senator Mike Braun (R-IN) noted sourly that America's health care system lacked transparency and real competition. He also denounced PBMs as unproductive middlemen.

Multiple Democrats Senators advocated for giving Medicare the power to bargain for lower drug costs with drug companies. Blumenthal asked why the Trump administration did not support these common sense proposals, and Kouzoukas responded feebly that Medicare also negotiated for lower drug costs and that they didn't think this action would be helpful.

After an hour and forty minutes, Collins and Casey thanked the witnesses for coming. The hearing was relatively short, but the Senators left no doubt that they wanted action, and that bills to lower drug prices would hopefully soon advance. We applaud their efforts and ask the proposals be comprehensive and strong in order to ensure affordable medicines for all.