Policy Makers Seek Answers for High Costs of Prescription Drugs

Members of Congress sought to deconstruct the drug supply chain Thursday in an effort to find ways to lower prescription drug prices.

Hosted by the House Committee on Energy & Commerce, the investigational hearing drew testimony from health care industry experts representing drug companies, insurers, and patient advocacy groups.¹

“It’s critical that we have a full understanding of how drugs are developed, priced, delivered, purchased, and dispensed so we can consider policies that will best improve the system to drive down costs and save consumers money. Drug prices continue to dramatically increase, while consumers pay more and more out-of-pocket for the medications they need,” said Rep. Frank Pallone Jr. (D-NJ).¹

“In fact, nearly 1 in 4 Americans who take prescription drugs say it is difficult to afford their medications," he said. "This is simply unacceptable.”

The nature of the drug supply chain is complex with multiple stakeholders at each step in the price negotiation process, said Rep. Michael Burgess, MD (R-TX).¹

“At the end of the day, it is the patient who matters most to this conversation. They are bearing the cost of these medications," Burgess said.

"They are the ones who stand to benefit from the cures or the maintenance of good health,"¹ he said. “Improving access to life-saving treatments for consumers is a bipartisan priority.”

In their testimony, expert witnesses cited multiple causes for high prescription drugs prices.

Those causes include high health plan deductibles, a lack of transparency, and medication rebates and discounts that do not reach consumers, they said.¹

In his testimony, Justin McCarthy, Pfizer’s senior vice president of the Patient & Health Impact Group, also cited an increase in specialty drugs that were not a factor when Part D was implemented.¹

“These factors are all coming together to create an affordability crisis for patients,” he said.¹

“Our health care system needs to be simpler and more transparent, and it needs to incentivize innovation while simultaneously ensuring access," McCarthy said. "And most importantly, we need to put patients first.”

AARP's Leigh Purvis, director of health services research, testified that her organization has identified cost-related issues with high-priced specialty drugs that lack competition and more common brand name drugs with price increases that exceed inflation rates.

“A recent Rx Price Watch Report found that the retail prices of widely used brand name drugs increased by an average of 8.4% in 2017, 4 times the rate of inflation,” she said.¹ “Current prescription drug price trends are simply not sustainable.”

In a statement submitted to the House Committee for the hearing, the American Society of Health System Pharmacists (ASHP) also addressed a need for more competition in drug manufacturing.

The organization supports legislation that loosens restrictions preventing generic drug companies from obtaining samples needed to manufacture a competing product.²

"Price increases often occur for drugs that have only 1 or 2 manufacturers," ASHP said in its statement.² "ASHP encourages the committee to consider policy approaches to stimulate competition for generic products with few manufacturers."

McCarthy made 4 suggestions for enacting change that he said could lead to lowering drug prices.

He recommended accelerating a shift to value-based care; capping out-of-pocket medicine costs for seniors; removing barriers to lower-cost biosimilars, such as anticompetitive contracts; and a shift away from rebates to upfront discounts that pass the savings to patients.¹

“Our system needs to be simpler and more transparent, and it needs to incentivize innovation while simultaneously ensuring access,” McCarthy said.¹

Brent Eberle, senior vice president and chief pharmacy officer for Navitus Health Solutions, a pharmacy benefit manager (PBM) that he said is fully transparent, recommended increasing transparency for PBMs by removing conflicts of interest.¹

“Most PBMs accept money from drug manufacturers in the form of rebates, administrative fees, data fees, and other financial incentives with numerous designations. We believe that when PBMs retain payments from drug manufacturers, it creates misaligned incentives, where the PBM is actually working for the drug manufacturers, and not just for the benefit plans and their members,” Eberle testified.¹

Jack Resneck, MD, chairman of the board of trustees of the American Medical Association (AMA), said that his organization offers a large body of policies for addressing prescription drug prices with the goal of improving patient access.¹

AMA recommends that policymakers ensure prescribers have accurate point-of-care coverage and patient cost-sharing information as part of their workflow including in the electronic health record; increase competition and curtail anticompetitive practices; modernize and streamline the utilization control methods used by health insurers in response to higher prescription drug costs; and prioritize legislation and regulatory action that would require manufacturer and pharmaceutical supply chain transparency.¹

Lawmakers need to “follow the money” for more answers, said Subcommittee Chairwoman Rep. Anna Eshoo (D-CA).

“We have to follow the money so that we can save money and bring some sanity to this system,” she said.¹ “We’re examining the system from beginning to end because in order to fix it, we must understand it, and then, we’re going to act.”

In a joint statement released Thursday, Pallone and the committee’s ranking member Greg Walden (R-OR) said that they are committed to working together on bipartisan legislation aimed at protecting patients and their families from surprise medical bills and helping them avoid crippling financial debt that comes with these medical bills.³

“No family should be left in financial ruin through no fault of their own, which is why we have been working together on a bipartisan solution to protect patients that we hope to announce soon,” according to the statement.³

Other experts testifying before the House committee on Thursday included Richard Ashworth, president of pharmacy at Walgreens; Amy Bricker, senior vice president, supply chain for Express Scripts; Lynn Eschenbacher, chief pharmacy officer for Ascension; Estay Greene, vice president of pharmacy services for Blue Cross Blue Shield of North Carolina; Jeffrey Hessekiel, executive vice president and general counsel for Exelixis; and Kave Niksefat, vice president of value and access for Amgen.

According to Eshoo, her staff reached out to nearly a dozen drug companies, and few were willing to testify at the hearing.

Express Scripts was the only major PBM that agreed to testify, while others declined, she said.¹

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References

• House Committee on Energy & Commerce. Hearing on “lowering prescription drug prices: deconstructing the drug supply chain.” energycommerce.house.gov/committee-activity/hearings/hearing-on-lowering-prescription-drug-prices-deconstructing-the-drug. Presented May 9, 2019. Accessed May 9, 2019.
• ASHP statement on drug pricing hearing. ASHP [email]. Created May 9, 2019. Accessed May 9, 2019.
• Pallone & Walden: We are committed to fixing surprise billing [news release]. Washington, DC; May 9, 2019: House Committee on Energy & Commerce. energycommerce.house.gov/newsroom/press-releases/pallone-walden-we-are-committed-to-fixing-surprise-billing. Accessed May 9, 2019.