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January 30, 2019

Congress kicks off hearings on Rx drug prices, other health issues

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    Committees in the Senate and House on Tuesday began a series of hearings focused on health care issues, including prescription drug prices, protections for U.S. residents with pre-existing medical conditions, and health insurance options.

    Learn 5 ways to control the flow of drug expenditures

    Senate panel discusses proposals to lower Rx drug prices

    The Senate Finance Committee on Tuesday launched its investigation into rising U.S. drug prices.

    Committee members and witnesses who testified before the panel—which included policy researcher Peter Bach, economist Douglas Holtz-Eakin, and Laura and John Arnold Foundation VP Mark Miller—acknowledged flaws in Medicare Part D and showed bipartisan support for reforming the prescription drug program.

    For instance, Senate Finance Committee Chair Chuck Grassley (R-Iowa) told Axios, "There's reporting that patterns of overbidding exist that may indicate a potential gaming of the system." According to Axios, Grassley's comments referenced a recent Wall Street Journal report suggesting health insurers received $9.1 billion more than they should have from Medicare because of the way they estimated their costs.

    To address those and other drug pricing issues, committee members and witnesses discussed a range of proposals, including those that would:

    • Change how physicians are compensated for drugs covered under Medicare Part B from a share of a drug's price to a flat fee;
    • Change rebates to pharmacy benefit managers;
    • Change drug discount coupons;  
    • Change the structure of "protected classes" under Medicare Part D;
    • Crack down on "anti-competitive" practices in the pharmaceutical industry; and
    • Lower Part D payments to insurers and health care providers.

    Sen. Bill Cassidy (R-La.) during the hearing proposed allowing state governments and payers to access hepatitis C drugs for a flat fee to help ensure patients can obtain the drugs.

    In addition, Sen. Ron Wyden (D-Ore.) floated a much-debated proposal to allow Medicare to negotiate drug prices directly with drugmakers.

    Grassley during the hearing also criticized some pharmaceutical company CEOs who declined to testify before the committee. "We will extend the opportunity again in the future, but we will be more insistent the next time," he said. Grassley can subpoena drug company executives to appear before Congress, but he has told reporters he is not yet prepared to invoke his subpoena power.

    House panel discusses proposals to lower Rx drug prices

    The House Oversight Committee also held a hearing focused on proposals to lower U.S. drug prices.

    During the hearing, Rep. Jim Jordan (R-Ohio), the ranking member on the committee, proposed shortening the length of market exclusivity given to drugmakers for biologic drugs, and Reps. Mark Green (R-Tenn.) and Raja Krishnamoorthi (D-Calif.) similarly proposed shortening the length of market exclusivity given to drugmakers for brand-name drug products.

    Economist Avik Roy, who testified at the hearing, said the Medicare Part B drug pricing model proposed by the Trump administration, which intends to align Medicare payments for certain Part B drugs with prices paid in certain other countries, is flawed. Roy said the pricing model would seek to align Medicare Part B drug prices with prices of the "wrong countries to compare to the United States because they don't necessarily have market-based approaches."

    Roy recommended that lawmakers instead address high drug prices by lowering the costs of drug approvals for biosimilars, allowing patients to substitute biologics with biosimilars, and offering fast-track approvals to drugs with no market competition.

    House panel discusses pre-existing conditions, exchange markets, and more

    Separately, the House Ways and Means Committee on Tuesday held a hearing to discuss:

    • Allowing U.S. residents to buy into Medicare;
    • Lowering health care costs;
    • Improving association health plans (AHPs); and
    • Protections for U.S. residents who have pre-existing medical conditions.

    Republicans and Democrats on the committee indicated their support for offering consumer protections for U.S. residents with pre-existing conditions and allowing U.S. residents who do not qualify for subsidies under the Affordable Care Act (ACA) to purchase AHPs with comprehensive benefits.

    However, Democrats during the hearing criticized the administration's decisions to:

    • Cut funding for navigators that assist U.S. residents with enrolling in exchange plans;
    • Expand access to short-term health plans; and
    • Not defend the ACA in a lawsuit challenging the law's constitutionality  (Baker, "Vitals," Axios, 1/30; Owens, Axios, 1/30; McIntire, CQ News, 1/29 [subscription required]; Facher/Florko, STAT News, 1/29; Huetteman/Bluth, Kaiser Health News, 1/29; Abutaleb, Reuters, 1/29; Siddons/Clason, Roll Call, 1/29).

    Learn 5 ways to control the flow of drug expenditures

    Prescription drug expenditures are the fastest growing component of health care spending. And while reducing unwarranted prescribing variation is the single biggest improvement opportunity, there are several other near-term chances to reduce spending and grow revenues.

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