You are here

House Ways and Means Committee Addresses Rising Cost of Prescription Drugs in Tuesday Hearing

On Tuesday, the House Ways and Means (W&M) Committee held a hearing titled "The Cost of Rising Prescription Drug Prices." The hearing followed two recent hearings on drug pricing held by the House Oversight Committee and the Senate Finance Committee, the latter of which will host a much-anticipated hearing later this month where, as we have reported, CEOs of major drug manufacturers, including AbbVie, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer, and Sanofi, are expected to testify.

In a statement released by W&M on Wednesday, the committee reiterates that healthcare remains the "number one concern for Americans," and rising costs are the primary reason. In its second hearing on healthcare in the 116th Congress, committee members focused on the problem of the rising costs of drugs—and what Congress can do to solve it. Prior to the hearing, W&M Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) released a joint statement expressing their commitment to tackle this issue together. In addition, Rep. Brady and W&M Health Subcommittee Ranking Member Devin Nunes (R-CA) sent a letter to Chairman Neal pledging to work together to achieve lower drug prices.

The high cost of prescription drug prices is a priority of the new Congress, with Democrats and Republicans, as well as the Trump administration, all proposing solutions, such as permitting prescription drug importation from Canada, further Medicare Part D negotiations, setting international reference pricing, and reducing barriers to competition. The Department of Health and Human Services (HHS) also recently proposed a rule to eliminate protections for rebates paid to pharmacy benefit managers (PBMs), which the administration says would lower costs for consumers.

During the hearing, Chairman Neal highlighted the finger-pointing among the various stakeholders involved in prescription drug spending: "Drug companies point to the PBMs, who point to the insurance companies, who point to the hospitals. The one group that is not the problem but is the biggest victim is indeed the patients,” he said, adding that Congress will need to take a “multi-pronged” approach to address high prescription drug spending involving changes at the FDA, CMS, and possibly even to the tax code. Though Chairman Neal and Ranking Member Brady emphasized their commitment to working together “to take meaningful action to lower the cost of prescription drugs in the U.S. healthcare system," their respective parties don't fully agree on what actions to take. One area of disagreement is over whether Medicare should be allowed to negotiate drug prices in its Part B and Part D programs. While he does advocate for Part B and Part D reforms, Rep. Brady argued that the government should not negotiate drug prices.

Throughout the hearing, Republicans on the committee said the best way to lower out-of-pocket healthcare costs is to crack down on overpriced drugs, empower patients to choose the most affordable medicines that are right for them, and eliminate any incentives in Medicare that "reward bad actors and lead to higher prices."

Addressing the lack of transparency in the system was one cost-lowering strategy discussed during the hearing. Information on prices and alternative drugs are often either unavailable or unhelpful to patients.

One witness, Dr. Joseph Antos, an expert in healthcare and retirement policy with the American Enterprise Institute, told the committee, “People do not have the right kind of price transparency. We need to change some of the institutional arrangements, especially in the Medicare program, that have fostered this acceleration of list price and rebates." He added that patients often need help "by someone that they trust that has a medical background . . . who can guide them through that choice.”

Mark Miller, executive vice president of healthcare at Arnold Ventures, said that moving to a flat fee-per-prescription model for Medicare Part B could help to curb some spending. Both Mr. Miller and Rachel Sachs, associate professor of law at Washington University in St. Louis, indicated that the U.S. could save money on prescription drugs by tying its prices to an international reference list, as recently proposed by the Trump administration.

More information about the hearing, including the full list of witnesses and testimony, can be found on the W&M Committee website.

Educational Resources