Speeches & Floor Statements

Opening Statement: Alexander: 2nd Hearing Examines What Goes into Price Americans Pay When Picking Up Their Prescriptions

Posted on October 17, 2017

Today we are holding a hearing, the second in a series on prescription drug costs, in response to a bipartisan request led by Senators Cassidy and Franken, along with Senators Collins, Baldwin, Murkowski, Whitehouse, Capito, Sanders, Enzi and Warren.

Not only was the request for these hearings bipartisan, but both this hearing and the first hearing were bipartisan, which means Senator Murray and I agreed on the witnesses.  

Despite this, our first hearing in June went so far off track that I delayed this hearing because senators instead used that opportunity to talk about other issues, specifically the Affordable Care Act (ACA).

I acknowledge that there are deep feelings and differences of opinion on the ACA, but the Senate has been stuck in a partisan stalemate for seven years over what is a relatively small part of health care – the individual health insurance market where six percent of Americans purchase health insurance.  

Senator Murray and I have been working for several weeks to see if we can find a limited, bipartisan agreement to stabilize the individual market in the interim. 

There are many other issues that have caused health care spending in this country to grow from consuming 9 percent of the Gross Domestic Product in 1980 to nearly 18 percent in 2015, and a predicted 20 percent in 2025, according to the Centers for Medicare and Medicaid Services. 

We need to look at all aspects of health care spending – the 15 percent or so we spend on prescription drugs, including retail and prescription drugs administered in hospitals, and the other 85 percent of health care spending, which includes doctors’ visits, surgeries, and medical devices – and ways we can get those costs under control.

We are having a hearing on Thursday to discuss wellness and how healthy lifestyle changes could decrease serious illness and bring down health care costs.

So while senators are free to say and do what they want to, I would hope today we can focus on the cost of prescription drugs, while we have these excellent witnesses. 

Next month, the committee will hold a third hearing to hear from Norm Augustine and consider a report he is leading from the National Academy of Sciences. This report is the result of a study called “Ensuring Patient Access to Affordable Drug Therapies.”

We have a good example of bipartisan success in the Food and Drug Administration (FDA) User Fee Agreements. 

For 18 months, this committee worked with our counterparts in the House of Representatives to update and pass the user fee agreements. .

The user fees included provisions from many senators on both sides of the aisle, including measures that will provide additional staff and resources to FDA to approve more biosimilars and generic drugs, which provide more competition and lower drug costs. 

That bill became law this summer.

Last year, this committee worked together on the 21st Century Cures Act – bipartisan legislation to spur the development of new drugs and treatments.

My goal for these hearings is to continue in a bipartisan way, and learn the facts about what goes into the price patients pay when picking up their prescriptions and what, if any, steps this committee could agree on and take to lower that price.

Prescription Drug Costs

We are in the middle of a remarkable time in science that is producing amazing discoveries for patients who previously have had no hope. We have drugs that can cure Hepatitis C, keep cancer at bay, and stop a stroke. 

With this innovation comes new challenges in making sure all patients can benefit from these drugs. We have all heard from patients in our states that the costs of new prescription drugs are often too much for them to afford. 

We also need to make sure that any action we may take does not jeopardize this innovation so patients can continue to see breakthroughs in the research and development of new drugs. 

The prescription drug delivery system – how a drug gets from the manufacturer to the patient --  is complicated. More than 4.4 billion prescriptions are written for drugs each year for Americans who then pick up those drugs at 60,000 drug stores, or receive them from doctors or hospitals, and from online pharmacies.

And those 4.4 billion prescriptions, estimated to cost $450 billion, are paid for in a similarly complicated way.

In addition to private insurance, many different government programs subsidize or pay for prescription drugs, including Medicaid, 340B, Medicare Part B and Part D, Tricare, VA, and Indian Health Service.

Patients often pay a set amount, called a co-pay, or a percentage, called coinsurance, when picking up their prescription as well. Or, sometimes patients have to cover the whole cost if they have not met their deductible. What amount of the cost of the prescription drug they pay is determined by what health insurance they may have.

I hope our witnesses here today will help us understand the drug delivery system and how their role in the system affects the price patients pay.

Our witnesses represent: 

The brand manufacturers, who take enormous risk and expense to develop drugs for diseases.

Generic drug manufacturers, who over the last 30 years have grown to make 89 percent of all prescriptions, make quality drugs at a lower cost for patients. 

Drug wholesalers, who purchase drugs from manufacturers and deliver them all over the country daily to ensure patients can pick up their medicines closer to home. 

Pharmacy Benefit Managers, who use their buying power to leverage lower prices on all drugs but also have to make difficult decisions about drugs to offer to patients at what cost and with what co-pays or co-insurance. Lastly, pharmacists, who are on the front lines of helping patients that find out the cost of their medicine when picking it up at the drug store and have to make that fit with their budget. 

As we look at and hope to address the fundamental costs of health care, I hope we can do so in a bipartisan way.