Speeches & Floor Statements

Hearing Statement: President’s Blueprint ‘American Patients First’ to Lower Drug Prices

Posted on June 12, 2018

On May 11, President Trump announced a comprehensive blueprint to reduce the cost Americans pay for their prescription drugs.

And today we are pleased to hear from Health and Human Services Secretary Azar to help us understand that blueprint and what the Administration plans to do to implement it and what legislation might be necessary.

Hearing Secretary Perdue talk about farm issues is helpful because of his background as a family farmer and veterinarian. And most of us think that Dr. Scott Gottlieb’s background in business and service in the Bush Administration has made him a more effective head of the Food and Drug Administration.

So, I think it is helpful that Secretary Azar also knows these issues well – he was Deputy Secretary and General Counsel at HHS under the Bush Administration – and he was an executive with significant responsibility at a pharmaceutical company.

One of the things we have learned during our first three hearings on drug prices is that the amount we spend on prescription drugs can vary widely from year to year – sometimes the amount we spend on drugs grows by as little as 1.3 percent, as in 2016, and other years by as much as 12.4 percent, as in 2014, according to the Centers for Medicare and Medicaid Services.

But we also know that, according to CMS, spending on prescription drugs is expected to grow an average of 6.3 percent a year between 2017 and 2026 – faster than hospital stays, doctors’ visits, or any other health care sector.

At our hearings we have also learned that it is very difficult to track the billions of dollars that Americans spend each year on prescription drugs, which in 2015 was $457 billion, according to Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services.

We learned that one of the reasons tracking where the money goes is difficult is the use of rebates to reduce list prices – which is when a pharmacy benefit manager negotiates a discount on a drug with the manufacturer.

We also learned that while the $457 billion we spent on drugs in 2015 is a big dollar amount, drug spending is only about 16.7 percent of what we spend on health care in America, which is according to the Assistant Secretary for Planning and Evaluation and includes not only drugs purchased at the pharmacy but also drugs given in hospital settings.

The Administration is taking action for the same reason we held our hearings: we all know many Americans struggle to afford their prescriptions.

According to the Kaiser Family Foundation, about half of Americans – that’s about 163 million people – take a prescription drug.

And about one in eight Americans say it is difficult to afford those prescriptions.

But, when we talk about the cost of prescription drugs, we have to keep in mind that we are living in a time of remarkable biomedical research that is leading to new and lifesaving drugs.

These miracle drugs may take billions of dollars and years to develop and so they may be very expensive. 

For example, we now have drugs that can cure Hepatitis C. These are expensive drugs up front, but curing a patient with a one-time treatment can be significantly less expensive than treating someone with Hepatitis C over the course of their life.

In addition to our three hearings, this committee has taken some steps to reduce drug prices:

In the 21st Century Cures Act, we included provisions to cut the red tape at the Food and Drug Administration to increase competition as a way to bring down drug prices.

And in the FDA user fee agreements that this 0committee worked on and the president signed into law last August, was a provision from Senators Collins, McCaskill, and Cotton to improve generic drug competition.

And in the blueprint, there are some steps the Administration has started to take or are intending to take:

For example, FDA is going to start going after bad actors gaming the system to delay generics from going to market.

This is also a place where Secretary Azar can use the bully pulpit to enact change.

Dr. Gottlieb has already released a list of companies blocking access to their drugs and delaying generics coming to market, shining light on the questionable behavior of these companies.

Another action FDA is considering is requiring drug manufacturers to include the list price of a drug in television commercials or other advertising materials.

The blueprint also proposes ending the so-called ‘gag-rule’ that prevents a pharmacist from telling a patient a drug would be cheaper if they paid out of pocket instead of with their insurance.

The Administration has proposed ending this rule on federal plans such as Medicare Part D plans, and Senators Collins, Cassidy, Smith and others have a bill to end the rule on all insurance plans that this committee hopes to consider later this year as well.

I also would like to hear how Congress can help.

At our previous hearings, I questioned the need for rebates, because they make it difficult to track where the money goes, and I understand that the Administration may need some additional authorities to modify or end the use of rebates to increase transparency.

These are a few of the proposals in the blueprint I am excited about, and I look forward to hearing from Secretary Azar about others.

 

###