Whereas the excessive price of prescribed drugs appears to be a universally agreed-upon bother spot within the American well being system, a Home Methods and Means subcommittee listening to Thursday confirmed that Democrats and Republicans are nonetheless miles aside on what to do about it.
The listening to, targeted on utilizing Medicare to encourage affordability, competitors and entry to medicines, marked the primary time since Democrats took management of the Home that this panel has dug right into a drug pricing situation. It’s one in all many hearings on the topic in each chambers of Congress this yr.
Among the many subjects in play was laws launched in February by Rep. Lloyd Doggett (D-Texas), the well being subcommittee’s chair, and Sen. Sherrod Brown (D-Ohio). It will enable Medicare to barter for decrease drug costs by setting a worth for the drug based mostly on a variety of market-based elements, akin to medical effectiveness and price.
If a producer of the brand-name drug doesn’t comply, the federal government could approve a generic producer to compete with it.
Rating member Devin Nunes (R-Calif.) dismissed the proposal as “the seizure of medicines by an sad authorities.” Such an method, he mentioned, was “finest left to socialist regimes and never the US of America.”
“On what planet is that this a free market?” requested Rep. Earl Blumenauer (D-Ore.) with reference to drug firms which can be assured years with out competitors once they patent a brand new drug or machine.
Rep. Tom Reed (R-N.Y.) countered: “If there’s no free market, then we’re speaking about authorities takeover of the pharmaceutical trade.”
“Poppycock,” Blumenauer responded.
The Doggett-Brown proposal is predicated on an idea referred to as obligatory licensing, which might enable the federal government to make use of its energy to situation patents as a lever if producers are seen as not working in good religion.
This method has some precedent in federal coverage. Throughout a nationwide anthrax scare in 2001, when doses of Cipro had been wanted to fight anthrax, the Division of Well being and Human Companies leveraged the specter of reissuing patents when the drug producer wouldn’t deliver down the costs.
Nunes and different conservative Republicans on the listening to maintained that this authorities market muscle would discourage analysis and growth of latest medicines and coverings, echoing trade representatives who say the technique isn’t solely expensive but in addition doesn’t at all times result in a breakthrough.
“The free market system is the software that ought to be used to drive costs down,” Reed mentioned. “That’s the place the answer lies, quite than taking on this house with some form of authorities fiat.” Douglas Holtz-Eakin, president of the conservative American Motion Discussion board and one of many witnesses who testified on the listening to, agreed. “Stripping property rights isn’t the answer,” he mentioned.
Witnesses identified a number of instances that the federal government is already intervening out there by granting quite a few lengthy patents to drug firms and fronting the cash for analysis and growth by means of the Nationwide Institutes of Well being.
“All the new medicine that come to the market have some foundation in authorities funding,” mentioned Ameet Sarpatwari, the assistant director of this system on regulation, therapeutics and regulation at Harvard Medical Faculty and a panel witness. “There’s a substantial quantity of danger the federal government assumes.”
For some subcommittee Republicans, the sticking level clearly was that permitting Medicare to barter drug costs would result in an excessive amount of authorities intervention, and so they caught to that script. “I’m very cautious of elevated authorities management,” mentioned Rep. Tom Rice (R-S.C.). “The reply to excessive drug costs is to maneuver in the direction of extra free market and fewer authorities management.”
The Methods and Means Committee isn’t the one panel that may affect drug pricing; arguably it’s one of many committees with the least energy on this space. But the listening to supplied a platform to debate a variety of choices.
Democrats superior points like limiting patents, rising transparency, commerce reform and inspecting a number of the tax breaks for pharmaceutical firms.
Rep. Judy Chu (D-Calif.) questioned the incentives for drug firms to place direct-to-consumer advertisements on tv, which depend as enterprise tax deductions. The businesses additionally get tax breaks for donating to affected person advocacy teams and donating parts of their stock.
“It’s fairly secure to say the pharmaceutical trade is doing fairly nicely, that the regular pattern of worth will increase isn’t creating a scarcity of income,” Chu mentioned. “In actual fact, there are excessive salaries, bonuses and lots of inventory buybacks.”
KHN correspondent Shefali Luthra contributed to this report.