While the high cost of prescription medications appears to be a universally agreed-upon trouble spot in the American health system, a home Ways and Means subcommittee hearing Thursday showed that Democrats and Republicans are still miles apart on what to complete about this.
The hearing, focused on using Medicare to inspire affordability, competition and use of medicines, marked the very first time since Democrats took charge of the home that this panel has dug right into a drug pricing issue. It is one of several hearings on the subject both in chambers of Congress this season.
Among the topics in play was legislation introduced in February by Rep. Lloyd Doggett (D-Texas), the subcommittee's chair, and Sen. Sherrod Brown (D-Ohio). It might allow Medicare to negotiate for lower drug prices by setting a cost for that drug based on a number of market-based factors, such as clinical effectiveness and price.
If a manufacturer of the brand-name drug doesn't comply, the government may approve a normal manufacturer to contend with it.
Ranking member Devin Nunes (R-Calif.) dismissed the proposal as “the seizure of medicines by an unhappy government.” This kind of approach, he explained, was “best left to socialist regimes and not america of the usa.”
“On what planet is this a free market?” asked Rep. Earl Blumenauer (D-Ore.) in regards to drug firms that are guaranteed years without competition once they patent a brand new drug or device.
Rep. Tom Reed (R-N.Y.) countered: “If there's no free market, then we're talking about government takeover from the pharmaceutical industry.”
“Poppycock,” Blumenauer responded.
The Doggett-Brown proposal is dependant on a concept referred to as compulsory licensing, which may permit the government to use its power to issue patents like a lever if manufacturers are seen as not operating in good faith.
This approach has some precedent in federal policy. Throughout a national anthrax scare in 2001, when doses of Cipro were needed to combat anthrax, the Department of Health and Human Services leveraged the threat of reissuing patents once the drug manufacturer wouldn't bring down the costs.
Nunes and other conservative Republicans in the hearing maintained this government market muscle would discourage research and growth and development of new medicines and coverings, echoing industry representatives who say the technique is not only costly but additionally doesn't always result in a breakthrough.
“The free market product is the tool that needs to be used to drive prices down,” Reed said. “That is how the solution lies, rather than taking over this space with a few kind of government fiat.” Douglas Holtz-Eakin, president from the conservative American Action Forum and one of the witnesses who testified at the hearing, agreed. “Stripping property rights isn't the solution,” he explained.
Witnesses pointed out several times the government is already intervening on the market by granting numerous long patents to drug companies and fronting the money for research and development through the National Institutes of Health.
“All of the new drugs that come towards the market possess some basis in government funding,” said Ameet Sarpatwari, the assistant director of the program on regulation, therapeutics and law at Harvard School of medicine and a panel witness. “There's a considerable amount of risk the government assumes.”
For some subcommittee Republicans, the sticking point clearly was that allowing Medicare to negotiate drug prices would lead to too much government intervention, and they stuck to that script. “I'm very cautious about increased government control,” said Rep. Tom Rice (R-S.C.). “The answer to high drug prices is to move towards more free market and less government control.”
The Ways and Means Committee isn't the only panel that can influence drug pricing; arguably it's one of the committees using the least power in this region. The hearing provided a platform to discuss a number of options.
Democrats advanced issues like limiting patents, increasing transparency, trade reform and examining a few of the regulations for pharmaceutical companies.
Rep. Judy Chu (D-Calif.) questioned the incentives for drug companies to put direct-to-consumer ads on television, which count as business tax deductions. The businesses also get regulations for donating to patient advocacy groups and donating portions of their inventory.
“It's pretty reliable advice the pharmaceutical market is doing very well, the steady trend of price increases is not developing a insufficient revenue,” Chu said. “In fact, there are high salaries, bonuses and many stock buybacks.”