While the excessive value of prescription drug costs appears to be a universally agreed-upon bother spot within the American well being system, a House Ways 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 House that this panel has dug right into a drug pricing concern. It is one among many hearings on the subject in each chambers of Congress this yr.
Among the matters 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 would enable Medicare to barter for decrease drug costs by setting a value for the drug primarily based on quite a lot of market-based components, equivalent to medical effectiveness and price.
If a producer of the brand-name drug doesn’t comply, the federal government might approve a generic producer to compete with it.
Ranking member Devin Nunes (R-Calif.) dismissed the proposal as “the seizure of medicines by an unhappy government.” Such an strategy, he mentioned, was “best left to socialist regimes and not the United States of America.”
“On what planet is this a free market?” requested Rep. Earl Blumenauer (D-Ore.) with regard to drug firms which can be assured years with out competitors after they patent a brand new drug or machine.
Rep. Tom Reed (R-N.Y.) countered: “If there’s no free market, then we’re talking about government takeover of the pharmaceutical industry.”
“Poppycock,” Blumenauer responded.
The Doggett-Brown proposal is predicated on an idea referred to as compulsory licensing, which might enable the federal government to make use of its energy to concern patents as a lever if producers are seen as not working in good religion.
This strategy has some precedent in federal coverage. During a nationwide anthrax scare in 2001 when doses of Cipro have been wanted to fight anthrax, the Department of Health and Human Services leveraged the threat 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 improvement of latest medicines and coverings, echoing business representatives who say the technique isn’t solely pricey but additionally doesn’t all the time result in a breakthrough.
“The free market system is the tool that should be used to drive prices down,” Reed mentioned. “That is where the solution lies, rather than taking over this space with some kind of government fiat.” Douglas Holtz-Eakin, president of the conservative American Action Forum and one of many witnesses who testified on the listening to, agreed. “Stripping property rights isn’t the solution,” he mentioned.
Witnesses identified a number of instances that the federal government is already intervening available in the market by granting quite a few lengthy patents to drug firms and fronting the cash for analysis and improvement by means of the National Institutes of Health.
“All of the new drugs that come to the market have some basis in government funding,” mentioned Ameet Sarpatwari, the assistant director of this system on regulation, therapeutics and legislation at Harvard Medical School and a panel witness. “There’s a considerable amount of risk the 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, they usually caught to that script. “I’m very wary of increased government control,” mentioned 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 one panel that may affect drug pricing; arguably it’s one of many committees with the least energy on this space. Yet the listening to offered a platform to debate quite a lot of choices.
Democrats superior points like limiting patents, rising transparency, commerce reform and inspecting a few 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 rely as enterprise tax deductions. The firms additionally get tax breaks for donating to affected person advocacy teams and donating parts of their stock.
“It’s pretty safe to say the pharmaceutical industry is doing quite well that the steady trend of price increases is not creating a lack of revenue,” Chu mentioned. “In fact, there are high salaries, bonuses and many stock buybacks.”
KHN correspondent Shefali Luthra contributed to this report.