Transcripts For CSPAN3 House Energy Commerce Subcommittee Hearing On Prescription Drug Prices 20240714

Congress. Former special Counsel Robert Mueller is set to appear before two committees of congress. The House Judiciary Committee and the House Intelligence Committee on wednesday, july 17th, at 9 00 a. M. Eastern. Hell testify in open session about his report into russian interference in the 2016 election. Watch live coverage on cspan3 j online at cspan. Org or listen with the free cspan radio app. The house energy and Commerce Sub Committee on health heard from officials from two pharmaceutical trade associations. They testified alongside other policy experts. Good morning, everyone. The Sub Committee on health will now come to order. The chair now recognizes for five minutes for an opening statement. Last week our Sub Committee held a hearing to essentially follow the money in the drug supply chain. We came away with much valuable information, but we also found there are many secrets. Secret decisions about how drugs are priced. Secret deals between Drug Companies and the pbms and secret agreements between pbms and insurers. Today were considering seven bipartisan bills that essentially unmask the secrets, that secret process, and ensure that low income seniors can afford their medications and build on the drug pricing package passed by the house last week. The first and very important bill ensures that seniors can afford their drugs. Representatives cunningham and bill araukus introduced a Prescription Drugs act that eliminates cost sharing for generic drugs for low income medicare enrolled people and caps their out of pocket costs for other drugs. Nearly 25 of seniors who take drugs report its difficult for them to afford their medications. This bill will not only save seniors money. It will also help save their lives in many instances. The second group of bills exposed how drug prices are set. The spike act and the fair drug pricing act require drug manufacturers to justify large spikes in drug prices. The reporting accurate drug prices act proposed by representatives dog it and buchanan require manufacturers who report the average sales price of Medicare Part b, b as in bo boy drugs. This bill makes sure medicare is paying the right price for part b drugs. All kinds of partners in this. They direct companies to report the price in quantity of the free samples of drugs, devices, and medical supplies they give to Health Care Providers. The bill does not prohibit free samples. Instead, it will help us to see how free samples influence drug pricing and distribution. The third group of bills exposes the deals between pbms and the other stake holders in the drug supply chain. The Public Disclosure act of drug discounts act offered by representative spanberger and holding requires a report of discounts they negotiate with drug manufacturers. This transparency will help to ensure the discount is passed down through the chain to patients. To patients. And i want to underscore that. The prescription pricing for the people act authored by representatives nadler and collins directs the fdc to review pbm eas behavior and whether it is anticompetitive or not. At our hearing we learned three pbms control the majority of the market, and those own large pharmacy chains and specialty pharmacies. And we believe that has potential conflicts of interest. With this bill the fdc will krut news pbms to ensure there are not any distortions of the market. Last week i said we needed to examine the system from beginning to end because in order to fix it, we not only have to we have to understand all the parts of it first and then act. With these seven bills today, i think were taking important action. Each bill is directed to reform the drug supply chain and transparency is only as good as the accountability and enforcement that has to follow. So i want to welcome our witnesses. Thank them for being here today with us. We look forward to your important testimony. And the chair now recognizes the Ranking Member of the Sub Committee on health dr. Bunch us for five minutes for his opening statement. I thank the chairman for the recognition. We have convened this morning to address an issue that affects and complicates the lives of many of our constituents. When i return home to north texas and conduct meetings in my District Office i hear the personal stories of individuals and families who are struggling to afford their medications. Unfortunately, solving this problem is not as straightforward as you might hope. As kpexemplified by our recent drug supply chain hearing. There are a number of stake holders interwoven throughout the supply chain making up the existing convoluted system. Our counterparts on the ways and Means Committee have taken a first pass at addressing transparency in hr 2113, the star act. On its face, transparency sounds like a useful and good thing. In other markets in the United States, people can shop around for goods and seek the best price or value. In health care thats more easily said than done because of the nature of the system, especially the drug supply chain. It is especially important that as we evaluate this legislation, we consider the possibility of unintended consequences for both the patient and for the market. This committee laid the groundwork and 21st century cures for the development and treatments and cures that really until the passage of that bill, those some of those things were Science Fiction and now theyre becoming reality. Two and a half years after cures was signed into law, im receiving meeting requests from stake holders who bring good news about how this law is producing real results for patients. We must strike this delicate balance with the policies we pass through this committee to ensure that they do not dampen the success or deter future investment in Bio Medical Research and innovation. No surprise. I do have some thoughts about section 2 of hr2113 which requires a notification and public posting of companies that launch a drug at a price of 26,000 or more. There are some newer therapies. These may be a single dose or a single shot that can cure an individual of a rare disease. The cost of research and development and Clinical Trials that goes into these treatments is immense. We must consider the potential impact that this requirement could have on the industry. The incentives for Drug Development in this space are working. But scaring companies away from investing in such drugs does not serve patients who might benefit from this innovation. Im reminded you can contribute a lot of things to capitalism and capital, but its not necessarily courageous. So if we make it difficult, capital will go elsewhere, and yet, we want the innovations in this space. So the fair act does not include the launch price trigger. I think thats a good place to start. I would also like to take a minute and express some concerns about Section Three about 2113. This policy would require manufacturers of drugs, devices, biologics and medical supplies to report on the samples they give to Health Care Providers each year, and this information would be publicly posted. I fear this policy could lead to a sort of public shaming of companies that are trying to benefit patients. Should such a policy deter manufacturers from providing samples to physicians, i promise you patients will be harmed. As a physician, i can say that ive seen the benefits of samples for patients firsthand. Sometimes the patients insurer requires a prior authorization process. A sample of the medication allows the patient to begin receiving timely treatment. Additionally physicians may use samples in clinical Decision Making. For example, if a new drug has come to market that may work better for a patient, the doctor can use the sample to establish whether or not the patient responds in an improved way to the new drug without subjecting the patient to financial burden or side effects developed by an unnecessary purchase. I appreciate the work the ways and Means Committee has done. We are the energy and commerce committee. We should be in the lead and i believe there are some areas in this policy we need to think through more. I want to thank our witnesses in advance for their thoughts on this legislation and i look forward to working in a bipartisan fashion. I yield back my name. The gentleman yields back, and thank him for his opening statement. I now would like to recognize the gentleman from South Carolina who is going to offer the chairman of the full committees opening statement. Thank you. Let me correct the record. Im from North Carolina. Im sorry. I know you californians, whenever you heard the word carolina, you think of the south. We have north and south in california too. I should have been im sorry for not being accurate. Thank you for your friendship. Great state. The great state of. Right. Thank you for holding this latest hearing in our series on Prescription Drug pricing. I say latest hearing because this is not the first and certainly will not be the last. Democrats are serious about the problem of rising drug prices. It is a complicated problem. I acknowledge that. Its consequences are very far reaching. I represent the First District of North Carolina where many hard working families are struggling every day to afford the basic necessities of life. Steep price hikes have the potential to force these communities have decisions between paying their bills and purchasing medications that are vital to their health. All too often these circumstances result in rationing Prescription Drugs or the abandonment of treatment altogeth altogether. I have longheld that quality and Affordable Health care is a basic necessity. A right that every american must have equal access. Consumers should be able to anticipate the price of their prescriptions, and must be able to rely on those prices to remain stable from year to year. All of us understand that corporations exist to make a profit. Ive acknowledged that in many hears and i understand that dynamic. Pharmaceutical investment have led to unprecedented breakthroughs and treatment that have improved outcomes and patient quality of life. Unlike most Consumer Products for many, a prescription is the literal difference between life and death. Therefore, the need to Fund New Innovations must be balanced. It must be balanced with the obligation to make medications widely available and affordable to the public. We find ourselves here today hopefully in a bipartisan way in pursuit of that goal as Congress Continues to work with every entity among the pharmaceutical supply chain to find Practical Solutions that support innovation and reduce costs for consumers. I look forward to todays discussion. I thank those who have authored these amendments and in particular, i thank the question lady from illinois for her passion and her leadership on this issue. I yield at this time to the gentle lady from illinois. I thank the gentleman for yielding. I thank the chairwoman of the Sub Committee for allowing me to wave onto this hearing on a tonic to important to all of us. The pharmaceutical industry is worth almost 1 trillion. I believe theyre Holding American consumers hostage. Our constituents are suffering and some are dying. We have the names of the dead, some of them. Because they cant afford lifesaving and lifeenhancing drugs they need. And why have drug prices skyrocketed . Sometimes 1,000 percent . Well, thats a really good question. And because Drug Companies have hidden the price policies, consumers have no choice but to pay the price if they can until now. My legislation the fair drug pricing act, hr2296 is a bipartisan, bicameral bill that will force the Drug Companies to be transparent which is the very least that we can expect from them. The bill does two things. Pharmaceutical manufacturers must notify hhs and submit a transparency and justification report 30 days before they raise the price of certain drugs by more than 10 or by more than 25 over three years. The report will require manufacturers to provide the manufacturing, research and Development Costs for the drug. Net profits attributed to the drug. Marketing and advertising, spending on drugs and others. Unlike hr2069, the spike act also being considered today. My bill does not allow manufacturers who pick and choose what information they would like to disclose, and unlike the spike act, my bill requires hhs to make all of the nonproprietary information from those reports public and available to everyone online for everyone to see. For the First Time Ever this bill will offer taxpayers nationwide notice of price increases and bring basic transparency to the market for Prescription Drugs. The bill being considered today are only a start. And transparency is only a piece of the puzzle in bringing down the cost of Prescription Drugs. These bills are all bipartisan, and im proud that representative rooney joined me in reintroducing this. Senator baldwin, and senator ron and the senate are also doing this bill. I hope well have positive consideration of it, and let me also enter into the record a very important letter from the National Multiple Sclerosis society representing people who are having trouble paying for the spiked prices in their drugs, and i yield back. The gentlewoman yields back. Now i would like to recognize the Ranking Member of the full committee, and offer my condolences to him on your trail blazers. They did play well. Really . But not good enough. This is how were going to start . Yeah. Boy, and i was going to say nice things about you this morning. It was tough in overtime last night. It was. And it was close. It was a great game. Close counts in horseshoes, not basketball, but we appreciate that, mad m chair. Thank you for that reminder this morning. Now lets get on about serious business. Patients need our help. What goods and prescriptions if a patient cannot afford to pay for their medicine . Drug pricing is of great concern to all americanss and our president. Its come up at nearly every one of the 20 town halls ive done in my district. Often prices continue to rise and while there are reasons given, patients rely on the medications. When Market Forces weaken or fail, we need to step in with common sense legislation. Weve taken steps recently passing a requirement that Companies Pay the proper rebait and passed the orange and purple book reforms on the floor. While i am dismayed, we did Reach Agreement here through bipartisan negotiations on several other provisions that will increase the availability of generic drugs. This Sub Committee is also built off the Foundation Last congress by examining how the Medicare Program pays for drugs and pealing back the layers of pharmaceutical price and supply chain. I thank the chair for her leadership in that regard. Im glad were examining legislation. I hope we can find bipartisan agreement on, but we must also ensure in the efforts we are pursuing policies that provide a benefit for patients. Weve got to put the patient first. We need to ensure as we work to shine a light on how drugs come to market and our price, that we realize the market must also be sustainable to produce the next generation of cures and treatments. Were living in an amazing time of innovation. Its producing cures for conditions we didnt even have a name for 30 years ago. The promise of what lies ahead is staggering in their ability to relieve human suffering from conditions. Were on the cutting edge of solving all of those. In our efforts to bring more transparency to the system, which i support, we must inherently first do no harm. For example, im concerned that provisions of some of the bills before us could allow manufacturers to back in the rebates paid. This committee has been a leader in encouraging the innovation of patients are benefitting from today through our work on the fda user fees and from the work to pass the 21st century cures led by my friend and colleague fred upton. We know that the cost of bringing a drug to market especially one that targets an orphan or neglected disease is high. We cannot ignore that. We should not randomly categorize as bad actors who has ib vested in cutting edge therapies because their list prices is over an arbitrary amount. I can tell you the new drugs, improve or save lives and thats better than investing in another metoo dr me to drug. We must put the patient front and center. Im concerned about some of the policies that could have the risk of decreasing the ability of physicians to give samples of drugs. Those who have prior authorization or coverage issues from starting treatment to informed medical judgment or help patients manage side effects. I think working in a bipartisan spirit, im hopeful we can address the concerns, and on a final note, thanks to the chairmen for arranging the jurisdiction on the bills. Thats important. While most have been marked up by other committees, we are, after all, the committee of primary jurisdiction. With that, thank you for your hearing and condolences on the blazers, and ill yield back the balance of my time. I thank the gentleman. He yields back. The chair would like to remind all members written Opening Statements shall be made part of the record. I now would like to introduce our witnesses that have willingfully come forward today. We appreciate each one of you being here. We have the seen yore Vice President insurance and state issues for the foorm suit cal research and manufacturers of america and her son garrett is here with us too. I hope you find this interesting, garrett. If nothing else, youll know the complicated business your mother is in. Kristin bass with the pharmaceutical Care Management association. Welcome to you. Dr. Madeline feldman, the president of the coalition of state rheumatology organizations, the alliance of specialty medicine. Thank you to you. Mr. Frederick isasi, executive of families usa. Welcome to you. Dr. Mark miller, the executive Vice President of health care, arnold ventures. Welcome to you, sir. And dr. Douglas hotel, eagan. President of the American Action forum. Thank you to each of you for joining us today. At this time the chair will recognize each witness for five minutes so the light that means the most is the red light. That means when youre driving, you stop. And id like to and i think several of you have already testified, so you know what the system is. So now i would like to call on miss joldersma. Youre recognized for five minutes. We thank you for being here with us today. You may begin. Okay. Thank you very much and good morning distinguished members of the Sub Committee and thank you, chairman and Ranking Members for the invitation to testify today. I am Lisa Joldersma and a senior Vice President at the pharmaceutical research and manufacturers of america or pharma. As many of you know, pharma represents the leading researchbased bio pharmaceutical companies. Since the year 2000 or companies have collectively invested half a trillion dollars in the search for new treatments and cures including more than 70 billion in 2017 which i would note is an amount twice the entire operating budget of the nih. These investments yield breakthroughs and continue use progress against both kroing and acute conditions. Creating, discovering and developing a new therapy is a challenging highrisk endeavor with just 12 of those molecules that enter a Clinical Trial ultimately securing fda approval. In other words, of those molecules entering the Clinical Trial phase, nine times out of ten we fail, and t not for lack of trying. The average cost to develop a new medicine is 2. 6 billion, and the entire process takes an average of 10 to 15 years from start through fda approval. Despite these difficult odds and increasingly challenging science, pharma members persist, supported by private investment, and in collaboration with others including the nih. While medicines importance to health care has grown considerably over the years, the share of u. S. Health care spending attributed to drugs has been largely stable. Prescription drugs consume roughly 14 of National Health expenditures today. That includes both drugs dispensed at retail and administered in the hospital, and these are cms numbers from the National Health expenditures data. Growing reliance on Generic Medicines which currently represent 90 of all prescriptions filled in this country is a key element to keeping our Prescription Drug system affordable overall. And i would note that growth and bio similars thanks to the leadership of many on this committee is expected to further help constrain costs moving forward. And yet, patients are really, really struggling to afford their medicines. And i want to be really clear today that for our part, pharma accepts that a Products List price does influence what patients pay. In todays world of multitiered formulas, drug exclusion lists and rising cost share, however, there are other entities that play a significant role in what patients pay as well. Pharma is focussed on changing the status quo, and bringing Forward Solutions that will sustain innovation, ensure safety and help patients. For too many patients today even those with insurance they are struggling to afford their medicines as you all know well. This is the most pressing issue that we need to work collectively to solve. With regard to specific measures before the subcommittee today i will say that pharma supports Greater Transparency across the health care system. We believe our industry already makes a fair amount of information publicly available, but we do understand that policymakers and purchasers are looking for more from us. We will come to the table to help shape meaningful transparency across the drug supply chain. When evaluating alternative proposals we really have three questions in mind that help shape specific feedback that we provide. First is a measure likely to yield information that may be helpful or meaningful to patients. Always patients first. Second, does the manager give companies a reasonable opportunity to comply . Is it prospective in nature and finally, are there appropriate protections for confidential and proprietary information so we can prevent harmful interference in the market . In closing, i would like to say that we do believe Greater Transparency is an important part of the solution to the problems we are discussing today, but they will not be enough on their own. We also need to take steps to promote competition to address misaligned incentives in our Current System and to explore ways to make insurance work better for sick patients who need todays medicines and those who are waiting for tomorrows. Thank you very much. We thank you, miss holdersma, and now i would like to recognize miss christian bass for five minutes of her testimony. Welcome again and thank you. Thank you, chairwoman, Ranking Member burgees and members of the subcommittee. I am kristen bass, chief policy and external Affairs Officer for pcma, which is the trade association for the pbm industry. I am pleased to be here today to talk about the important transparency bills before the subcommittee and to discuss how pbms lower Prescription Drug cost for 2 hun million americans with Health Coverage through employers, labor union, health plan, medicare and medicaid. Every day in this country people go to the pharmacy to get needed drugs to make their lives better. Pbms only mission is to increase affordability and access to those drugs for consumers and our clients. Pbms are an important link in a chain that includes manufacturers, wholesalers, physicians, pharmacies and pharmaceutical Service Administrative organizations all working to get needed therapies to patients. Within that chain, our companies are the only ones Whose Mission is to help control costs. Pbms can only help lower Prescription Drug costs for patients when there is sufficient Competition Among Drug Companies where there are competing clinically equivalent brand drugs that will work equally well for patients, pbms negotiate rebates or discounts off the manufacturers list price to arrive at the lowest net cost drug. The rebates are then used by sponsors to reduce patient premiums and out of pocket costs or both. We are proud that our industry has delivered results. According to federal data, in 2018 overall u. S. Spending on drugs increased only 3. 3 and in 2017, 4 . One large pbm reported a decline in costs for its clients in 2017. That is our industrys mission. Yet, we know that today too many individuals still find their drugs unaffordable. Driving more Competition Among Drug Companies is the key to providing relief for patients. I want to commend the subcommittee for their work on the creates act and legislation limited on delay agreements. Greater transparency can also be a part of the solution and the pbm industry is supportive. We support transparence toe empower patients and their physicians. Our industry provides realtime benefits tool so physicians and patients know immediately in the Doctors Office what drugs are on formulary and what the patients cost sharing will be. Pbms are transparent to our clients including how the pbm has made for its services and the negotiated rebates and we support transparency to policymakers. Pbms already report on concession, costs and fees to medicare and cms and we support legislation that would provide that data to congressional advisers at med a pack and medpac and thats just for our industry. We would support others for in the supply chain and wholesalers and the psaos and this gets us to the bills under consideration today. With respect to hr2115 we support aggregate reporting of rebates. We urge the subcommittee to make sure manufacturers cannot use public reports to calculate competitors discounts and avoid competition and thus keep drug costs high, a risk that has been validated by the ftc. We want to empower patients, not Drug Companies. We have ideas on how to minimize transparency without premiums and cost sharing and are happy to work with subcommittee staff on those. With respect to hr 2376 and its provisions to direct ftc to krut niesz o scrutinize industry practices we welcome and support this review. While the ftc has previously examined pbms extensively and concluded that we operate in a competitive market to the benefit of consumers and our client, we are confident that additional ftc study of our industry will further validate previous conclusions. We strongly encourage the subcommittee to expand ftcs review to all others in the Prescription Drug supply chain to ensure a complete and transparent picture to all those who play a role. In addition, increased manufacturing reporting can help bring sunshine into the pricing and other maing practices as addressed in the bills that are the subject of todays hearing. Ill conclude by commending the subcommittee by considering ways to reduce Prescription Drug costs. We appreciate the opportunity to testify and i look forward to answering your questions. Thank you, miss bass. I now would like to recognize dr. Feldman. You have five minutes for your testimony and thank you for being here with us. You can proceed. Chairman eschew, a nonpartisan coldition of medical societies representing 100,000 specialty physicians. My name is madeleine feldman, with the rheaume tol gee organization and i practice full time in new orleans. I treat a variety of diseases and the one i see most on often is Rheumatoid Arthritis or ra. We used to be only to provide symptomatic relief, but now there are therapies that help us halt the disease activity, stop joint destruction and even reduce the cardiovascular risks associated with Rheumatoid Arthritis. Lower priced generics are always used first before the Specialty Drugs. Now the list prices of these Specialty Drugs have risen to the point where many patients can no longer afford even their coinsurance based on the list price. I hope youll find it helpful to hear my feedback as a practicing physician. I would like to first talk about the samples provision in the Prescription Drug star act. Section 3 would broaden the scope of the sunshine act to approve the total quantity of the samples and manufacturers reporting. We are reporting that this provision might have serious unintended consequences for patient care. Let me tell you how we use these samples in rheaume tumatology a fact it costs us resources in staffing and managing this very complex inventory. Because patients can wait weeks to over a month before getting final approval and then actually getting the prescribed medicine, its extremely important to have on hand these samples to start the patients right away. It can make the difference between saving a joint or not. We are also able to see if the drug causes any tolerablity issues and all of this at no cost to the patient or the payer. In its june 2017 report medpac recommended reporting on samples to oversight agency, researchers, payers and health plans under confidential data use agreement. They did not recommend publishing it publicly online. I fear that broadening medpacs recommendation to public, online publishing will have a Chilling Effect on manufacturers willingness to provide us with these samples because of the potential of false shame campaigns on twitter and the like. This can be harmful to the doctorpatient relationship and undermines patients trust in their physicians and i can tell you sometimes that trust is more important than the medication itself. We urge congress to more closely follow medpacs recommendations to accomplish the important goal was hr2115 without the bills unintended consequences. Next, i would like to briefly discuss section 5. The current rebate system creates perverse incentives to increase list prices that everyone in the Drug Delivery system profits on except for the patients. I would be happy to explain why competition increases prices as opposed to decreasing them. Ive seen where some drugs with prices are not allowed to be on the preferred formulary. All price concessions to pbms would shed light and why they can change every six to 12 months and stop payment for drugs that have stabilized my patients. Less egregious from that behavior is something that happened that one of my patients, it took us two years to find the right drugs for his Rheumatoid Arthritis. He was sent a notification from pbm asking him to switch to a completely different Specialty Drug and one that had a completely different mechanism of action like asking a cancer patient in the middle of a successful treatment to change their drug. In order to help us fully understand the financial considerations that are overriding the clinical one, we support transparency not only for the formulary rebate, but all of the price concession, admin fees and price protection fees and even if disclosures are only to regulatory agencies. I have provided comments on two additional policies and would be happy to answer any questions on those. The alliance for specialty medicine is truly encouraged by Congress Bipartisan attention to drug pricing, while we believe some policies under consideration may need changes to avoid unintended consequences in the drug supply chain. Thank you very much for your consideration of our viewpoints. Thank you, dr. Feldman. I now would like it recognize mr. Frederick isasi. Welcome and thank you. Thank you. Members on the subcommittee health, thank you for the opportunity today. I am Frederick Isasi from American Families usa. We have served as the leading National Voices on the d. C. And state level. We are here because American People are hurting. Families across this nation are being put in terrible positions, choosing between Prescription Drugs for themselves and their children and their financial security. The problem is growing worse every year and what is most important to say is that this problem was created by congress and our federal patent and laws and only congress can solve it. Our families need it to act and its a step in the right direction and we need much bolder action as well. Let me give you a look at what the suffering looks like. Approximately one in three family, 80 Million People have not taken Prescription Drugs as prescribed because they simply cannot afford them. Some skip a dose, cut their pills in half and others simply get sicker. We are one of the wealthiest nations in the world and spending two or three times more than other wealthy nations on healthcare and yet this is the life to which we subject our nations families. What does it look like to be a family struggling with drug costs . Let me tell you from katherine from wheeling, illinois. She worked hard. She had a career as a secretary and then in her late 50s she developed a cough and it wasnt going away. How many of us have had similar problems . But then within three months of going to the doctor for the cough she was told she had a rare lung disorder and that without a Lung Transplant she would arent live to see the end of the year. Her condition worsened and her doctors prepared her to die and katherine herself prepared to die. Then she got the call, a new lung had been found. She was going to live. This happened five years ago, this incredible gift and a new chance at life. Unfortunately, her experience turned into Something Else. Katherine takes 367 pills a day, including antirejection medication and she has to ration them it make them last. She spends an astounding 1,000 a month on her medication that is half of her income. Katherine after living after the experience of almost dying, receiving a Lung Transplant, fighting for her life is spending half of her income to spend on medications. Katherine sold her home, she moved in her with parents. Her mom is 86 and her dad just passed away at 89. She lives an extremely frugal life and as drug costs escalate every year she is closer and closer to financial ruin and deep poverty. At the end of each year she finds herself thousands of dollars short and lives with the anxiety how she will find the money to pay for the drugs keeping her alive. That is the life that catherine lives with so much grace and courage as do other americans. As katherine struggles each day they enjoy some of the highest margins in the nation making billions upon billions of dollars and the reason the profits are so astronomically high is not that they are inventing the boaest drugs for r families and its because congress, all of you continue to grant them the ability to charge whatever they possibly can get. They abuse federal laws to charge higher prices because of Congress Inaction and despite the astounding amounts of money they are making, you will hear industry say that if government acts to stop these abuses, innovation will dry up. It is not true. Did not do not be fooled. So much is being spent on socalled innovation right now. Of the trillion dollar, a trillion dollars in worldwide revenue are they spending threequarters on innovation . No. Are they spending half . No. Are they spending at least a third . No. Are they spending a fourth . No. Industry is spending less than a fourth of their revenue innovation and much more on marketing and on profit and all of the innovation is on the backs of taxpayers who funded the underlying research. Instead of innovating and Drug Development they innovate in illegal strategies to extend exclusivity. In fact, more than threequarters of new patents are for existing drugs. Think about that. From cluttered with money, where is the innovation . I am pleased to say that families usa supports all of the bills under consideration. We believe that Price Transparency can affect families and industry makers better understand how prices are set, however these bills alone will not meaningfully affect the price of drugs, we support the bill aimed at bringing down price. In the midterms a few months ago the American People sent a strong signal to capitol hill. An astounding 82 of republicans and 90 of democrats said taking action to lower Prescription Drug prices should be a top priority for this congress. Now is the time for congress to act boldly, on behalf of their constituent, thank you for this opportunity to testify. Thank you, mr. Isasi. I now would like to recognize dr. Mark miller for five minutes of his testimony, and thank you for being here. Chairman eschew, and distinguished members of the committee. Arnold ventures is a philanthropy dedicated to reforming dysfunctional markets and programs to assure a better return on investment. We work to develop evidence and ideas to improve public policy. We believe strongly in markets and we also believe in evidencebased intervention when markets fail. With respect to drugs, our objective is to protect innovation, but to explicitly lower the cost for the employer, the taxpayer and most importantly the patient. We believe there are strong reasons for the congress to act. We spent 470 billion on drugs in 2016 and that number is expected to grow 24 by 2020. Medicare part d we spent 100 billion after rebates and the number is projected to double in the next ten years and Medicare Part b we spent 30 billion, that numbers doubled since 2010. In medicaid we spent their 30 billion and that number has increased 50 since 2011. Meanwhile, at the federal level and this is deficit financed and three in ten americans cant afford their prescriptions and 40 of families cant produce 400 in an emergency. To that end we urge the congress to act comprehensively on the drug issue. Number one, to curb patent abuses and other anticompetitive behaviors so when the drug is available as a competitor it can get to market. Number two, remove market distortions through Greater Transparency and enforce price inflationary actions such as the misuse of rebates and coupons. Directly address high launch prices and price increase for those drugs that do not have competitors through such actions as reference pricing negotiation or inflation rebates. More precisely with respect to Medicare Part d, consistent with med pac recommendations the committee should consider a series of reform to increase pressure on the pbms to more aggressively negotiate the lower priced drugs, for example, for the pbms and the ever iners to pick up the catastrophic cost. Concurrently that policy should offer greater protections to the beneficiary when they hit the catastrophic cap. Those proformed also include modifications for the copayment for the lis and the lowincome subsidy population in order to encourage them to use lowercost drugs when theyre available. As the right policy direction that those policies need to be designed very carefully to assure they result in taxpayer savings and dont cut off access to important drugs. Where theres no competition in pbms have no leverage over prices, we would consider such tools as an inflation rebate, pricing to the clinical value of the drug, and would allow the medicare manufacture where the manufacturer has set prices in the absence of competition. With respect to part b we would suggest moving from a percentagebased payment to a flat fee, empowering physicians to form their own purchasing groups to negotiate prices and consider lowering the overall payment using the average sales price blended with an International Price index. Turning to the public just if justification of price increases. There is value in the information as a policy source and a motivation for policy action, and without additional action that in and of itself will not curb drug prices. That said, a welldesigned policy should set a minimum drug price and trigger reporting on both the percentage and an absolute dollar basis and require legal attestation of a Ranking Company official and avoid disclosing proprietary information. With respect to the sunshine ath we often act as a proxy for the manufacturers and we would report the economic samples, however, a cant issue public reporting cant be reached. At a minimum the sample value should be made available to oversight organizations and researchers. In closing, any policy that you undertake will involve a number of difficult tradeoffs a cross stakeholders and we know there will be stiff resistance from the status quo, but we also know that the status quo has produced noncompetitive behaviors, higher taxpayer spending and higher prices for the patient. Arnold ventures and its grantees stand ready to work with you on these difficult issues. I would like to thank you for your attention. I look forward to your questions. Thank you, dr. Miller. I was sent a nice handwritten note from my colleague mr. Long, and i should have done this at the outset of our hearing this morning. People are wondering what these yellow roses are all about. Well today is the 100th anniversary of womens suffrage and the suffragettes distinguished themselves as the vote was being taken, i think the final vote in the state of tennessee. The suffragettes and their supporters wore yellow roses and those that opposed them were red. So were celebrating today with the yellow roses women gaining the right to vote in our country. The 100th anniversary. So thats what the yellow roses are all about. We didnt attend an earlymorning wedding, but nonetheless, this is a great celebration. So now i would like to recognize dr. Holtz aiken. Welcome to you. Youre a an accomplished testifier and we look forward to your five minutes of testimony. Well, thank you, chairwoman eschew, and Ranking Members for the privilege of being at this important hearing. Drug prices are a very important topic in the United States, and i want to say a couple of things about the debate in general and then a few remarks on the pieces of legislation under consideration today. The first thing i would emphasize is that at least to my eye there is not a broad, general widespread drug pricing problem. Instead, its important to recognize that we have some targeted areas with extreme drug pricing issues notably in Specialty Drugs, oncology drugs rid now and in sole source drugs and in thinking of solutions its important to identify the problems first and i focused on those. Second, there is often clarity about which price people are trying to affect and there are different measures of price bandied about. There is the list price of manufacturers and probably most important price and the price postrebate that which the drug has acquired and the price the beneficiary actually pays at the counter including the out of pockets and the one most important to the American Public. Thinking clearly about that price allows you to avoid situations where you simply shift cost, but dont change the fundamental problem or address the issue itself. And then lastly, i think important to recognize that this is a difficult world of tradeoffs. There are no Simple Solutions because in the end there is no tradeoff between financial incentives like prices and the innovation that has made the United States the premier place for medical science on the globe and being cognizant of that as you go forward is very important and secondly, for this hearing the notion offen transparency i good thing. It becomes quite costly and not worth it and it interferes with the incentive to compete vigorously and to have fierce negotiation which we should want in our Health Market and particularly our pharmaceutical markets. In looking at the bills under consideration today, i think some concerns do arise. For example the spike act which looks at backwardlooking triggers for price increases or an absolute value of 26,000 for a drug, thats independently the value of the drug as Ranking Member burgess is on his remarks. It does trigger a set of disclosures and documentation that is quite intrusive and costly to produce and when combined with the potential for the secretary to offer a variety of different triggers backward looking and it could be a quite costly measure of transparence we no particular accountability measure that would guarantee any effort on drug prices and i would be concerned about that. The fair act is similar in character and has some, in my view, virtues of targeting and it is forward looking as opposed to backward looking and thats an advantage in this setting and it excludes vaccines and focuses on the drugs by physicians. It generates no end result in those situations. With regard to the samples which has come up a couple of times already the samples are very important to beneficiaries and thats been documented and so you dont want to damage this valuable source of drugs. I think it makes sense to build on the existing reporting rather than the new reporting provide the information to the fta and tell it to provide this information to oversight and to professional researchers so the information of samples on competition in the market is learned, but the damaging Public Disclosure is avoided, and i think thats something that the committee should think about and finally, with regard to providing public documentation of drags by pbms i have two sets of concerns. I understand how the committee should prevent the functioning and im a longtime fan of the Part D Program having been present at its birth. Occasionally, i say i like it more than my children. I wont repeat that today. Oop, too late, but i dont think the same sort of information would be provided for commercial transactions and these are private contracts and i dont think they should be publicly disclosed. So collect the information on part d and making sure that part d, there is vigorous competition and it is effective and it is appropriate and it should be done. Again, that means proprietary information provided to eversight and researchers and not necessarily disclosed to the Public Public domain. I do appreciate the opportunity to be here today and these are difficult issues facing the American Public and i look forward to the chance to shr your questions. Thank you very much dr. Holtz aiken, and again, we all want to thank our witnesses for being here today and the testimonies that youve given. Weve now concluded those Opening Statements and we will move to members questions. Every member, i think knows that they have five minutes to ask questions of the witnesses and ill start by recognizing myself for five minutes. Dr. Feldman, you said that pbms have pushed you to describe to prescribe higherpriced drugs, is that right . Microphone. Thank you. What i have found is there are some drugs that have come to market with lower list prices that have been unable to get on to the formulary because their list price was too low and what i mean by that is the price concession, for example, the rebate would be the list price times the discount times the market share. Nonetheless, you put it on the table that pbms pushed you to prescribe a higher cost Prescription Drugs. I want to go to miss bass and say to you, whats the answer to that . Our companies always negotiate to the lowest net cost. So why was she pushed to a higherpriced drug . Because the lowest net cost of that drug was lower than the drug with the lower list praise. So the higher was lower and the lower is higher. I dont get this. Yes. Maybe you can rephrase it. Yeah, so competition can raise prices or lower prices because the price concession is the highest price concession which ultimately theyre calling the lowest cost, sometimes to get at the highest price concession you needed highest list price and therefore a drug with the lower list price cant offer as big of a percent rebate, but i think thats that shouldnt be how it is. I think the lowest list price should get preferred status. So the way the math works on that, let me just quickly say. Quickly. If both drugs had different pricing, but they came in at the same low net cost that would be great. If they came in or negotiated. Our companies negotiate to the lower net cost and if its a lower list price drug that has the lowest net cost, that is the preferred drug. Well, there doesnt seem to be an agreement here. Dr. Feldman is shaking her head in the negative. Dr. Feldman, why do you think that drug manufacturers will not give samples to doctors if there is a public reporting requirement . I wasnt so clear on why you why i feel that way . It goes back to the list price of the drug. The fda requires drug samples to be reporting. So the reporting burden, at least on the surface, to me, i dont think would be a deterrent. I can tell you, if it actually worked to the opposite. Some of the samples that are given, the list prices of those are 6,000 a month and well get three months at a time. Its better that people dont know what it is and that that, in turn motivates samples being contributed . What i fear is that when it looks like the pharmaceutical manufacturers are giving this much money to the doctor that it may make them not do that. However, if it had just the opposite effect where everyone thought oh, look how generous pharma is, and it didnt affect the ability. I just want to do whatever will keep the samples coming for our patients. I understand. I understand. I dont think that the case has been definitely made on the point that you raise. Maybe it will be. I understand. Im not convinced. Were looking for mono pep were looking for savings across the entire system so that at the end of this chain, this pipeline and you heard members on both sides of the aisle say this so that the patient captures the savings. So that the price at the counter goes down. There are some things that are real market influencers, and i want to examine this. Ive thought for many years that research and development is the top cost, but as it turns out, the marketing of drugs exceeds that, it outstrips it and we only, i think, actively a study in market drugs that are on patent. Is there any major drug company that advertises generics . Anyone know the answer to that . I stay up at night, and maybe im missing one. I dont have the tv on at the right time. Theres something, i think that kind of stands the system on its head because its a huge cost, and i understand costs. There are many costs to bring a drug to market, but you know what . When it exceeds research and development which is absolutely essential, i think that we have an issue here. When the theres marketing to physicians, another Health Care Professionals, is there anyone here that can put a price tag on that, do you know . Do you know dr. Holtz aiken or dr. Miller . Mr. Isasi . This is hard information to get out because theyre so obfuscated and we know theyre spending 20, to 25 of the revenue. We know that marketing to physicians and other Health Care Professionals by companies increased from 15. 5 billion in 97 to 20. 3 billion in 20 cane. Thats about a 30 increase. And its much more than theyre spending on rnd on innovating. Does pharma want to weigh in on this . Wish to weigh in on it . Yes, i do. Thank you, chairwoman. I would say at the outset that i think its important to check our facts. We do hear regularly that the pharmaceutical industry spends more advertising and marketing than we do on rnd and at least speaking from my membership that is patently false. Frequently comparisons overstate marketing expenditures because those expenditures are pulled from the sales in General Administration figures which includes a whole host of things why dont you get us some definitive information from your viewpoint. Sure, i would be happy to do that. Absolutely. Ive gone over my time. I now would like to recognize the Ranking Member of the subcommittee, dr. Burgess from texas for five minutes for his questioning. Thank you. Dr. Feldman, as i look online, you referenced that youve been practicing rheumatology for five years and i am older than you are and i remember not only was there not much to treat arthritis and some was as hazardous as having the disease itself, colloidal shots, does anyone do that anymore . Very rarely. Toxicity and you raise the dose that your ringing became so loud that people couldnt hear. So i, for one, am grateful that as i look online there are about eight or nine by ionlogics that are available that are guiding not just relief for your patients and preservation of function which previously wasnt available. So thats a good thing, right . Weve got nine agents that now are available to you. I will confess, when i watch some of the ads on tv, and i play a little game. I had one of the pharmaceutical pricing apps on my phone and i type in the name of the drug. I, for one, would like to see, i think secretary azar is on to something when he says we have to disclose what the cost of the patient would be and if i were strong make a decision which drug to start, do i want them when Phil Mickelson is on and do i want them with what cindy lauper likes to take . I dont know how to judge that, but yeah, she is on my itunes, i promise you, but i think that information could be helpful and it might even be helpful for a physician to know that, as well, just going down this list of medicines and theyre all fairly expensive, but some are more expensive than others and is it something that you will be on over the long term and you correctly said, it would be wrong for a formulary or Insurance Company or anyone else to change your patients medication and thats the practice of medicine and we should not let that happen other than by a physician. Now on the issue of advertising generics, look at my state. Most states are the same. I read a prescription and the pharmacist and actually substituted it, even if i write dispenses, enif they agree with that, so no, generics may not be advertised, but at the same time the pharmacist has the ability to substitute the generic equivalent for the patient at the pharmacy counter, is that not correct . So, i mean, if im in the business of selling a generic why would i advertise . I got the good people at crestorcrestor already doing the ads for me, i dont need to do that. I have eight or nine medicines that are for Rheumatoid Arthritis and my professional lifetime and at the beginning of our profession those things were not available so its a great thing that theyre available now. I do not know how many trials there were that didnt work out. I suspect there were. I dont know how you go back and price that in, and i suspect that thats difficult to do. You gave a figure of, what . 12 success rate. I mean, thats a lot of dry holes that youre drilling in order to get the home run. I want you to drill those dry holes. I think thats important. I want you to have eight or nine medicines that not just treat a patients symptoms now, but preservation of function and thats the whole purpose of getting cures and were getting to the place where things that were unthinkable are now within our grasp and a single shot therapeutic cure a disease that otherwise not just would bankrupt an individual, but a family and perhaps a health plan, but now a single shot that can cure it. I dont know how you priced that in, well have to figure that out and thats why these discussions are so important because we do have to figure that out for the future. Sickle cell disease which was featured on cbs 60 minutes a couple of months ago, the cost for this therapy that dr. Collins referenced as a cure for sickle cell, i mean, thats a big deal. We heard this very room on this very table in 2016 the witness for Sickle Cell Disease association said there has been no new sickle cell fdaapproved treatment in 40 years. So when we look at the cost of this new sickle cell therapy. When we look at that cost, we have to look at it in light of the fact that we didnt improve at all, and what was the cost over those years when we didnt improve and weve got to somehow find a way to amortize that going 40 years into the future. Its a good time to be in the business that you all are in. The gentlemen yields back. I appreciate you being here today. We have tough decisions to make and were anxious to get on about making them, apparently thank you, dr. Burgess and the gentleman yields back. Its a pleasure to recognize the gentleman from North Carolina, mr. Butterfield, for his five minutes of questioning. Thank you very much, madam chair. Let me just begin with miss hillsdeber. Im sure i got that wrong. I have a trouble with names. Hillsderrma. Lisa j. , if you will. I am very pleased to hear that the Member Companies support the notion of trance paernsy and thats a very important work now and it means sun light and thank you very much for making the acknowledgement today especially with Prescription Drug pricing. What information would you consider to be inappropriate for transparency . Thats a very good question, as many on the committee other and witnesses have noticed we do need to be concerned about very commercially sensitive information, proprietary information that if released publicly could cause conduct distortions in the market that we may not love, that is why both of the transparency approaches on the table today do attempt to protect proprietary and confidential information and thats a very, very good thing. I suppose youre struggling every day to try to find a balance between those two entrants. Would that be correct . Absolutely. What circumstances would require you to significantly raise drug prices . I mean, what would be the circumstances that would precipitate an increase in drug prices other than corporate profit . Well, sure. There are many, many just give me two or three examples. Two or three examples. Increased costs, increased supply chain, expanded indications, expanded value. Maybe we learned that a drug is more effective than we previously thought it was. And that would be corporate profit . No. That would be separate from corporate profit. No, and i do want to talk about corporate profit briefly. You know, a lot of people say that this industrys profits are far out of whack with other industries and the truth is because traditional ktsing measures are not recognizing the high level of risk that this industry takes on and when youre talking about a 90 failure rate, the fact of the matter is that 10 of the time when we dont fail, yeah, its true that the investors and the private entities that invest in that help us find this very different scientific let me switch over to miss bass. You discussed the need to increase transparency in order to lower cost and improve the overall quality of care. Do you acknowledge that rebate practices are driving costs or do you dispute that . We would dispute that. Are you suggesting that the pbms are sufficiently transparent or is there room for improvement . As i testified, we are happy to report aggregate rebates. We have the same concerns that others on the panel have with respect to putting out information publicly that would allow for tacit collusion. Often when one competitor learns that he or she is disdowned more deeply than another competitor. What happens is that competitor doesnt discount as deeply as next time. You are a nonprofit entity and a 501c6. We are the trade association for the industry, yes. Which means youre not in the business to make a profit. Youre in the business according to your 990 submission. Youre in the business to lower Prescription Drug cost and increase access. Our trade association represents the companies that are in the business to lower Prescription Drug costs and increase access. Yes. You told the Internal Revenue service that your mission is to lower Prescription Drug costs and thats on the form 990 that you submitted. It sounds like we need to amend our form to say we represent the companies Whose Mission it is to lower Prescription Drug costs and increase access. Take a look at that, if you would. I will. Dr. Miller, let me switch over to you. The you discussed the importance of transparency and the consequence of congress inability to act to increase it. Why is transparency so important to implementing effective reforms and youll have 15 seconds. Im sorry. What i would say is i think is transparency can compel the issue forward. It may produce useful information for the congress and other policy actors to act. I dont think transparency in and of itself will be enough to affect the drug price issues that youre facing now. Thank you. I yield back. Thank you. I now have the pleasure of recognizing the Ranking Member of the full committee, the gentleman from or gon, mr. Walden for five minutes. Amen, chair. I have a question to mr. Feldman. Hr 2064 is an attempt to provide transparency and im worried that the bill would have unintended consequences of patients and they often provide samples to providers that help low Income Patients who may have trouble accessing a therapy either because they lack insurance or an insurance does not provide robust coverage for drug or device yet this bill replaces new reporting requirements on manufacturers and my question is doesnt this bill create a perverse incentive to not provide samples to offices and can you describe how lowIncome Patients are to manufacturers and other unintended consequences and im just throwing that out there. Thank you for that question, very briefly. I think there is a real question as to whether could cause the lessening of the provision of samples that i would note that a significant amount of information is already reported from the fda and this is kind of create will a dupe li cart, can it it sammys like a real convene wrens and say why doan you take this dr. Feldman, whats your view . We agree with medpacs recommendation under the confidentiality agreements and it can be something as simple as mandated mail orders for patients. Well deliver refrigerated drugs on the front porch in new orleans in the middle of the summer. That would seem to be a problem. Of course, we can offer them samples. Dr. Teigen . I dont know that it would eliminate the sample, but i think thats a risk you dont have to take. Have them available to researchers and oversight without the Public Disclosure people are worried about. I would recommend that. There are existing reporting for drug, but this expands to include the devices and it would be worth asking if its worth doing that. Thats a costly new set of reporting and im not sure samples are all that typical in the device world. Okay. Thats a good point, and i dont have too many people rushing me at town hall saying please, add more reporting requirements and more regulations and more rules, yet we know there is a place for that, but we have to be really judicious when we go down the path, when we have more bureaucracy and more time caring for patients. I want to put the patient first. I know a lot of tates are increasing through price increased disclosure, so my question is do you worry about the burden of companies complying with the state work and should congress, if we go down this path consider preemption language. Would you like to comment on that . Absolutely. I think we have seen transparency legislation enacted now in seven or eight states. Right. Obviously today we have two different approaches and for us they were competing approaches in the senate being as well so certainly harmonization of these reporting requirements is a high priority and preemption would be one way to achieve that. Dr. Holtz aiken, do you want to comment on this . Drugs are traded commodities that should prevail across all 50 states. Preemption makes a lot of sense. And on pbm reporting, my question is what diddy tail concerns of where or my question can you detail concerns where too much disclosure is anticompetitive. Im into disclosure and im into the public right to know, and i think the more out there, the better, but i also recognize there comes a point where too much disclosure could have a reverse and unintended consequence and if a consolidated mark was able to back in the sequence. Can you comment on that . I think thats a real concern. If you cant identify the deal that your competitors getting, thats information that allows you the ability to negotiate less vigorously and get a higher price and we never want to let that happen. So all of these desirable attempts to ensure that these markets are competitive i applaud, but disclosing those deals is a step in the right direction. Miss bass, could you comment on that, as well . Sure, it sounded like you wanted specifics and what we would recommend would be that making sure the bill calls for reporting by class. You would need to make sure every class would have three drugs otherwise it wouldnt be reported because it would go back into rebates and it is lagged to give time for contracts and we would want to make sure it wasnt pbmspike, but across pbms for the same reason. All right. I thank you all, and i know the chair has been quite generous with giving me extra time, and i guess in recognition of the blazers defeat. We appreciate that. Allaround nice man. I yield back. The gentleman yields back. I just want to add something here, and i believe that in this particular legislation that its referencing a class of drugs. Y is its not one at a time. Its a class of drugs and i think that we have to all members will have to do a deep dive on the actual words and thats our job to do, but i thought i would throw that in the mix. Thats a pleasure to recognize a real gentlewoman from california, miss matsui for herr five minutes of questioning. Thank you, chairwoman and i want to thank the witnesses per being here today. There is a need for Greater Transparency and thats a word we keep throwing around and in the entire drug supply chain that gives us clear insight into the formulary and negotiations and price concessions and market di dynamics that the price consumers pay for the medications at the pharmacy counter. It has outpaced medical inflation and lacking transparency, these price increases often seem arbitrary and indiscriminate and very confusing. I am particularly interested today in discussing the list price increases for drugs that are already on the market. A recent analysis tound that Prescription Drug crisis for drugs already on the market and not the new introductions of innovative therapies or consisting medications, upon for high cost, the growth in drug spending was largely due to increases where every price res cryption filled. You mentioned in the invoice prices for current drugs under exclusivity have generated 108 billion in revenues and that without these price increases revenues would have been flat over the last decade for brand pharmaceutical companies and overall spending would have fallen due to increased utilization of generic drugs. Thats a staggering statistic and speaks to the motivation some manufacturers would have to raise prices for drugs already on the market. Mr. Isasi, from your perspective, what are the reasons for the pricing for drugs drugs already on the market. Thank you very much for that important question. Its very important, all of us want whats best for americas families and we want to incentivize innovation for the development of new drugs, but what we know is the Current System is not doing that. As you point out, whats happened is so much of the pharmaceutical market share has migrated from patented namebrand drugs to generics and the Drug Companies are not developing the innovations that we need. So instead, theyre just raising the prices on the remaining patented drugs as fast and as quickly as they can, and there are terrible examples of this. Ill give you one example just last year it acquired rights, for example, a 20yearold drug used to treat cardiodisease, and the price increased to 375,000 and it was previously available from jacobs pharmaceutical and it could bed for free from the fda program and those are the kinds of abuses that were talking about upon. Doctor, do you agree . Im sorry. I agree with the direction of your conversation and the attention that i would where i would direct your attention is both in part b and in part d you could consider inflation rebates which would penalize back part of the revenue that a manufacturer gets through its price increase. You can devote that money toward giving greater patient protections. Okay. So, it seems that rising prices for a product thats been long on the market kind of represents a market failure. Is this a typical market response for products outside the pharmaceutical marketplace . Well, as a general proposition and what i understand about how broad your question is, no, its not typical. Insulin, in particular, im a posterchild for the problem. So, mr. Isasi and doctor, from your perspectives, do you think they account for drug price increases and i think i know the answer to that . Increase and i think i know the answer to that. No. What about high launch prices . No. Let me give you the example. Sovalidi was purchased by gilead. Keeping patients out of pocket costs high. What the plan pays as a net cost for a drug is calculated as a list price, minus the rebate, minus the patient outofpocket share. From your perspective, how are drug supply chain rebates presenting patients cost sharing from coming down . So, i mean, i want to be clear when i answer. I do think there is a role for negotiation and there is a role for a net price analysis in thinking through. Those savings can be spread more generally through the benefit. But given the current state of play in particular in part d, there are drugs being placed on preferred formularies because of the rebate and that is driving the out of pocket for the beneficiary and making it hard for the patient to afford it at the counter. Okay. To the chairwomans earlier question, when you were told chairwoman eshoo that the net cost was lower. The question is to whom. Net cost to whom. Not the beneficiary sitting in the pharmacy. I think i ran out of time. I yield back. Thank you. The gentlewoman yields back. Its a pleasure to recognize the gentleman from michigan, mr. Upton, the former chairman of the full committee. Your time. Thank you, madam chair. I got a couple questions. You know when we worked on 21st century cures, we spent a whole lot of time thinking about policies that advance new treatments for patients who had no therapies available, sort of like what former chairman walls was saying about sickle cell. One of the main goals was to reduce the burden for Small Companies to ensure that new therapies got to patients who literally had no hope. So im a little bit worried about the spike act which is one of the bills were looking at today. An opposite approach perhaps. The bill sets an arbitrary launch price level that triggers burdensome price reporting for companies. Many of the drugs produced for the orphan diseases are often developed by Small Companies. So the price threshold doesnt always account for rebates and discounts provided by the manufacturers. If were going to consider federal price reporting, shouldnt we keep the focus on price increases rather than launch prices of orphaned drugs produced by Smaller Companies advancing cures . Dr. Holtzeakin, whats your reaction to that . Couple of thoughts. In the end, i think its important to focus on what the beneficiary ends up paying. Often theres a big gap between list and what they pay. Often they pay the list and thats through the rebate structure. I think thinking through that carefully is important. I do think that the kind of documentation thats envisioned by the act is unprecedented. Ive never seen a request anywhere else in the economy. For smaller manufacturers, it would be burdensome. Id be concerned about that. I dont see that this produces any particular pressure on pricing. So its a pretty expensive piece of transparency that may or may not be effective. My next question is concerned about the hr2064, the sunshine for samples act of 2019. It impacts both drugs as well as devices. So in 2017, med pac recommended that congress required Drug Companies only, didnt include medical device companies. So as you look at device companies, they often provide, i guess, some free devices that are used, like prosthetics and others to measure. But really a device is a onetime deal, and what are your reactions to including devices as well on to this bill versus just pharmaceuticals . I think it would make sense to not include the devices, see how effective the bill would be if it goes forward on the drug front and you could revisit that issue going forward. Devices are different in terms of the onetime aspect. There is no existing reporting. Thats the most costly part of what would be envisioned on this. And i would just, again, say i think building on whats in place as opposed to creating a new reporting channel makes a lot of sense. And that you can have oversight and you can have the fda be required to provide the data to professional researchers to make sure that samples are used for the therapeutically appropriate functions and not to distort physician decisions. Thats what you want to know. All that can be done without a public website. Yield back. The gentleman yields back. I now recognize the gentleman from new mexico for five minutes of questioning. Thank you madam chair. Dr. Miller, you noted in your testimony that more and more drugs are saving peoples lives or vastly improving their health and quality of life. Launching unsustainable prices that are simply unaffordable. What tools are currently available to control launch prices for the first in class sole source novel therapies and are there any mechanisms currently in place that constrain the price for these drugs . As a general proposition, i would say no, that the mechanisms are not in place. I think it goes back to some comments earlier. When you grant a patent, youre granting a monopoly and the company can charge any price. I think the tools im trying to direct your attention to and the testimony and some of my comments is, in part d, you might think of additional tools in the instances where you dont have a competitor. Part d was created to exploit competition and have the pbms negotiate. Youre still going to have drugs that dont have competition and you might want to think about pricing to the clinical value of the drug or some kind of negotiation strategy. How should we make sure manufacturers are accountable to the public when setting prices for newlylaunched drug products . Well, i think if you were to pursue the mechanisms that i just mentioned to you, that would bring a greater accountability and at least a better price to the Medicare Beneficiary and to the taxpayers if thats what you meant. The question that we had last week at hearings as well was the notion that theres a system thats been established such that you post your launch price, which i regard it as the highest price, then you have a lot of negotiations, theres discounts, theres rebates, theres other pieces that get to different lowest prices, if you will, that you have for each partner. I just have a hard time understanding why we dont get to that lowest price to begin with. They know how low theyre willing to go. They know where theyre going to be. If this is truly going to take into consideration the impacts to the patient and lowering costs, then thats where we should start. Mr. Is it isasi . You noted that the threshold to trigger reporting requirements for newly launched products should be reduced from the current amount included in hr 2069 of 26,000, the Median Income of average medicare beneficiaries. Can you explain why families usa would like to see this threshold price reduced for reporting purposes . Thank you for the question. Its critically important. As the changes take place, industry is going to adapt. Well find all the launch prices come just under whatever threshold is set. Weve got to lower the threshold to a threshold based on the realities of the families who are in the benefit. To your earlier question, i want to mention that a lot of folks dont realize this. From the industrys perspective, Even Companies that arent american, they start here in the u. S. Launching first here. Because were willing to pay the highest price twice, three times, four times more than the rest of the world. They start here, they set an incredibly high price and go out in the rest of the world and negotiate. Because we dont negotiate. I want to talk about the average Medicare Beneficiary. I agree with your response. Thats a concern i have. How do we address that and how do we set up a better environment when it comes to fairness to the question that i asked dr. Miller. The number of people that are going to go without these therapies because they cant afford, which is growing in the United States. The advocacy that youre bringing forward in your testimony about lowering the amount thats listed in 2069, the 26,000, in your case would be a lower amount, but 26,000 is how much a family would make, would earn in a year. All that this is saying is, if youre going to list your drug price higher than a Medicare Beneficiary makes in an entire year, you should say why . Does that sound fair . Very fair. Madam chair, as we talk about pricing care and the notion that if we leave it alone and if Congress Walks away and no one wants to be a part of this, it will fix itself, its not worked yet. Too many people out there are suffering. Theyre getting hit every day. We should be reminded that we made a commitment when we went to the American People over the last two years that we would pass legislation to lower the cost of Prescription Drug prices for the American People, and we better deliver on it. With that i yield back. Amen. The gentleman yields back. I now would like to recognize the gentleman from virginia, mr. Griffith. Five minutes for questioning, sir. Thank you very much madam chair. Let me say so that everybody is clear, my democratic colleague just said that taking no action isnt working. Hes right. Were going to have to take action. Well have to sort out what the best action that we can take. But i think both sides of the aisle are dedicated to figuring out how to fix this. Theres different ways to do this and all kinds of issues. Dr. Feldman, in your oral testimony, i was taken with what you were saying and you indicated you had a patient who had gotten a call to change their drug, i believe it was for Rheumatoid Arthritis, is that correct . I want to know who called. Not the individuals name. Was it the Insurance Company or the pbm, who called them and said lets switch you over to this new drug . It was the pbm and they received a notification in the mail. They received a notification from the mail from the pbm. Were you ever consulted about that . No. In fact the patient brought it to me and said ive been asked to switch to this drug, a lower cost alternative. Its not necessarily a lower list price. This happens all the time when you have midyear form lair changes. Patient just get dropped. They wont even pay for it anymore. This was slightly less egregious than the exclusion of a drug from the preferred form lair. You indicated that the drug was not similar. It was not really an alternative for that patient. Can you explain that to me . It really it treats Rheumatoid Arthritis, but it was not a therapeutic equivalent drug. There are different mechanisms of actions in the immune system. This patient finally ended up on a medication that affected t cells in a certain way. This one was something, a different drug entirely that did not affect the same part of the immune system. It would be ridiculous for me to change it. Let me try to break this down into more simple terms that i can understand and hopefully the folks. Folks watching this later or now will be able to understand. Antacids, i take zantac because i have lot of Food Allergies and stomach upset is caused by allergies. That being said, tums doesnt do much for me as a result of that and zantac has antihistamine in it. So are you saying they took him off the zantac and moved him to the tums. Something like that . Scientifically its not the same but conceptually yes. At least i got the concept. Miss bass, shouldnt bpms at least try to contact doctors to say for this patient, does this switch make sense because were trying to save some money . I dont mind somebody saving money, but lets make sure it works for patient. In those kinds of situations there are definitely appeals rights for everybody in medicare and every private sector plan. Pbms absolutely work with doctors to figure out in that instance what the right thing is. Patients dont understand the appeals rights or the appeals process. What about the cases like dr. Feldman said. In some cases they dont even give you a choice. Its a matter of were no longer paying for the drug youve been on for four or five years thats been effective for you and were switching you over. You can pay for the other drug if you want to, but were not paying for it. That can be disruptive. I agree. What can we do about that . Again, there are exceptions in Medicare Part d and there are processes to go through. In that instance, the patient would have to go through that with his or her physician. So the physician and the patient are going to have to have a lawyer to help them figure out the process, is that what youre saying . Thats why we need the samples to continue the patient on the correct medication. It can take six to eight weeks to go through an appeals process. Thank you. So that way you have more time to go through the appeals process. Thank you, dr. Feldman. How many different pbms are members of your association . Right now about 15. About 15. So across the country, we have about 15. How many pbms do we have . There are 66 full service pbms in the u. S. And more organizations that provide pbm services. Does that seem like a monopoly in pbms. Three pbms control nearly all 80 of the population. Yeah. Thats why i was asking the question. I understand you cant answer that, because youve got an association to represent. The point is, when we hear testimony that the pbms are asking our drug manufacturers to raise the list price and then many of them get a percentage of the cost of the drug for handling it, it looks to me like we got the foxes in the hen house and were going to have to take some action. I yield back, madam chair. Thank the gentleman and he yields back. And now id like to recognize the gentleman from oregon, mr. Schrader for five minutes of questioning. Thank you, madam chairman. Appreciate it very much. I would associate myself with the remarks of the last two members that talked, because industry is unfortunately, the situation where a lot of changes, the pricing structure is completely opaque and very complex. I dont blame anyone in any of the Industry Sectors for that. Just grown up that way. As a result, it calls for, unfortunately, our work here to make it a little more transparent and everyone apparently loves transparency. But what that means is in the eye of the beholder is what were hearing now. Hopefully based on hearings weve had and hopefully give the American People some assurance that were on their side and trying to help not stifle innovation but at the same time make sure they get the best deal possible out there. Appreciate you being here. Appreciate your discussion and role that rebates may play. Having a higher list price drug get a preferable placement on the formula, can you give any examples of medicine where you think that might be the case . Well, its challenging for me as a trade association to speak to what would really be a proprietary arrangement, but i can say that i noticed last week one of our Member Companies did testify here and talk about the difficulties it has had with formulary uptake after it did lower the list price of one of the blockbuster medicines. There is that in the record. I believe that other statements have been made on the record in the diabetes space where weve seen companies launch authorized generics with the hope of being able to lower that list price and they, too, have faced some challenges. There certainly are examples. So then do you think Public Disclosure of the discounts, including administrative fees would be helpful preventing this . Yes, we do believe more disclosures, including administrative fees would be important. Weve seen the fees increase enormously really in the last several years. And at least my read of the current statute is that a whole swath of administrative fees are excluded from reporting under section 1150a that was enacted by the baca. Seems a little bit like they double dip. You have the rebate situation and then the negotiate of prices and then this administrative fee, which seems a little inappropriate. Miss bass, appreciate the explanation of the role at least in your testimony that p and t committees and evaluating the clinical and medical evidence out there before making coverage recommendations. This cost and rebate amount play at all in these determinations . The p and t committees work solely on the clinical efficacy of the drugs. Then they give their recommendations to the pbms and the pbms go and negotiate to the lowest net. If thats the case, how does it explain the highest list price drug with a greater drug rebate receiving a more favorable formulary placement oftentimes . If the lower list cost drug came down as low, the net cost basis, it would be on the formulary. So it does have an impact apparently. Do you support increase in transparency in the fees, including administrative fees i just talked about that youll receive from the pharmaceutical companies and also dir payments that go on with the pharmacies . All of the fees and pharmacy dir are reported in Medicare Part d to cms. In the aggregate, no. Question for dr. Feldman on the samples. I listened to dr. Burgess talk about his lack of attention to the samples from the standpoint of what hes going to prescribe. He knows what his patient needs best. The samples, to your testimony as a veterinarian for many, many years, do provide an opportunity for a patient to get much needed care they couldnt get otherwise in the interim. The sample issue seems much to do about nothing. Is there really a reason to collect all this data and go down that road in your opinion . As long as it keeps the samples coming for the patients that need them, im happy. I have specific examples of a lower priced drug not getting on the formulary. Following up a little bit, would utilizing existing frameworks for evaluating the quality of a physician and their conduct, how they do things, be a suitable metric for lifting prior authorization. You testified about how that really makes it difficult, ergo the samples become important. Were trying to find ways to lessen the requirements for prior authorization. Are there some policies that a Physicians Office or a hospital or whatever follows that might give us some guidance to help us help you . Yes. With specific guidelines and pathways developed by certain physician groups we can bypass p. A. s on certain things from mris to certain drugs. If we could get some of that, that would be outstanding. I yield back. The gentleman yields back. I now recognize the gentleman from indiana. Thank you. I was a surgeon before. I would agree that the sample issue is a red herring. As a physician, the basic premise that we Practice Medicine based on this type of thing as a group is false. I would decide what type of medication that patient is on and then ask my staff, hey, do we have any samples of this, not the other way around. The other thing from a pbm perspective i dont like restricted form lairs. Weve heard a lot of testimony. That may not be pervasive across the industry but theres substantial evidence that thats happening. I dont believe it when people say that Drug Companies arent being called literally daily and talking about the list prices and their margins and things like that. That is happening. The incentives are just not aligned. The last thing ill say and then i have a couple questions is that weve been going after providers since the late 80s cutting reimbursements to the people who are actually in the arena taking care of patients. And it solved all our problems, right . Its the providers fault. They make too much money. Theyre doing too many procedures. Theyre prescribing too many drugs. The reason we havent been able to make a dent in medical prices in fact, its worse not only this but in other areas of medicine is because thats not the problem. Now weve got shortages of physicians nationwide as a result, including particularly in primary care. As part of hr 2087 all drug manufacturers would be required to submit information to the secretary on the average sales price. However, it is my understanding that certain medical devices that are reimbursed under the drug benefit could be excluded from this requirement in keeping with the spirit of transparency and market based pricing, is there opposition to including a policy change to include such devices reimbursed as drug products also would be subject to asp reporting . From the perspective of pharma, no, there is no opposition. On the samples, dr. Feldman, you raised the issue. Is there any evidence that in your view anywhere that samples that are given to physician offices have any effect on overall practice of medicine . And also doing this type of reporting, do you feel like it would do anything to lower drug prices . I dont think it will do anything to lower drug prices. No, they have absolutely no bearing on my prescribing habits whatsoever. Do you think particularly that the sample issue is a big enough issue that it would have any substantial impact on lowering drug prices . As you pointed out, the key here is outofpocket costs. Thats what were trying to get down. I dont think the sample issue drives much. Theres really no evidence that that would be the case. Miss bass, what do you think of the administrations proposed rule on rebates . We dont think that the administrations proposed rule on rebates will do anything to lower list prices. How come . Because the manufacturers set the list prices and the pbms negotiate lower net costs but pbms are not involved in list prices. Dont get me wrong. I know that pbms have a value added role in this whole thing. My personal view is that the proposed rule is although the devils in the details, is something thats going to take away upper pressure on list price. I know the pbms all say it wont make any difference at all but i would argue that it does. Whats your view on that . We would respectfully have to agree to disagree. We do think there is a conversation to be had around the use of the price concessions pbms negotiate. Right now theyre used for premium and part d. What the secretary is trying to get at, i believe in part, aside from lowering list is to help people at the pharmacy counter. With your indulgence, madam chair, you have a comment on that . From the economics of it, if you have the ability to negotiate rebates, you ought to have the ability to negotiate prices. Its the same negotiation. It would be more effective if the rule covered not just part d but the commercial market as well. I agree. Thank you. I yield back. Did you want to add something to that, dr. Miller . You looked like you were just ready to turn your microphone on. I didnt recognize him to respond to my question. Im recognizing him. Okay. Fair enough. I mean, we think the most credible analysis is that it ends up in the Part D Program adding to the cost of the taxpayer and that it doesnt have a significant effect on list prices. Thank you. Recognize the gentleman from california. Thank you very much, madam chair. Thank you for recognizing as the chair as you have a right to do so. Also id like to thank the Ranking Member for having this committee as well. Im very proud to serve on the energy and commerce committee. We take the time to consider many perspectives to we can move forward with meaningful legislation. Right now americans across the country are hurting. Its our job to tackle these big problems like drug pricing to help all americans to give them real choices that dont involve choosing between keeping their families fed and keeping them healthy. With that in mind, we have had several hearings now on Prescription Drug pricing. One thing we have been hearing about is how efforts to cut costs are just not making it to the everyday american citizen. Miss bass, thank you for being here today. Im interested in discussing how price concession and rebates directly impact consumers and whether insurance plans are more likely to benefit from these negotiated prices. You mentioned that Plan Sponsors can determine how pbm negotiated price concessions are used. Can you explain some ways that health plans and specifically Prescription Drug plans will use rebates and other price concessions that pbms acquire . Sure. Thank you for the question. In part d the rebates are used to lower the premium and keep it affordable. In other instances they think about the rebates when theyre setting their enrollees cost sharing. So your 10 generic copay and your 30 preferred brand copay, your health plan is probably taking into account the rebates that it gets when it determines that level of cost sharing. So it goes sometimes toward premium, sometimes toward cost sharing. It depends on the plan. In part d its almost always for premium. So what you just described, it could be that the biggest beneficiary of the system that we have today might actually be favoring the Decision Making of an insurance provider, not necessarily directly to the end user, the citizen . I guess the way i would characterize it is it benefits all enrollees toward the lower premium. If the plan sponsor decides to put it toward cost sharing, then it helps the people who are using drugs that have rebates, and 61 of brand drugs do. Are plan sponsored required to disclose how they utilize price concessions . In medicare, every plan sponsor reports its rebates, its fees, which we talked about earlier, to cms, and cms is aware of how those are used. In the commercial market, the pbm discloses to the plan sponsor what its rebates are, but Plan Sponsors are not required to publicly disclose or even really to the secretary how they use the rebates. Id like to point out that on hr 2376 the prescription pricing for the people act would require the federal trade commission to study the role of pbms in the supply chain and report to congress on recommendations. Do you have any recommendations on how we can best ensure con sumers are directly benefitting from the cost savings generated by price concessions and rebates negotiated by pbms . First of all, we welcome the ftc review. Our recommendations are that in part d you as policy makers and in effect youre overseeing the Plan Sponsors have a conversation about should that money be used for reducing premium, holding down the premium, or should it be used for reducing cost sharing. Thats a conversation you as policy makers should have and we welcome that conversation as well. Again, madam chair, i really appreciate the opportunity for us to cover this really important issue. Health care is complicated. Earlier today i was able to meet with a young woman in my office who actually grew up in my zip code. Very few people in my zip code actually make it to four year institutions. She went beyond that and shes currently studying to be a doctor. Shes in her third year. I asked her what motivated her and what motivated her was her little brother who passed away from a nondiagnosed illness. He was a little boy when he died. When he father got very ill, she urged him to go to the doctor and he said i never want to see another medical bill again and shortly thereafter he died from a heart attack. My point is, here we have a young person as an example of an american citizen who decided thats how im going to try to make the world a better place, by becoming a doctor. I hope that we have that same urgency as members of congress to make the world a better place for american citizens and for everybody in this country by doing what we can in the way weve been elected to do so. Thank you to the witnesses and thank you madam chair. I yield back. The gentleman yields back. Thank you for your beautiful words. I now have the pleasure of recognizing the gentleman from florida who has an important bill with mr. Cunningham, the creating lower cost alternatives for your Prescription Drugs act. The gentleman is recognized for five minutes of questioning. Thank you, madam chair. Thank you for holding this very important hearing. Weve had a couple hearings on this issue and we should be focusing on this issue because this is what a lot of our constituents care about. I have a lot of seniors in my district. Lowering drug prices is of utmost priority for me. To that end, i want to ask a question of dr. Holts. In the bill that i recently introduced as madam chair alluded to with congressman cunningham, the creating lower cost alternatives for Prescription Drugs is a great first step in my opinion, modernizing part d to lower Prescription Drug costs. However, its a first step. I believe that part d has been an outstanding program, one of the greatest programs weve had and its been below budget, like 40 below budget and its helped out our seniors. But we must upgrade it and modernize it. I understand that aaf has a comprehensive proposal for modernizing part d. Would you please share your input . We would be happy to provide a copy of the paper that hayes wrote, whos here with me today. Its similar in spirit to what dr. Miller discussed in his remarks, which is what we see in part d is the most rapidly growing taxpayer cost in the reinsurance area. Its above the catastrophic maximum. The proposal says why dont we have the Prescription Drug plans and the pharmaceutical industry be responsible for their share of the cost above that catastrophic maximum so the incentives to have high priced drugs are diminished. Have a sort of typical 8020 split for the remainder of the drug so pdps have a real strong incentive to get pbms to negotiate on their behalf for the remainder of their drugs where theyre not sole sourced and there is more competition and the possibility of vigorous competition is much more likely. It is a good program. Its not broken. Its been very successful. But we can sharpen the basic negotiating incentives built in the program and make it better going forward. Very good. Dr. Connors developed incentives for rare disease therapies where innovation was previously almost nonexistent. How might the spike act in its current form have an outsized impact on future innovation for rare disease Drug Development and how can we best address this concern . A couple things. You know i have any reservations about the spike act. I mentioned them in my written testimony and opening remarks. There is nothing about it that i think guarantees lower drug prices. It is most likely to impact those startups specializing in those kind of drugs where launch prices are typically very high. Youll be above this arbitrary threshold with a very high value drug. Having said that, i dont think transparency in the end is going to deal with the places where we have high drug costs in the United States. The things under consideration today have merit but theyre not ultimately the solution. Its fundamental reforms of the type you talked about in part d. I think those are important. In part d where theres no reason to give 6 of the asp with the delivery of a drug, reimburse for that instead. Those are the reforms i think will be more effective than just transparency. Often when discussing high drug prices we tend to focus on what is wrong without mentioning what is going right to make sure we achieve the desired result that does not undermine the progress thats already been made or produce negative unintended consequences. Can you share with us what is currently working and how we might double down on these efforts . There is a tradeoff between financial incentives like prices and innovation. We are literally in an era with unprecedented innovation, the capacity to treat illnesses that were not previously deemed to be treatable. All of that is evidence of the power of that incentive. Its important to hold onto that. I also think its very important to think priced for who. Thats come up several times. And keep focusing on the fact that in some cases, for example, with the rebate rule, if in fact list prices dont go down, then theres a chance that premiums will go up for everybody, but the people who are going to be protected are those who have the biggest drug costs and the most severe conditions. Thats exactly what an Insurance Program should do. Lets keep track of whose price is being affected as much as prices in general. I yield back, madam chair. I would like to recognize the gentleman from vermont, mr. Welch. Thank you. Just starting to acknowledge something that dr. Holts said, we have made a lot of progress in pharma. Unfortunately the price is starting to kill us. You mentioned that r d is a big deal. Theres 9 failures for every 1 success. My question is this. Would you on behalf of your member organizations and companies provide to the Committee Specific and concrete information as to how much each Company Claims it spent on r d, how much it spent on advertising, how much it spent on stock buybacks and how much it spent on the top five paid compensation executives. Would you do that . I would have to consult with my counsel. This is not a mystery here. I mean, whats the big deal . Pharma is claiming that it spends all this money on r d, but it wont show us the books. At a certain point, count me as skeptical. Now, dr. Miller, i think your Research Shows that what pharma claims it needs to spent is about 176 higher than what actually is required in order for them to get the return. I just want to be clear that the research im citing by other people, it was summarized in my testimony. There were a couple of things that were said. The amount of revenue that comes out of the United States alone exceeds world wide R D Investments by Something Like 70 . And there have been study that is the arnold venture supported that show that the cost of producing the drugs are less than being claimed by the industry. Suggesting its an inflated claim by pharma. Yes. Madam chair, all of us want to know what the facts are. So you wont answer me now. Youve got to go back to your, quote, counsel. Go back to your counsel and answer me and tell me whether were going to get that information. I would be happy to provide the wealth of information thats already filed by our companies. I do not want a wealth of information. I want four issues. One, r d spending. Two, stock buybacks. Three, advertising. Four, executive compensation. Thats all i want. I believe thats all available. Theres the justification of r d. Sonofy increased the price of its drug lantis 200 . That drug had been on the market since 2001. Presumably the r d done to put that drug on the market was done before 2001. How much r d was justification for that explosion in the price from 2010 to 2018 . I expect it would be r d for treatments and cures that were still waiting for, not for that product. Give us the facts, all right . You have made some criticisms that i actually think have merit about transparency. I want transparency when theres a claim that justifies the price increases. In the heart of this is you nibble around the edges, but what it reflects is the frustration that states and payers are having to try to get some grip on how theyre getting hammered every year. And my question is whether some of the suggestions dr. Miller makes you agree with where we have to really bite the bullet and have the government play a role that our government is the only one in the western industrialized democracies where we stand aside and let the consumer get hammered. Price negotiation. Would you be supportive of some of the price negotiation suggestions that dr. Miller is makinhow much r d was justifin for that explosion in the price from 2010 to 2018 . I expect it would be r d for treatments and cures that were still waiting for, not for that product. Give us the facts, all right . You have made some criticisms that i actually think have merit about transparency. I want transparency when theres a claim that justifies the price increases. In the heart of this is you nibble around the edges, but what it reflects is the frustration that states and payers are having to try to get some grip on how theyre getting hammered every year. And my question is whether some of the suggestions dr. Miller makes you agree with where we have to really bite the bullet and have the government play a role that our government is the only one in the western industrialized democracies where we stand aside and let the consumer get hammered. Price negotiation. Would you be supportive of some of the price negotiation suggestions that dr. Miller is making . Let me disappoint you. When i was cbo director we wrote studies that said that negotiation wouldnt lower spending. Without a formulary . Thats a key part of it. You get savings with a formulary. The formularies we have now are not done on behalf of the public, theyre done for the benefit of the pbms. Give me the steps we need to take to bring to heel these outrageous drug prices. In Medicare Part d adopt the changes that bring more pressure on the pbms and change the risk structures. Theres a whole set of patent anticompetitive behaviors. Last one, this is where we disagree potentially. On the drugs where there is not competition, thats where were recommending that you think about things like negotiation and or reference pricing and we think it can be done without formulary exclusion and im happy to talk to you and your staff about that. I yield back. I now recognize the gentleman from oklahoma for 5 minutes of questioning. Thank you madam chair. Im going to focus on the fair act. Theres going to be a little bit of a difference of approach. This is the difference between the gentleman from vermont and myself. We both agree that drug pricing is too high. We 100 agree with that. We do agree there has to be something done. The approach is whats different. I believe in the private industry. I believe that when the government gets in things the entry to the industry gets more difficult and less competition is there at that point. The more regulation that you put on the industry the less people are going to enter into that industry. Its just matter of fact. When you start looking at the fair act, you start looking at what its wanting the companies to do. What that is is just one step closer to i think what the ultimate goal is to some members in congress and that is to take over the industry and be government ran. Thats the quickest way you can possibly kill an industry. Look at the fair act. It says they want the total revenue and net profit generated from the qualifying drug for each calendar year since the fda approved. The total revenue and net profit for the manufacturer 1236 months. What does that have to do with anything . The compensation for the executives, what does that have to do with the federal government . Since when does the federal government get into the fact that they can limit the compensation for a nongovernment employee. We want to figure out how congress with make it more competitive. Congress is not in the business of creating businesses. We should not be in the business of creating jobs. What we should be in the business of is creating an environment for entrepreneurs to create jobs. When you allow competition in the market, then youre going to start seeing the competitive prices move downward. Dr. Miller, what you said a while ago, i think there might be something we can work on there when you said what congress should maybe look at is when there is no one else in the market, when its a Specialty Drug. I could see that. I could see where there could be a way for us to possibly find an area to where we could help come up with a rebate or where you kind of look at it with the insurance with someone with preexisting conditions where we can help offset some of that cost. There could be some areas to work on there. I agree theres plenty of bad actors here. Everybody has some stake to blame in this. What i dont want is for congress to overreact. I believe thats where were moving especially when you start looking at the fair act. How do you pronounce your name . We say joldersma here in the u. S. Im going to say maam. Is pharma opposed to reporting price increasing to the secretary . No. In fact, thats already publicly disclosed. What kind of problems do you see with the fair act . One leading concern is it is somewhat ambiguous but it appears that it could be applying retroactively because one of the triggers is a threeyear trigger. You know, you think about that taking in fact in 2019 we are concerned that that is effectively imposing the requirement going back to price increases that were taken three years ago. That retroactivity seems not ideal and not a great precedent. You know, its certainly challenging to comply with the law in good faith when the law was not even on the books at the time the conduct occurred. Thats probably our top issue. The fair act requires, i believe, a 30day notice. Yes, sir. Is that time acceptable . It does require a notification of price increases 30 days in advance. It goes to the secretary. We are concerned that that could lead to some negative behavior in the market including potentially opportunistic buying at the lower price, stockpiling. That could lead to drug shortages, et cetera. In general, we are very concerned with advanced notice. With that i yield back. The gentleman yields back. Now i have the pleasure of recognizing the gentlewoman from new hampshire, ms. Customer. Thank you. So far weve had multiple hearings on the critical issue of our bipartisan efforts to lower Prescription Drug prices. Drug spending is placing an undue burden on patients across this country and taxpayers. You mentioned in your testimony whether we like to admit it or not, we are actually rationing drugs in our country. In our Current System, patients and payers are forced to make difficult tradeoffs and choices. I want to step into i understand theres no Silver Bullet on bringing down the rising cost of drugs but i do want to focus in on your testimony if i could, mr. Miller. You mentioned how transparency efforts under consideration would not necessarily lead to lower drug prices though they might help us understand more clearly why drug prices are increasing at the rates that they are. Do you believe that requiring justification for launch prices and price increases will at least slow the rate of growth in drug prices or that pharmaceutical Companies Might reconsider price increases with transparency . I think you could have some small sentinel effect. I think ultimately it doesnt stop the wave. So your advice seems to be to go further than that and go toward the negotiation of volume discounts. And in particular im looking at the medicare negotiation based on leveraging volume discounts. And you mentioned part d negotiation. Can you elaborate on how part d negotiation might look especially taking into consideration the high cost of drugs now with limited competition, it seems like theyre paying more than they should. We think in part d once again bringing the pressure to the pbms and the manufacturers in the catastrophic cap to kind of force negotiations where in fact you do have competitors is very important. Then im stepping into your question. Sorry about that. But you will still always be faced with very expensive drugs that dont have competition. So theres a few ways we would suggest that you might think about that. One is you think about a reference price. We look at the clinical value of the drug and say that the Medicare Program will cover this drug but the price it will pay and the beneficiarys copayment will be tied to the clinical value. Clinical value maybe as compared to hospitalization or as compared to future surgery . How do you determine clinical value . Usually youre talking about the performance of the drug in and of itself on the value it adds to the life of the patient. You could engage in other studies but mostly what were talking about here are clinical and cost effectiveness analysis that talk about extending the patients life, that type of thing. You could think of a negotiation process in which you set lanes for the bids so that youre saying there is some range of negotiation between the manufacturer and the government but it is not completely wide open. You might use some of the clinical effectiveness to set those ranges. Its a way to try to get a more rigorous process that cb might give credit for. Do you think that the federal government is taking maximum advantage of their volume purchasing power, if you will, in the negotiations . For example, if we were to consolidate for medicare and medicaid, veterans, federal employees, d. O. D. , all of these together, do you think that we could do better in the price negotiation for the drugs where there is an equivalent where were talking about competition . Youre not talking about the drugs that dont have competition. Youre talking about the drugs that do have competition. I havent thought about it. I just want to say one thing. There are certain tradeoffs in how you do that. For example, in medicaid, there are very large discounts. If you move to a different system you have to ask yourself do you lose those discounts. Can you do better than that discount. And va which im very uninformed on, same question. As a theoretical concept, would you agree that the larger the volume share thats exactly where i was going. Straight economics, bigger volume, bigger ability to extract discounts because its harder to walk away. Thank you. I yield back. The gentlewoman yields back. I would now like to recognize the gentleman from North Carolina mr. Hudson for 5 minutes of questioning. Thank you. This is very informative. Every time i go home i hear from my constituents about high drug prices. Ill never forget the constituent i met who said she literally had to choose between picking up her prescription or paying for groceries. This is a problem. Im having a tough time seeing what some of the policies will accomplish for american patients. I took one of the most recent examples of a drug failure. Biogens alzheimers drug. Looked at what it would take to recoup their investment. It was disheartening for me and many others, particularly those who have relatives with alzheimers but also illuminated what it takes to bring a drug to market. There were 5. 8 Million People in the United States with alzheimers. This is a bargain compared to not only the roughly 350,000 of cost to care for an alzheimers patient over a lifetime of the illness but also the emotional cost that families endure watching a loved one deteriorate right before their eyes. Under the spike act, this price for anything higher would have triggered a naming and shaming exercise. What benefit does this have for patients . Ideally patients this brings me to my questions. The fair act includes high penalties for noncompliance. Where should those penalties where should that revenue go to . As its currently written, do you see them going to benefit patients or going back to the treasury to be spent by politicians . Shouldnt they be explicitly designated to help those who need it most and not just go to the treasury for congress to spend . Ill just open it up to the panel if anyones like to talk on that. We would agree. We would note that the fees are quite high. And, yes, it would be ideal to have those fees going to help patients. Anybody else . I see some nods. Okay. Its kind of a nobrainer. Back to the patients. Okay. Ill assume everybody agrees. Ms. Bass, your testimony, you mentioned the realtime benefit tools to know which drugs, what the cost sharing would be. How could your industry, pbm industry, facilitate making this a reality . So those tools are already in use. I think one of the issues everybody understands it needs to be as streamlined as possible for a physician work flow. Hopefully the interoperability exercise that the administration is currently undergoing will help make sure that every physician has access and can and works really quickly. But all of our most of our pbms are making that Product Available already in the marketplace. All right. Ms. Joldersma, i hope im not butchering your name. Lots of states have been passing legislation to get while drug prices are increasing. The bills were talking about today go beyond any state law currently on the books. You worry about the burden of companies complying with a patchwork of 50 state laws plus this federal law . If there ever was a time for preemption, seems to me this would be it. What are your feelings . Absolutely. Its you know, there are, i think, seven or eight different approaches already on the books in states. There are additional states who are probably today considering different approaches. We have different approaches that are coming to light here in the congress as well. And, you know, all of that is just added cost that is not going to research and is not going to help patients. So absolutely. Harmonization, preemption, are high priorities. All right. I appreciate that. Madam chair, i look forward to continuing to work with you to focus on patients. And we have a long track record of working together in a bipartisan way on this committee. I think as long as we continue to focus on the patients and use common sense, i think we can get there. So with that, ill yield back. The gentleman yields back. And now the gentlewoman from california, ms. Baragan, is recognized for five minutes for her questioning. Thank you. I want to followup on that. You know, were here in congress drafting legislation and debating what to do, we have seen states taking up legislation that shines light on manufactur manufacturers drug pricing. Part of that is attributed to the fact that congress isnt moving and isnt doing anything, that states are acting to help consumers and to help people who are rationing their drugs. In my own state of california, they passed a drug transparency law in 2017. It requires Drug Companies to notify Health Insurers and government plans at least 60 days in advance if they plan to increase a drug price by more than 16 in a 2year period. The law also requires the companies to explain the reason behind the increase in price with all of the information provided to the state made public online for citizens to review. Now, pharma sued to block the California Law. This may be because the law was effective in shining a light on upcoming price increases. For example, it showed that valiant was going to raise the price of a generic medication by 63 and tiva pharmaceuticals planned a 49 price increase for an inhaled solution to prevent asthma attacks. Ms. Joldersma, you testified that pharma supports transparency. In this case pharma sued to block this California Law that would have transparency. Did pharma sue to block the California Law because youre concerned about the unfair drug pricing policies of drug manufacturers . Yeah, we sued to block the California Law because we believe it is unconstitutional in at least two ways. Dormant comers clause and also First Amendment compelled speech. And were also concerned about the impact that that 60day advanced notification, it could have on the market given the opportunity it creates for bulk purchasing. Okay. Let me ask you another question. So if Congress Passed that same law, you would have the same concerns, is that correct . Well, the federal government, obviously, has different authority im just asking if Congress Passed the law would you have the same concerns . First amendment compelled speech remains im just going to take that as a yes. I have other questions i want to get to. Yes. Thank you very much. During the drug supply hearing a week ago amgen raised the issue of lowering the list price of their cholesterol drug by 60 . However, pbms have not shifted this drug from highcost formulary tiers to lower cost tiers which carry lower copayments. Ms. Bass, you testified that the mission of the association you represent, the pgms, is to help control cost. So do you support patients having access to these lower price drugs . It seems that when you have a specific instance like in this one, were not seeing the movement. So i testified that the mission of our companies is to provide access to lower cost drugs. I cant speak to specific Company Decisions with respect to these drugs, but our companies negotiate to the lowest net costs and namake the decisions accordingly. Okay. Well, thank you. Mr. Asasi, im dead focused on trying to find Meaningful Solutions to the drug pricing problem. My constituents continue to demand that we find a way to significantly lower the price of medications. In your testimony, you discuss t that while youre supportive of transparency bills, that transparency legislation, alone, will not affect the price of Prescription Drugs. You go on to state that Medicare Part d negotiations should be enacted as a step to lower prices. While you discuss one specific negotiation bill in your testimony, i would like you to focus on the policy generally. Do you have any projections on the impact on drug pricing if we enact Medicare Part d negotiation, and then beyond medicare negotiation, what other policies should Congress Pass to lower prices . Sure. Thank you very much for the question. So this question of the projected savings is very difficult. In large part because industrys done a very good job availing what the actual price is that were paying, how the moneys are flowing, and so its a very, very difficult thing to model. What we know for sure is in order for it to work, something as simple as saying the government can negotiate wont work. We need to have a serious way to put teeth in negotiations. Theres lots of policies. One of them would be Something Like allowing others to produce a drug if the pharmaceutical industry isnt willing to negotiate a fair price. Another one is imposing a tax on excess profits, things like that. Theres a lot of different you have to have real teeth in negotiations or it wont work. What we do know is just common sense. As i mentioned earlier, the pharmaceutical industry starts in the u. S. When they launch prices most often. Because they know we dont negotiate. So they get a very, very high price in the United States, go around the rest of the world and start negotiating. So, for example, we know that we spend maybe 50 or 100 times more than other countries on drugs. Not all drugs but many drugs. For example n n, in norway, hum is almost twice as much as what were waying. Crestor is four times more in australia and france. Negotiation results in a fourfold decrease in price. Then the other thing we know is th that, as i mentioned, that manufacturers start in the u. S. The last thing, theres three really important policies to think about beyond negotiation. The first is to think carefully about the increase in price year over year. We heard industry has had a really hard time because so many drugs go to generic so they increase prices far above inflation year over year. The idea of thinking about how it should be tied to inflation is very important. Two, as dr. Miller mentioned, we need to understand the value of the benefit. Interrupt because its over the time, but theres also a 1 30 classified briefing for all members of the house. And i think that its important that everyone be able to get there. So the gentlewoman yields back and i now would like to recognize the gentleman from georgia, mr. Carter. Thank you, madam chair. Thank you for having this hearing. This is extremely important. Thank you, each and every one of you, for being here. Dr. Feldman, earl krier you had conversation about list price. And my colleague before me just mentioned about list price. We were talking about it. Ms. Bass, you mentioned your concern was net price. Let me ask you, a copayment to a patient, is it based on list price or net price . Copayments are a set price. Copayments are a set price. It could be a percentage. Is that is that percentage based on the list price or the net price . Coinsurance is typically based it depends on the plan, but in medicare, say, coinsurance is based on the list price. The list price. If the list price is higher, then the copay to the patient could be higher. Yes. That math works. Good. Thats new math but it still works, great. Let me ask you, in Medicare Part d, also patients go from deductible to the doughnut hole then into the catastrophic. Is that based on list price or is that based on net price . Its based on list price. So the higher the list price, the quicker they get into the doughnut hole, the quicker they get into catastrophic. If they get into catastrophic, then the taxpayer is the one on the hook because theyre playing the majority for it, not the plan sponsor, not the Insurance Company, correct . Thats correct. Let me ask you, dr. Feldman, you mentioned correctly that when ms. Bass was asked about how members how many pbms there were in the nation, there were 66, believe, you said. However, you mentioned there are three pbms that control 80 of the market and that is correct. Not only that, but also those pbms are also those three pbms that control 080 of the market have an Insurance Company they own and also have pharmacies they own. In fact, the vertical integration carries over into that. You mentioned you had some patients who came in and had a letter that said that they had to change a particular drug to Something Else that was on the fo formulary. Just out of curiosity, any of those the insurance or the pharmacy is owned by that pbm or would you know that . This was a particular pbm that is now owned by an Insurance Company. Exactly. So in other words, the pbm is directing that patient to use a drug on the formulary. There their mailorder pharmacy or through their pharmacy. It may not be a mailorder because we know aetna owns caremart, owns cvs. We know expressscripts on cigna owns extressscri trespressexpr. What were essentially talking about here is taking money out of one pocket and putting it in the other pocket. Because if you ask the pbms where are these discounts as the chairlady likes to say or repates going, they say, well, theyre going to the plan sponsor to decrease the premium. Well, whos setting that premium . The Insurance Company that they own in many cases. That vertical integration is something thats very concerning. Let me change gears here for just a second and ask dr. Miller and earlier ms. Joldersma was asked about one of the parts of this bill that says that Drug Companies would have to give notification before they went up on a price and there was concern about stockpiling. Are you familiar with spread pricing and how that works, either one of you . Yes. Okay. And do you agree in her assessment that, you know, if we know that if a pharmacy or a wholesaler knows that a price is going to be up that theres a possibility they would stockpile those drugs in order to buy them in a lower cost and then also to be able to keep them so that they can sell them at the higher price . My own comments are that, and i just want to preface by saying i still dont think that the transparency has a huge effect, but did i ask you that . What i asked you about was to the question that youre asking thank you very much. I think i would say i would not do a prior notice. You would not do a prior notice. For the reasons youre raising. Thank you. Id be concerned about that as well. Absolutely. I can tell you from firsthand experience and having been in business and owning a pharmacy for 30 years before i became a member of congress, that was something we did all the time. If we knew the price was going up, of course, were going to buy it at the lower price and stockpile it. So there is a danger there. I would warn you very carefully in this legislation to be careful of that. That is something that could happen. Madam chair, i want to thank you again for holding this hearing and also the prescription pricing for the people act that has the ftc and an investigation into potential anticompetitive Business Practices and the pbm pharmacy relationship, thats a relationship our committee asked the ftc to investigate. I hope, madam chair, that will come to us and well have access to that report so this committee can look at it. Thank you, madam chair, i yield back. Thank you. Gentleman yields back. Recognize the gentleman from maryland, mr. Sarbanes, for five minutes of questioning. Thank you. Thank you, madam chair. Thanks to the panel. Mr. Isasi, i assume youre familiar, generally, with how, for example, statelevel Insurance Commissioners regulate the premium hikes that Health Insurance Companies Bring on an annual basis, where they ask for information to justify those proposed increases. And then as well, we see the example of, say, electric electrical electric utilities sorry, i have a cold electric utilities who have to justify me ratiy any ra increases that they propose and provide a good deal of information. Do you have a sense of how the kind of information that we have available to us from the pharmaceutical companies or the pbms compares to the kind of information that is available to the public or to the commissions that operate in those other arenas that i mentioned . Its of much poorer quality because its not being collected to understand how the rates are being billed. Its just being collected. Yeah. And im increasingly intrigued by using that example as a kind of Reference Point for the kind of i signsight that we should b getting into the drug pricing because, frankly, i think if you look at the impact on the public of drug prices, its hard to argue that it isnt as extensive and permeating as those other things are. Where we bring a different kind of approach. I wanted to ask ms. I cant see your name all the way down there at the end. Lisa. Ms. Joldersma. Call me lisa. And ms. Bass. Talk to me a little bit about the excuse explanation for resisting some of the transparency measures that weve suggested based on the concern about proprietary information. Whats the argument there exactly . Ill start. So ill cite the office of the actuary and cbo as well in suggesting that if pricing becomes public, which is would under the secretarys rebate rule, prices go up, cbo, by about 15 . In other words, competitors are not willing to discount as deeply when they know the competiticom competiti competitions less deep discount. The costs float upward and probably would be about a 15 loss, in effect, of savings or 15 increase. Do you buy that, mr. Isasi, and if you do buy it, do you think the approach i was discussing a moment ago could be an antidote to the result that was just being described, i. E. , if that kind of Transparency Creates some pressures, as bass just suggested, then the counterpressure could be authority residing within some governmental entity to come in and push back on that. Maybe you could speak to that. Thats right. Thats the fundamental question. Is it just transparency or transparency with teeth . Its really important to note we need to have transparency with teeth. Have an ability for the government to come in and say and this is what, again, 80 of republicans, 90 of democrats are asking for, right . The government to come in and say, thats not in fair price, we will not pay it. You have to combine both things together. Yeah. Im for transparency with teeth just for the record and mr. Dr. Holtzeagan was for transparency with teeth. He did wonder or observe the transparency loan might not observe the goals we speak. I share some of that as misgivings. I think transparency in combination with other measures we could take would get us to a place that we want to get to on behalf of americans who are paying too much for their drugs. With that, i yield back my time. Thank you. Gentleman yields back. Now id like to recognize the gentleman from montana, mr. Gianforte. Thank you, madam chair. Thank gryou for the panel for being with us today. I continue to hear from montanans about the cost of Prescription Drug medications and difficulties they face in trying to pay for their drug. During our first hearing on drug prices this congress, i spoke about a constituent in great falls where, whose lupus medication had increased by hundreds of dollars in recent years. The price increase put her and her family made them financially unstable. Unfortunately, her story is not uncommon. We need to find common sense solutions. I look forward to finding those with my colleagues across the aisle to make drugs less expensive, increase transparency where its needed and put patients first. Although i appreciate the fair act and understand what its trying to accomplish, as a businessown e when i look at the list of reporting requirements in the bill, i do have some concerns. It seems that there are requirements that manufacturers might not be able to provide answers for. Can you speak to the challenges of gathering the required information regarding research and development and manufacturing costs . Well, certainly i think the reporting requirements are extraordinarily extensive. Ive never seen anything like it. And if you started today and had to go back, you might not have the records in place to do it, especially the smaller firms. Going forward youd have to put in place the sort of mechanisms to collect that on a regular basis. So do you believe based on the complexity that it might be the situation that certain firms would not be able to comply with these new rules . I would suspect that at the outset, yes. Okay. Im also concerned the act gives the secretary to include other information the secretary considers appropriate. Typically, i would say im all in favor of flexibility for the secretary but the list of regulations in the bill is already incredibly robust. To me, it seems that if something was left out or needs to be added, it should be done electi ele legislatively as opposed to through the secretary. I want to follow on, dr. Holtzeakin. Speak briefly about the estimated costs to consumers of these regulations. I dont have an estimate of the cost. I just want to echo something you just said. You can imagine putting in place systems to collect the data because you want to comply with the law assuming it was passed then the secretary changes the nature of the information you have to provide. You now are back at the starting situation where you havent clee collected, you have to go back. It could get progressively more costly if that is how it transpired. Okay. So if you cant comment specifically on cost, if all these new reporting requirements were signed into law and the secretary decided there was more information that he needed, how do you think that would affect new drugs coming to market . I think theyd be more costly to provide and be more expensive. Okay. Which is not the objective were shooting for. Yes. Question, if i could, for the whole panel. I support transparency across health care. I think that consumers need to know exactly what theyre paying for. Its my understanding that the rationale behind these bills is that the federal government is a large payer in the system today. Therefore, we need to know about price increases. That makes sense. I support the idea of flagging large increases in price. But looking at the whole picture, pharmaceutical spending account for less than 20 of what the government spends on health care. Are there other aspents of health care in the 80 that need to report price or fee increases as well to the federal government . For example, do hospitals have to report increases in surgical suppliy ies or procedures that medicare is going to cover . One thing to keep in mind is hospitals on the medicare side do report a cost report. And they do kind of lay out what their cost structures are. However, you have a very similar situation in the hospital industry where you have high degrees of consolidation and high prices escalating. So theres certainly a question that could be brought to bear there. Okay. From the physicians point of view, we are told every year how much were paid so that information is already out there. So youre so we should be arguing for we should be working for transparency in all areas. Is that anybody else would like to add anybody . We strongly agree with that. The problem with price in health care is motnot just a pharmaceutical issue but a big pharmaceutical issue. Our constituents expect us to look at all of Health Care Costs certainly drugs. Thats the topic today. More broadly. Comment comments . I would like to follow up quickly on something that representative sarbanes raised. He did mention the ray review framework put into place for Health Insurers and the fact they have to give advanced notice of increases. Unfortunately, my time is up and i yield back, madam chair. Its only one year. The gentleman yields back. I now would like to recognize the gentleman from kentucky. The patient mr. Guthrie. Thank you very much. Sorry, i was in another hearing on a committee that im the Ranking Member subcommittee so i wasnt here for a lot of discussions. Ill just ask a couple of questions and hopefully i know were pushing against a deadline here. For dr. Feldman and dr. Holtzeakin, medpac recommended the information regarding samples be shared with specific other entities. How might this information be helpful to oversight agencies, researchers, payers, and health plans, and how is selectiveelec sharing this information different from publicly posting it . Public posting it leaves it open to anyone with any opinion to, you know, create a campaign on twitter and various social media, which can lead to really false impressions of what the samples really do accomplish for patients. Okay. I think thats the chief concern, and professional analysis of the data should be welcomed. Okay. Thank you. And everybody here wants transparetran transparency and lower drug prices. We have to get this right. So if youre looking at the spike in the fair act, the spike in the afair act used different definitions for manufacturer. The fair act uses the proper food and drug food, drug, and cosmetic act deaf visi definiti definition, the spike act uses one thats improper. Drafting concerns has been raised while the intent was to provide discretion to the manufacturer on which materials would justify the spike disclosure, the language is not clear or prohibitive that the secretary cannot reject a justification or ask for additional disclosures from the manufacturer. Do you agree this san issue, and if we pursue this bill, the language needs to be clarified . I do. What are the issues that would happen if you didnt clarify . Im sorry . The issues if it wasnt clarified then it would if it wasnt clarified i think that given the certification requirement in that bill, i think manufacturers would believe they have to provide every single thing listed as illustrative in the bill, regardless of whether it was applicable to the actual increase or not. So as the as our colleague here, defined manufacturing of the fair act, is the better route . They both have issues wed like to work with the committee on. Okay. Thats fair. One final question, dr. Holtzeakin, you note in your testimony theres elements of transparency that can have inverse market impacts. Can you explain this issue more and how congress can ensure helpful transparency is done while not driving unwanted behavior . You simply dont want to disclose the outcome of other peoples negotiations so that competitors can take advantage of it. So that kind of transparency is actually counterproductive. An example of that . Well, if, for example, you know, mark cut a deal on a big rebate for his drug and i found out about it, id be, like, well, geez, i didnt get that rebate and that would lead that negotiation have less vigor the next time around. Might not give such a big rebate. Thank you. I appreciate that. And i will yield back. Gentleman yields back. And the i recognize the gentlewoman from illinois whos the sponsor of the fair drug pricing act, for five minutes, and i think because ms. Schakowsky is waved on to the subcommittee, shell be the last member whos questioning, so hold on, temp estifiers, youret about through. I thank the chairman for allowing me to do this. Obviously, quick as possible. This is what people with multiple sclerosis are facing, for example, showing the kr ini increases over three years in the cost of their drugs. 62,000 to 92,000 in those 3 months. Avanex went from 62,000 to 88,000 in these 2 months. In those three years. Ais im sorry. I also just you know, the whining thats going on about having to talk about some transparency is really irritating to me. You know, the Drug Companies tell us all the time that its about research and development. It costs so much. How much . Thats the question in the fair act which is my bill. How much . If youre going to use that as the excuse for raising the prices, then i think we have an absolute right to know how much is being spent. The ten top drugs that are advertised on television, and were going to see because of the cooperation with the president of the United States, those list prices next to the drug on television, the ten top ones every month is either between 500 per drug up to 17,000 per drug. Per month. And so we want to know, how much are you really spending on marketing and advertising . Believe me, these are not extraneous questions. These are what Consumers Want to know. They want to know the manufacturing costs. They want to know how much money are you making . I cant afford your medication, they say, and so im going to get sick and so i want to know, how much are you making off of me when i can actually pay for this . So really, the idea that transparency is going to cause all these problems and problems for consumers, i wonder if my my friend, mr. Isasi, whatever, could answer that. Isasi. Isasi. No problem. Isasi. No isis. No, not isis. Isasi. Id say we share your skepticism about this concern, very much share this skepticism. Its the very least, as you say, when peoples lives are hanging in the balance and making decisions that in some cases enend up in death because they cant afford the drugs. I want to point out the makers of the top 12 bestselling drugs in the United States filed on average 125 patents per drug. For an entry filing 125 patents per drug, seems like transparency about how theyre spending their money isnt much of a burden. I really appreciate that. We do have to go to a classified briefing. I want to say, at the very least, consumers deserve transparen transparency. I also want to agree with you, it has to be with teeth. Were going to do more than this. Getting transparency. Were going to have to lower the cost of Prescription Drugs. We people are dying. They cant afford it. So this is just the beginning. Thank you very smucmuch and i y back. The gentlewoman yields back. Pursuant to committee rules, members have ten Business Days to submit additional questions for the record to be answered by the witnesses who have appeared and i ask each witness to respond as promptly and as fully. The questions that you receive, i ask unanimous consent to enter to the record the following documents. Letter from the American Society of clinical on come regarding h hr2296, 2087 and 2064. Let frer tter from the campaign sustainable prescription pricing in support of 2296, 2069, 2087, 2064, 2757. Letter from aarp in support of 2296, 2069, 2087, 2115, and 2064. Letter from the National Multiple Sclerosis society and a let frter from the alliance of specialty medicine regarding hr2113. Without there arent any objections, so without objection, please documents will be placed into the record. I want to thank all the witnesses once again. Youve been here for three hours. Youve worked hard and i think that the hearing has been more than worthwhile recognizing that we have a great deal to do. I also think that we need to really scrub your written testimony because many of you really put forward worthwhile ideas that we didnt get to ask questions and they are worthwhile and deserve full attention of committee members. So with that, the Health Subcommittee will now adjourn. There you go. Tonight here on cspan3, a look back at the world war ii dday invasion. Hear from historian alex kershaw about his book the first wave. We talk with him at the National Dday memorial in bedford, virginia. Heres a portion of what youll see tonight at 8 00 eastern. This one community here, bedford, virginia, gave more lives, sacrificed more than anyone else in america. On dday, june 6th, 1944, 19 guys from chthis community of 3,000 1944 died in the first wave on omaha beach. So per capita, bedford, virginia, gave more than any other allied community on dday and why the National Dday memorial is here and im very happy to be sitting right in front of it. Its interesting, identify always heard that bedford gave more than any other american town, but you said more than any other allied community. Yes, thats what the National Dday memorial proclaim and thats true, yeah. Actually on dday, company a from the 116th infantry regiment, a National Guard unit, guys from the National Community joined the National Guard in the 1930s. They were weekend warriors. They never envisioned in 193738 that by 1944 th 4 theyd be in the very first wave and most critical assault in u. S. History. Out of company a, 180 guys landed on omaha beach and 102 of them we believe consider killed in about half an hour. Of the 102, 19 were killed from bedford, virginia, but there were 13 guys still in company a on dday from this community here who fought on june the 6th, 19 1944. Your book focuses on the individual stories, personal stories, of the first waves of soldiers, airmen and marines and write early in the book, it was 12 15 a. M. , june 6th, 1944, the most important day of the 20th century. The First Americans had arrived in france. Why do you think dday was the most important day of the 20th century . Because it led to a europe you see today. Led to the restoration of civilization, human rights of democracy, of peace, in western europe. It was the foundation of atlantasism. Thats been the most important relationship in modern world history. And it led to the freedom of millions and millions of europeans in western europe. 19 million civilians died in europe in world war ii, when americans and british and french and canadians landed on dday, june the 6th, 1944, it gave countless americans hope that barbarism and the rule of naziism, that that terrible, terrible genocide and oppression would finally end. And you can watch the entire conversation with historian a