House Ways & Means Subcommittee Issues Testimony From Families USA
"Chairman Doggett, Ranking Member Nunes, and Members of the House Ways and Means Subcommittee on Health - thank you for the opportunity to speak with you today. I am
The Experience of Consumers
"Unfortunately, while our country has made substantial progress in health care coverage over the last several decades, the incredibly high prices of prescription drugs have made it increasingly difficult for consumers to access life-saving care. It is unconscionable that in a country as great as ours, that almost three in ten (29 percent) of patients don't take their medicine as prescribed due to cost. It is unconscionable that approximately one in five forgo essential medications altogether because they can't afford to fill their prescription (19 percent), and more than one in ten, or 12 percent, of patients cut their pills in half or skip dosages to stretch the limited supply of drugs they can afford to buy.i These are the experiences of the "broad middle" of health care consumers -- those who are neither wealthy nor poor. For them, the high cost of prescription drugs can have life-threatening effects.
"For example, we recently heard from Tammy from
The Underlying Problem - Abuse of Patent and Market Exclusivity Laws
"We all know that the health care financing system is complicated, and prescription drug pricing doubly so.
"Yet, at its core, the fundamental problem driving up prescription drug prices is astonishingly simple: flagrant abuses of the federal patent and market exclusivity laws by pharmaceutical manufacturers.
"
"Drug makers and other actors have worked hard to complicate the picture. As we saw at the
"They blame pharmacy benefit managers (PBMs) for taking advantage of drug rebates, and pocketing most of the savings. They blame insurers for subjecting consumers to the costs of drugs through high deductibles. Each of those arguments has a nugget of truth, but manufacturers really are just deflecting attention from the root cause-- their unchecked abuses of patent and market exclusivity laws.
"For decades, drug makers have systematically abused patent and market exclusivity rules to quell product competition.ii For example, at last week's Senate Finance Committee Hearing, AbbVie received appropriate criticism for the wall of more than 100 abusive patents it has erected around its drug Humira, helping it to generate
"Drug makers try to appeal to
"When asked to defend prices on the merits, drug makers typically point to the need to invest in innovative, new drugs for the future, a canard. Clearly, most of us support the notion that drug companies should be incentivized to use their profits to drive innovations for new, lifesaving-drugs. If only that was the reality. Nine of the 10 largest pharmaceutical corporations spend more on marketing and sales, sometimes twice as much or more, than on research and development (R&D).vii The argument that R&D costs can explain higher prices in
"And, even when drug manufacturers do allocate a small percentage of their revenue toward bona fide innovations, all too often they focus their resources on drugs that don't address the most urgent needs of families and instead focus on niche drugs that yield the greatest profit.xi For example, experts agree that across the world there is an urgent need for new antibiotics to combat increasing drug-resistance, but major pharmaceutical corporations continue to step back from that life-saving research.xii
"Finally, think of the gifted women and men who are dedicating their lives to biomedical research both through our universities and in the pharmaceutical industries. These individuals represent some of the most talented scientific minds in our nation. Instead of ensuring federal law primarily rewards the innovations of these scientists, our federal laws are being leveraged to reward the manipulation of patent laws by pharmaceutical companies, as described above.
Medicare Drug Pricing Negotiation
"One option policy makers have considered to reduce drug costs is to allow Medicare to negotiate the price it pays for pharmaceuticals.
"
"We particularly like the competitive licensing approach because it provides a strong incentive for namebrand manufacturers to negotiate while protecting patients' access to drugs. We are open to alternative methods to bring pharma to the negotiating table, if those methods are mandatory and have real effect.
"Medicare negotiation would greatly help all Medicare beneficiaries. Beneficiaries like Catherine, a 63- year-old adult with disabilities from
"Catherine was eventually able to receive a new lung in
"Because lung transplants have a high risk of complications, Catherine must be constantly monitored by doctors. Catherine takes 36 pills every day, including anti-rejection and pain medications. Each year, her medication costs put her in the Medicare Part D coverage gap -- the doughnut hole. In fact, before each year ends, Catherine starts to ration her medications to make them last until her benefits are renewed at the beginning of the year. She spends
The American People Demand Real Change
"Our nation's families continue to struggle with ever increasing health care costs. Approximately 44 percent of the public report foregoing seeing a doctor when they need to because of cost, and about one-third of Americans report that the cost of medical care interferes with their basic needs such as food, housing, or heat.xiii
"This problem is only growing more acute. In last fall's midterm Congressional elections, the American people sent a strong signal to
Overcoming the Political Clout of Pharmaceutical Industry
"Representatives of the pharmaceutical industry have done an incredible job of defending the status quo despite ample evidence that drug prices are out of control. This comes as no surprise as the pharmaceutical industry is one of, if not the most, powerful lobby in
"It is no wonder
"There's literally a quarter billion dollars per year being spent to keep you and others from acting. I commend the subcommittee and the entire
* * *
Footnotes:
i Kirzinger, Ashley,
ii I-MAK. "Overpatented, Overpriced: How Excessive Pharmaceutical Patenting Is Extending Monopolies and Driving up Drug Prices."
iii Ibid.
iv Ibid
v Feldman, Robin. "May Your Drug Price Be Evergreen."
vi Galkina Cleary, Ekaterina,
vii Anderson, Richard. "
viii Yu, Nancy L.,
ix Government Accountability Office. "Drug Industry Profits, Research and Development Spending, and Merger and Acquisition Deals." Report to Congressional Requesters.
x
xi Bach, Peter B. "Could High Drug Prices Be Bad for Innovation?"
xii Paton, James, and
xiii NORC at the
xiv Jensen, Tom. "NEW EXIT POLL: Health Care Defined Midterm, Fueled Democrats' Win." Protect Our Care.
xv "Americans' Priorities for the
xvi "Lobbying Spending Database Health, 2018." OpenSecrets.org.
xvii "Lobbying Spending Database Pharmaceuticals/
xviii Ibid.
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