House E&C Panel Republicans Push Back on Drug Transparency Bills

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The House Energy and Commerce Health Subcommittee held a hearing on improving drug pricing transparency and lowering prices for consumers. Chairwoman Anna Eshoo (D-CA) noted that the intent of the current hearing was to “unmask the secrets” about how drugs are priced, and to ensure that drugs prices are affordable.

The hearing was directed to the following seven bills, each of which is intended to reform the drug supply chain, as well as to impose accountability and implement enforcement mechanisms.

The Prescription Drug STAR Act bills: As we previously reported, the House Ways & Means Committee unanimously passed the Prescription Drug STAR Act, which is intended to increase transparency and public reporting of information in the prescription drug market. The STAR Act encompasses four individual bills – Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act (H.R. 2069), Drug Price Transparency Act (H.R. 2087), Public Disclosure of Drug Discounts Act (H.R. 2115), and Sunshine for Samples Act (H.R. 2064). Specific initiatives include requiring manufacturers to justify large price increases and high launch prices, to report the monetary value and quantity of samples, and to submit information on the average sales prices of physician-administered drugs under Medicare Part B. The STAR Act also requires the HHS Secretary to conduct a study on inpatient drug costs, and to disclose rebates, discounts and price concessions achieved by pharmaceutical benefit managers (“PBMs”).

The Fair Accountability and Innovative Research (FAIR) Drug Pricing Act (H.R. 2296), which requires certain drug manufacturers to alert the Department of Health and Human Services (“HHS”) 30 days prior to increasing the price of a drug, as well as to justify the price increase, and to report research & development and manufacturing expenditures, and total revenue and net profit generated by the drug. HHS would publish this information, unless it is considered a trade secret and confidential.

The Prescription Pricing for the People Act (H.R. 2376), which would require the Federal Trade Commission to conduct a study on competition in the drug supply chain, particularly as to whether PBMs have engaged in anti-competitive practices, and develop policy recommendations to improve transparency and competition in the supply chain.

The Creating Lower Cost Alternatives for Your Prescription Drugs Act (H.R. 2757), which would eliminate copayments for generic drugs for Medicare Part D beneficiaries who receive low-income subsidies.

While the Prescription Drug STAR Act was unanimously passed by the Ways & Means Committee, some Energy & Commerce Health Subcommittee Republicans pushed back on the initiatives. Rep. Michael Burgess, M.D. (R-TX) voiced concern about possible unintended consequences, and noted that Congress must strike a balance with policies to ensure that they do not “dampen the success or deter future investment in biomedical research or innovation.” Greg Walden (R-OR) discussed similar concerns about the drug development market being “sustainable.”

The Health Subcommittee also heard testimony from representatives of several stakeholders in the drug supply chain, including pharmaceutical manufacturers, PBMs, physicians, patients and health policy experts. Some stakeholders agreed with the Republicans’ concerns, and argued that the bills would not likely impact drug prices. Other witnesses were concerned that the product sample reporting requirements could discourage the provision of samples, which would ultimately harm patients.

While it is still early in the legislative process, it is clear from the number of bills generated and the attention those bills are getting, that Congress is motivated to address the rising cost of drugs and improve affordability for patients.

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