On June 13, 2017, the Senate Health, Education, Labor, & Pensions (HELP) Committee held a hearing to discuss the cost of prescription drugs, in particular how the drug delivery system affects what patients pay. The hearing was held after a request from a bipartisan group of senators led by Senators Al Franken (D-MN) and Bill Cassidy (R-LA). A number of Senators on the HELP Committee, including Senators Franken, Cassidy, Bernie Sanders (I-VT), and Elizabeth Warren (D-MA), have been very vocal about prescription drug pricing and have proposed related legislation for policies such as drug importation.

The hearing featured four expert witnesses:

• Gerard Anderson, Ph.D.- Professor of Medicine, Johns Hopkins University School of Medicine
• Allan Coukell- Senior Director of Health Program, Pew Charitable Trusts
• Paul Howard, Ph.D.- Senior Fellow and Director of Health Policy, Manhattan Institute
• Dan Mendelson- President, Avalere Health

Given the general nature of the hearing’s topic, “The Cost of Prescription Drugs: How the Drug Delivery System Affects What Patients Pay”, no specific policy or piece of legislation engulfed the conversation. Instead, senators focused on a broad range of topics that were often important to their constituents or were areas where they had previously expressed interest. Senator Cassidy asked about the role of rebates and questioned why companies did not just have net prices that reflected those rebates. Meanwhile, Senator Susan Collins (R-ME) discussed the difficulties that some organizations face when trying to obtain generic drugs in order to conduct bioequivalence studies.

Some Senators specifically mentioned prescription drugs in Medicaid. Senator Bob Casey (D-PA) expressed concern that any changes to Medicaid would allow federal officials to “wash their hands” of the issue on how state Medicaid agencies deal with drugs, particularly higher-priced drugs like hepatitis C treatments like Sovaldi. Senator Warren stated that of all the government health programs, including Medicare and TRICARE, Medicaid is the “best deal” for prescriptions.

In addition, the role of research and development costs was discussed in questions from a few members of the committee. Both Senator Franken and Senator Maggie Hassan (D-NH) highlighted an academic article or government report which stated that the cost of research and development and the price a company sets for their drugs are unrelated. When Senator Hassan asked whether drug manufacturers spend more on research and development or marketing, Dr. Anderson stated that more is spent on marketing and there is no typical relationship between the marketing and research costs of a drug.

The hearing also featured heavy partisan sentiment. Each of the 10 Democrat in attendance (of the total 11 Democrats that site on the Committee), took time at the beginning of their allotted time to comment on Republican efforts to repeal and replace the Affordable Care Act (ACA). Many criticized the American Health Care Act (AHCA) passed by the House of Representatives and the group of 13 Senators that majority leader Mitch McConnell (R-KY) assembled to write the Senate version. In particular, multiple Senators stated their concern and disappointment that no hearings, roundtables, or other discussions were being held about the bill being worked on by their Republican colleagues.

Chairman Lamar Alexander (R-TN) noted that this hearing would be the first of three held by the Senate HELP committee that would focus on drug pricing. The second hearing slated for later this summer will focus on the drug development process and the third hearing, which will occur in the fall, will focus on work being done at the National Academy of Sciences about ensuring patient access to affordable drug therapies.

The full video of the hearing and the complete written statements of all four witnesses are available here.