Senator Collins Questions Experts on Ways to Lower Prescription Drug Costs
Click HERE to watch Senator Collins’ Q&A with hearing witnesses
Note to assignment editors and news directors: Click HERE for high-quality video of Senator Collins’ Q&A with hearing witnesses
Washington, D.C. - Today, the Senate Health Committee held the second hearing in a series on reducing the cost of prescription drugs. The hearing examined the facts about drug spending, the actual consumer costs, and inefficiencies that can be eliminated to lower costs for patients while continuing development of innovative new cures and treatments. U.S. Senator Susan Collins, a member of the Senate Health Committee and the Chairman of the Senate Aging Committee, has championed bipartisan efforts in Congress to increase the affordability and accessibility of prescription drugs.
During the hearing, Senator Collins referenced a report broadcast last night by NBC “Nightly News,” which revealed that some contracts between pharmacy benefit managers and pharmacies prohibit pharmacists from telling consumers if their prescription would cost less if they paid for it out of pocket rather than using their insurance.
“Last night, NBC ‘Nightly News’ ran a story about an investigation which found that a wide variety of prescription drugs on certain insurance plans are actually cheaper when the consumer pays out of pocket,” said Senator Collins. “How common is this practice and how can this occur? How can it occur that a prescription benefit manager, whose very job is to negotiate prices, is negotiating a price that's actually higher than the consumer would pay out of pocket?
“To answer your question, it's not something that should be going on in the marketplace,” responded Mark Merritt, the President and Chief Executive Officer of the Pharmaceutical Care Management Association. “It is an outlier behavior…it’s not something that we support…If it's a generic that costs $5 and it’s a $20 co-pay, [the consumer] should pay $5.”
Thomas Menighan, the Executive Director and Chief Executive Officer of the American Pharmacists Association, echoed Mr. Merritt’s comments, stating, “Pharmacists are incredibly frustrated with their inability to help patients. Providing patient care shouldn't be this difficult. My members feel incredibly frustrated with their lack of connectivity—their lack of communication—with plans. Essentially, they have no negotiating power, and they are sort of told what they have to do, and if they can take it or leave it…[I]t’s not an outlier; it’s common.”
Senator Collins also criticized the lack of price transparency, which contributes to the high cost of prescription drugs.
“One of the issues that really troubles me is the lack of transparency in the system. The [Maximum Allowable Cost] price is not what most people pay,” said Senator Collins. “Prices vary depending on what pharmaceutical benefit manager negotiated. Prices vary according to, obviously, whether a generic can be substituted. There's just a lack of transparency in the entire system.”
In November 2015, Senators Collins and Claire McCaskill (D-MO), the Chairman and former Ranking Member of the Senate Aging Committee, launched the first-ever bipartisan investigation into the causes, impacts, and potential solutions to egregious price spikes for certain generic, off-patent drugs. Following their investigation, Senators Collins and McCaskill introduced legislation to improve generic competition and lower the cost of prescription drugs. This bill was signed into law in August as part of the FDA Reauthorization Act.
Lori Reilly, the Executive Vice President of Policy, Research & Mentorship at PhRMA, thanked the Senator for her work to reduce drug prices. She also expressed support for increasing price transparency.
“If we're going to have a discussion on transparency, which we would welcome, we think it is important to have one that holistically involves entire supply chain,” said Ms. Reilly. “[T]here are costs, as I mentioned before, in the hospital sector alone where they are increasing their reimbursement two and a half times over what they acquire a pharmaceutical product for. We definitely need to have more transparency into areas like that.”
Witnesses testifying at today’s hearing included:
• Lori M. Reilly, Esq., Executive Vice President, Policy, Research & Mentorship, PhRMA
• Chip Davis, Jr., President and Chief Executive Officer, Association for Accessible Medicines
• Elizabeth A. Gallenagh, Esq.,Senior Vice President Government Affairs and General Counsel, Healthcare Distribution Alliance
• Mark Merritt, President and Chief Executive Officer, Pharmaceutical Care Management Association (PCMA)
• Thomas E. Menighan, BSPharm, MBA, ScD(Hon.), FAPhA, Executive Director and Chief Executive Officer, American Pharmacists Association
Click HERE to read their testimonies.
