Senator Collins Questions Experts on Ways to Reduce Prescription Drug Costs

Click HERE to watch Senator Collins’ Q&A with hearing witnesses

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Washington, D.C. - Today, the Senate Health Committee held the final hearing in a three-part series on reducing the cost of prescription drugs. The hearing focused on the recently released report from the National Academy of Sciences, Engineering, and Medicine on the rising costs of prescription drugs titled, “Making Medicines Affordable: A National Imperative.”  The committee examined the recommendations of the report and listened to testimony from experts on how best to reduce the cost of prescription drugs for consumers while preserving access and innovation.

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 funding for opioid abuse prevention and treatment as well as medical research.

During the hearing, Senator Collins referenced a report broadcast in October 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.

“NBC did a piece that showed that a consumer who had a co-pay of $43 for a cholesterol drug would have only payed $19 if that consumer had paid out-of-pocket,” said Senator Collins. “What would you think of having the federal government ban this practice of gag clauses as a condition of participation in the Medicare or Medicaid programs?”

In response, Norm Augustine, the Chair of the Committee on Ensuring Patient Access to Affordable Drug Therapies, said, “Our committee addressed the broad issue that you raised, and it’s our belief that the way to resolve that is dealing with a larger issue: the lack of transparency. The fact is that people don’t know what is in the agreements that are made between, for example, the drug companies and those in the supply chain, so most people will never even know that a gag clause is there today.”

Senator Collins also criticized the “patent thicket” strategy, where some drug companies obtain numerous overlapping patents to stave off competition.

“For example, in the case of Humira… AbbVie has obtained more than 100 patents that have blocked competitors from coming to the market,” said Senator Collins. “How can we counter the strategy of a manufacturer attempting to extend the patent, in this case, to almost twice what it should have been?”

Dr. Douglas Holtz-Eakin, President of American Action Forum, echoed Senator Collins’ concerns regarding the patent thicket strategy and suggested that one solution would be to get “better value-based pricing,” which seeks to set prices based on a prescription drug’s ability to enhance lifespans and the quality of life.  According to Dr. Holtz-Eakin, this would avoid increasing the value of the me-too patent by ensuring companies could not charge any more money for it.

“There are circumstances that I’ve seen recently that appear to be just sheer abuse of monopoly power.  That should be referred to the anti-trust authorities and should be prosecuted,” Dr. Holtz-Eakin continued.

“I completely agree with you that this monopoly is being used to protect profits rather than patients and R & D, the development of new drugs,” Senator Collins responded.  “I think it is something we need to take a look at.”

As Chairman of the Senate Aging Committee, last year Senator Collins led a bipartisan investigation into the causes, impacts, and potential solutions to egregious price spikes for certain generic, off-patent drugs.  Following her investigation, a bill that Senator Collins authored to improve generic competition and lower the cost of prescription drugs was signed into law as part of the FDA Reauthorization Act.

Witnesses testifying at today’s Health Committee hearing included:

• Norm Augustine, Chair of Committee on Ensuring Patient Access to Affordable Drug Therapies, National Academies of Sciences, Engineering and Medicine
• David Mitchell, President and Founder, Patients for Affordable Drugs
• Doug Holtz-Eakin, President, American Action Forum

Click HERE to read their testimonies.