Senator Collins Questions FDA Commissioner about High Cost of Prescription Drugs, ‘Broken’ Rebate System

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Washington, D.C. – At a recent Senate hearing, U.S. Senator Susan Collins questioned FDA Commissioner Dr. Scott Gottlieb about the skyrocketing costs of prescription drugs and whether patients benefit from pharmaceutical rebating practices. 

“I recently was at a pharmacy in Maine, and the couple who was in front of me in line, when they saw that their co-pay was going to be $111, just turned around and left.  The pharmacist, in response to my inquiry, told me this happens every day.  That's so troubling to me,” said Senator Collins. 

“On its face, the idea of rebates that are paid by prescription drug manufacturers sounds like a good thing.  Pharmacy benefit managers negotiate drug prices with manufacturers and then provide rebates to insurers, which ought to bring down premiums for everyone,” Senator Collins told FDA Commissioner Gottlieb.  “In practice, however, this means that those who are least able to pay are ironically subsidizing the costs for others.  Something seems broken here.  How would you suggest that we rectify the rebate problem to bring down costs for patients?”

Commissioner Gottlieb agreed with Senator Collins’ “spot-on” analysis and offered several solutions that the Department is currently researching.

We can “try to require more of the rebates to be paid to the patient at the point of care… [or] make it harder for intermediaries to be paid on the list price versus the net price, and that would discourage rebating because you'd compress the spread between list and net,” replied Commissioner Gottlieb. 

Earlier this year, Senators Collins (R-ME), Claire McCaskill (D-MO), and Debbie Stabenow (D-MI) led a bipartisan group of Senators in introducing a pair of bills to remove barriers that prevent patients from paying the lowest possible price for prescription drugs.  The Patient Right to Know Drug Prices Act and the Know the Lowest Price Act would prohibit health insurers and pharmacy benefit managers from using “pharmacy gag clauses” – an egregious practice that some companies use to conceal prices from patients at the pharmacy.  This causes many consumers to needlessly overpay for their prescriptions.