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U.S. Senate Hearing Examines Administration’s Blueprint to Lower Prescription Drug Prices

June 13, 2018

In the face of the rising prices of prescription drugs placing an increasing financial burden on patients and hospitals, U.S. Health and Human Services Secretary Alex Azar testified before the U.S. Senate on steps the Administration is taking to address drug prices.

The U.S. Senate Health, Education, Labor and Pensions (HELP) Committee hearing—The Cost of Prescription Drugs: Examining the President’s Blueprint ‘American Patients First’ to Lower Drug Prices—was the fourth in a series of hearings reviewing the price of prescription drugs.

Last month, President Trump announced the release of a blueprint to lower drug prices, identifying immediate actions and opportunities within federal payment programs.

In testimony before the HELP Committee, Secretary Azar identified four strategies in tackling high drug prices and spoke to actions the Administration will take to:

  • Create the right incentives for list prices
  • Encourage better negotiation for drugs within Medicare
  • Promote a more competitive pharmaceutical marketplace
  • Bring down out-of-pocket costs for American patients

Pennsylvania hospitals and health systems are supportive of many of the policy avenues under consideration including:

  • Greater attention within the Food & Drug Administration (FDA) to approving generics
  • Greater oversight of anti-competitive behavior
  • Increased transparency around pricing in direct-to-consumer advertisements
  • Support from the Centers for Medicare & Medicaid Services (CMS) in developing value-based purchasing models for drugs

Secretary Azar specifically noted:

  • HHS is working to require drug companies to disclose their list price on television commercials
  • CMS has reminded Medicare Part D plans of its existing policy which requires plan sponsors to ensure enrollees pay the lesser of the Part D negotiated price or copay
  • FDA recently began publicly identifying companies that are engaged in activities that block competition

He also cited support for giving Medicare Part D prescription drug plans market-based tools to negotiate better deals with drug companies and is considering bringing physician-administered drugs—covered under Medicare Part B—into the Medicare Part D program.

The FDA also issued updates to guidance yesterday that provides clarity regarding how drug companies can provide economic and clinical outcome information to drug purchasers—including health plans and hospitals. FDA Commissioner Scott Gottlieb indicated this information sharing will allow payers to more accurately align the price of drugs to its effectiveness.

Pennsylvania hospitals will continue to work with federal policymakers on common-sense policies that will address the price of drugs and the resulting pressure placed on hospital and patient budgets. Additionally, HAP continues to advocate to preserve the 340B Drug Pricing Program as a crucial tool for hospitals to stretch scarce resources to better serve vulnerable patients and communities across the commonwealth.

Please contact Laura Stevens Kent, HAPs vice president, federal advocacy, or Jolene Calla, Esquire, HAPs vice president, health care finance and insurance, with questions regarding federal policy work on drug prices.

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