Top 5 Takeaways from the Health Subcommittee Hearing on Drug Pricing

We know that not everyone can spend three hours of their day watching Congressional hearings, so DPAC did in order to bring you the key takeaways. Here are our top 5, in no particular order:

1. Insulin was a hot topic – it came up early and relatively often, both by witnesses and legislators.

Lori Reilly, Executive Vice-President of Pharmaceutical Research and Manufacturers of America (PhRMA) referenced insulin in her written (and oral) statement

Due to the growing gap between list and net prices, patients’ cost sharing for medicines is increasingly based on prices that do not reflect plan sponsors’ actual costs. For example, market analysts report that negotiated discounts and rebates can lower the net price of insulin by up to 50% to 70%, yet health plans require patients with deductibles to pay the full undiscounted price. As a result, a patient in a high-deductible health plan who pays the list price each month for insulin maybe paying hundreds—or even thousands—more annually than their insurer.

As a hypothetical example, imagine a patient enrolled in a high-deductible health plan who takes an insulin with a list price of $400. The patient’s insurer has negotiated a 65% rebate, which substantially reduces the cost to the plan. However, because the patient has not yet met his deductible, his insurer does not provide any coverage for his prescription, and the patient’s bill reflects the insulin’s full cost of $400. Despite paying nothing for this patient’s insulin, the insurer still collects the rebate, earning over $200.39.

Matt Eyles, Senior Executive Vice President and Chief Operating Officer for Policy and Regulatory Affairs for America’s Health Insurance Plans shared what many people with diabetes already know:

Even for products that have been on the market for decades, sharp price increases are not uncommon. For example, one study shows that the price of insulin has increased more than 240 percent over the past decade – from $88.20 per vial in 2007 to $307.20 per vial today – despite 3 the fact that insulin has been widely available for the last 90 years. With no generic competition in the U.S., diabetes patients are limited to brand-name versions costing hundreds of dollars per vial.

2. Finger Pointing was popular and it was pointed out (sorry) by many of the legislators sitting in the hearing.

Mark Merritt, who is the President & CEO of the Pharmaceutical Care Management Association (PCMA) said pricing increases on medications are due of patent protection by pharmaceutical companies, and that’s why discounts and rebates are essential in the drug supply chain. As the head of the trade association for Pharmaceutical Benefit Managers (PBM), he represents the business interests of PBMs, not the patient’s interest. They have a lot of power because they buy for millions of Americans. You can read the association’s guiding principles here. (Spoiler alert: none of what they say in the guiding principles or policy solutions help people with diabetes.)

Lori Reilly, Executive Vice-President of Pharmaceutical Research and Manufacturers of America (PhRMA) said PBMs do contribute to list price increases. This directly contradicts what Mr. Merritt claims. 

3. Rebates and Discounts don’t directly reach the patient at the pharmacy counter.

David Mitchell, Founder and President of Patients for Affordable Drugs, said that it was not clear if rebates ever reach the patient.

Mr. Merritt said that those rebates and discounts do reach the patient through the payers (insurance companies) through reduced premiums and formulary pricing. There was strong disagreement and repeated questioning by a few legislators on this statement.

4. Transparency, transparency, transparency.

Everyone agrees it’s important. It was the buzzword of the day.  Rep. Schrader of Oregon asked whether PBMs can be more transparent without revealing proprietary information. Ms. DeGette of Colorado and Co-Chair of the Congressional Diabetes Caucus asks whether PHRMA, AHIP, and PCMA will reveal their contracts with distributing organizations for further transparency. The organizations’ responses ranged from “yes” to “our organization can’t reveal our contracts.”

 5. There will be more hearings on prescription drugs. 

While this hearing was not expected to conclude with an immediate fix of the healthcare system in the United States in relation to prescription drugs, many legislators expressed the need and desire for working groups and organizations to discuss solutions in order for Congress to make decisions.

Rep. Blackburn of Tennessee asked each of the witnesses:

“What change would you like to see in the marketplace or what change in law should we make to make certain … we’re focused on access, delivery, and the cost of these pharmaceuticals for patients?”

Answers came quickly, including:

  • Passing rebates onto consumers,
  • Value based system instead of volume,
  • Empower patients about drug choices,
  • Repeal Medicaid penalty on generic drugs,
  • Include biosimilars in Medicare Part D,
  • Greater competition and greater access for patients,
  • Patent reform,
  • Electronic prescribing and the elimination of administrative hassles for physicians,
  • Promote competition
  • Make the Hatch-Waxman Act work as intended

This hearing was a fact-finding mission; now the hard work begins. DPAC will be monitoring and sharing information on this important issue and providing ways to let Congress know how our diabetes community feels.

What can you do right now?

Share this post on Facebook and Twitter so people can be better informed!

If you know even just one person who didn’t have time to watch all three hours of the hearing yesterday (and we bet you know more than one!), then your share will help inform your friends and the diabetes community.

The full video of the hearing can be seen here:


Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment