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Senator Hassan Highlights Importance of Taking Action to Address Skyrocketing Cost of Prescription Drugs

 Click here or see below for footage of the hearing.

WASHINGTON – Senator Maggie Hassan focused on the need to address the skyrocketing costs of prescription drugs in a Health, Education, Labor, and Pensions (HELP) Committee hearing today.

Senator Hassan highlighted the fact that the United States is one of only two developed countries to allow prescription drug corporations to advertise their products directly to consumers on television and other media, and that the government gives these companies a tax break for these ads.

Asked by Senator Hassan why it would be appropriate to end tax breaks for pharmaceutical advertising, Norm Augustine, Chair of Committee on Ensuring Patient Access to Affordable Drug Therapies at the National Academies of Sciences, Engineering and Medicine, agreed that “there are several negative aspects of this form of advertising,” including the cost of advertising that “shows up in the end price of the product of the advertiser.”

A National Academies of Sciences, Engineering and Medicine report suggests eliminating the tax breaks drug makers get from the government for these ads, and Senator Hassan cosponsored legislation that includes a provision to end these tax breaks.

Senator Hassan also called attention to anti-competitive behavior by the drug maker Allergan. Allergan recently paid a Native American tribe to take ownership of the patents for its blockbuster dry-eye drug, Restasis, and then Allergan licenses back the patents, continuing to sell the drug as usual. The move was meant to shield the patents from review and protect Allergan’s market monopoly at the expense of patients. In response to Senator Hassan’s concerns about what this sham deal means for patients, David Mitchell, President and Founder of Patients for Affordable Drugs, said “the company is treating it like it’s a game, and ‘how can we figure out a way around the laws of the United States,’” adding, “Allergan’s behavior is offensive, and it hurts people. It’s not a game.”

Protecting The Program That Helps Low-Income Families Get Prescriptions For Little-to-No Cost

Image by Oliver.Dodd on FLICKR CC

A healthy, productive workforce relies on access to medical services, including affordable prescription medications.

In 1992, the 340B drug discount program was established to lower costs for providers who mainly care for needy, economically disadvantaged, or uninsured patients. Under the law, pharmaceutical manufacturers discount prescription drugs to health care providers that receive federal grants or are non-profit hospitals that meet specific program standards. Congress envisioned that these providers would use the savings to help deliver discounted and vital drugs to underserved populations.

Unfortunately, the program has deviated from its original intent and is sorely lacking in accountability and transparency. Instead of helping lower-income, uninsured patients afford prescription drugs, we now see large health care manipulating the program for their own financial benefit.

While providers who receive federal grants, such as Ryan White HIV/AIDS, tuberculosis, and Title X family planning clinics, must use their revenue to help the vulnerable populations they serve. Large hospitals argue that they are not explicitly required under the 340B program to use the income they derive from the program to benefit low-income or vulnerable patients, and so they frequently don’t. A 2016 analysis of charity care provided by hospitals enrolled in the 340B drug discount program found that 340B hospitals have charity care rates below the 2.2% national average for all hospitals, and more than one-third (37%) of 340B hospitals provide charity care that represents less than 1% of their total patient costs.

And business is booming for hospitals using the 340B program as a revenue-generating line item. Between 2014 and 2016, the 340B drug discount program expanded 125%, and 340B hospitals are the major drivers behind this. Approximately 45% of all Medicare acute care hospitals nationwide are participants in the 340B drug discount program. In 2016, sales at the 340B price were estimated to be $16 billion, and research forecasts the program will exceed $20 billion by 2019 and $23 billion by 2021—all this growth despite an overall decrease in the number of uninsured patients and lower charity care burdens for hospitals.

The core mission of the 340B drug discount program is to help vulnerable people afford their prescriptions. The current trajectory of this program is unsustainable.

If we are going to ensure patients continue to receive access to the affordable prescriptions, Congress needs to act fast to fix the 340B drug discount program. Improvement to the 340B program center on transparency and accountability: participants in the program must be required to provide discounted medicines from the 340B program to vulnerable patients.

If Congress fails to act, patient costs and hospital profits will continue to swell. And our communities, state, and nation will all be left off with poorer health because of it – an option our workforce can’t afford.

Shea-Porter Co-Introduces Legislation Requiring Drug Companies to Negotiate Lower Drug Prices for Seniors

WASHINGTON, DC – Congresswoman Carol Shea-Porter (NH-01) today co-introduced legislation to require the federal government to leverage its bulk purchasing power to negotiate lower Medicare drug prices for seniors.

“During the ten years I have been advocating for Medicare to negotiate the cost of prescription drugs, prices have skyrocketed while pharmaceutical companies have kept raking in astounding profits and left seniors and other taxpayers holding the bill,” said Shea-Porter. “It’s past time for Congress to stand up to Big Pharma and clamp down on these out-of-control drug prices.”

Current law, passed by a Republican majority, prohibits the Secretary of Health and Human Services from negotiating directly with pharmaceutical companies for lower Medicare drug prices. As a result, Medicare pays, on average, 73 percent more than Medicaid and 80 percent more than the Veterans Administration (VA) for brand-name drugs. If Medicare paid the same price for drugs as Medicaid and the VA, the federal government could save between $15.2 billion and $16 billion a year.

Photo by ccPix.com CC via Flickr

This bill is endorsed by the Alliance for Retired Americans, American Federation of Teachers, the Center for Medicare Advocacy, CREDO, Doctors for America, the Economic Policy Institute Policy Center, Families USA, Knowledge Ecology International, Medicare Rights Center, MoveOn, the National Committee to Preserve Social Security and Medicare, Patients for Affordable Drugs, Prescription Justice, Public Citizen, Social Security Works, and The Senior Citizens League.

For a copy of the legislation, click here.

For a fact sheet, click here.

Hassan Joins Progressive Senators In Introducing Legislation To Bring Down Prescription Drug Prices

Proposal Improves Upon the Affordable Care Act By
Addressing Skyrocketing Drug Prices

WASHINGTON – Yesterday, Senator Maggie Hassan (D-NH) joined Senator Al Franken (D-MN) and others in launching a major push to improve upon the Affordable Care Act (ACA) by bringing down the skyrocketing price of prescription drugs, one of the main reasons why health care costs for seniors and families are rising.

The Improving Access to Affordable Prescription Drugs Act would help ensure that drug companies put patients before profits and bring much-needed relief to families and seniors, including many who have had to make the impossible choice between paying for a life-saving drug and putting food on the table.

“It is long past time for Congress to put patients first by coming together and acting to lower the cost of prescription drugs,” said Senator Hassan. “This major piece of legislation helps ensure that seniors and families can afford the medication they need through common-sense steps including cracking down on bad actors who hike the cost of prescription drugs that have been on the market for years or who play games to prevent competition. I will continue working with anyone who’s serious about addressing the rising costs of prescription drugs and ensuring that all Americans can afford critical care.” 

The landmark proposal, which the Senators said they want to see included in upcoming legislative debates, seeks to tackle prescription drug costs by increasing transparency and accountability, boosting access and affordability of key drugs, spurring innovation, and increasing choice and competition.  

The Senators were joined in introducing this legislative package, which is supported by a wide range of organizations and patient advocacy groups, by Senators Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Sherrod Brown (D-OH), Amy Klobuchar (D-MN), Elizabeth Warren (D-MA), Tammy Baldwin (D-WI), Jack Reed (D-RI), Kirsten Gillibrand (D-NY), Dick Durbin (D-IL), Chris Van Hollen (D-MD), Jeff Merkley (OR), Tom Udall (D-NM), Richard Blumenthal (D-CT), and Cory Booker (D-NJ).

You can read more about the legislation by clicking here or reading below:

The Senators’ legislation is supported by:

  • The American Medical Student Association (AMSA)
  • AFSCME
  • Housing Works
  • MoveOn
  • National Committee to Preserve Social Security & Medicare
  • National Physicians Alliance
  • Other98
  • PFAM: People of Faith for Access to Medicines
  • Public Citizen
  • Social Security Works
  • Universities Allied for Essential Medicines (UAEM)
  • AFT
  • Doctors for America
  • Center for Medicare Advocacy
  • Alliance for Retired Americans

Improving Access to Affordable Prescription Drugs Act

Title I: Transparency

Section 101: Drug manufacturer reporting.

To better understand how research and development costs, manufacturing and marketing costs, acquisitions, federal investments, revenues and sales, and other factors influence drug prices, this section requires drug manufacturers to disclose this information, by product, to the Secretary of the Department of Health and Human Services (HHS), who, in turn, will make it publicly available in a searchable format.

Section 102: Determining the public and private benefit of copayment coupons and other patient assistance programs.

To better understand how patient assistance programs affect drug prices and the extent to which drug makers are using independent charity assistance programs to drive up profits, this section requires independent charity assistance programs to disclose to the IRS the total amount of patient assistance provided to patients who are prescribed drugs manufactured by any contributor to the independent charity assistance program. It also requires a GAO study on the impact of patient assistance programs on prescription drug pricing and expenditures. 

Title II: Access and Affordability

Section 201: Negotiating fair prices for Medicare prescription drugs.

Medicare is one of the largest purchasers of prescription drugs in the country but, unlike Medicaid and the Department of Veterans Affairs (VA), it is not allowed to leverage its purchasing power to negotiate lower drug prices and bring down costs. This section would allow the Secretary of HHS to negotiate with drug companies to lower prescription drug prices, and directs the Secretary to prioritize negotiations on specialty and other high-priced drugs.

Section 202: Prescription drug price spikes.

Prescription drugs are priced in the United States according to whatever the market will bear and are sometimes subject to drastic and frequent price increases without apparent justification. This makes drugs increasingly unaffordable and creates significant uncertainty for patients’ and insurers’ budgets. This section requires the HHS Office of the Inspector General (HHS OIG) to monitor changes in drug prices and take steps to prevent drug manufacturers from engaging in price gouging. 

Section 203: Acceleration of the closing of the Medicare Part D coverage gap.

This section closes the Medicare Part D prescription coverage gap in 2018, two years earlier than under current law, providing faster financial relief to seniors, and requires drug manufacturers to pay a larger share of the costs during the coverage gap.  

Section 204: Importing affordable and safe drugs.

This section allows wholesalers, licensed U.S. pharmacies, and individuals to import qualifying prescription drugs manufactured at FDA-inspected facilities from licensed Canadian sellers and, after two years, from OECD countries that meet standards comparable to U.S. standards.

Section 205: Requiring drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals.

This section restores prescription drug rebates for seniors who are dually eligible for Medicare and Medicaid and extends these rebates to other Medicare patients in Medicare low-income-subsidy plans.

Section 206: Cap on prescription drug cost-sharing.

For plan years beginning in 2019 and later, this section caps prescription drug cost sharing at $250 per month for individuals and $500 a month for families enrolled in Qualified Health Plans and employer-based plans.

 

Title III: Innovation

Section 301: Prize fund for new and more effective treatments of bacterial infections.

This section creates a $2 billion prize fund at the National Institutes of Health to fund entities that develop superior antibiotics that treat serious and life-threatening bacterial infections and to fund research that advances such treatments and is made publicly available. In order to receive prize funds, recipients must commit to offering their products at a reasonable price, share clinical data, and take steps to promote antibiotic stewardship. 

Section 302: Public funding for clinical trials.

This section creates a Center for Clinical Research within the NIH to conduct all stages of clinical trials on drugs that may address an existing or emerging health need. 

Section 303: Rewarding innovative drug development.

This section amends various exclusivity periods awarded by the FDA to brand-name pharmaceutical companies in an effort to accelerate competition in the generic and biologics market. First, the bill modifies the New Chemical Entity (NCE) exclusivity period to allow FDA to accept a generic drug application for the branded product after three years rather than five. Second, this section would add in a requirement that products awarded the 3-year New Clinical Investigation Exclusivity must show significant clinical benefit over existing therapies manufactured by the applicant in the 5-year period preceding the submission of the application. Third, this section reduces the biological product exclusivity from 12 years to 7 years. 

Section 304: Improving program integrity.

This section would terminate any remaining market exclusivity periods on any product found to be in violation of criminal or civil law through a federal or state fraud conviction or settlement in which the company admits fault.

 

Title IV: Choice and Competition

Section 401: Preserving access to affordable generics.

This legislation would make it illegal for brand-name and generic drug manufacturers to enter into anti-competitive agreements in which the brand-name drug manufacturer pays the generic manufacturer to keep more affordable generic equivalents off the market. 

Section 402 and 403: 180-Day exclusivity period amendments regarding first applicant status and agreements to defer commercial marketing.

This section enables FDA to take away the 180-day generic drug exclusivity period from any generic company that enters into anti-competitive pay-for-delay settlements with brand-name drug manufacturers. 

Section 404: Increasing generic drug competition.

This section introduces new reporting requirements and financial incentives to promote and sustain competitive generic markets. 

Section 405: Disallowance of deduction for advertising for prescription drugs.

This section eliminates the tax breaks drug companies receive from the federal government for expenses related to direct-to-consumer advertising.

Section 406: Product hopping.

This section establishes a definition for the term “product hopping” and instructs the FTC to submit a report to Congress on the extent to which companies engage in these anti-competitive practices and their effects on company profits, consumer access, physician prescribing behavior, and broader economic impacts.

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