This week, two congressional hearings on lowering prescription drug prices took center stage. The House Energy and Commerce Committee and the House Education and Labor Committee held hearings on the high cost of prescription drugs. These hearings signal Democrats’ commitment to including prescription drug negotiation in any recovery package. Consumers need to pay less for their prescription drugs – it is key to any affordability agenda and critical to consumers’ economic security. Polls consistently show that the majority of people – and almost 60 percent of registered voters – rank health care costs as their top concern. Notably, while a majority of all people want to see prescription drug prices lowered, these high prices disproportionately affect older adults, low-income people and people of color who have long faced unfair and discriminatory barriers to health and health care. The high out-of-pocket cost for prescription drugs acts as a barrier to needed treatment, and therefore, puts these groups, in particular, at greater risk of chronic conditions such as asthma, diabetes and heart disease, all of which must be managed with medication.
A key moment during the Energy and Commerce hearing was when Rachel Sachs, Associate Professor of Law at Washington University in St. Louis, School of Law, compelled lawmakers to rethink prescription drug pricing reform and laid out three types of solutions, “First, comprehensive prescription drug pricing reform should seek to lower patients’ out-of-pocket costs. Second, reform should strive to fix the misaligned incentives in our existing pharmaceutical pricing and payment system. Third, reform should aim to address the underlying problem of the high prices of prescription drugs.”
Rachel Sachs’ testimony is an important framework as the debate centers on a key piece of legislation, H.R. 3, Elijah E. Cummings Lower Drug Costs Now Act. This legislation would effect meaningful change in four areas:
- Creates the Power to negotiate. It allows for negotiation of pharmaceutical prices in Medicare and makes those negotiated prices available to commercial plans.
- Saves money for consumers. The bill caps Medicare beneficiaries’ out-of-pocket costs on prescription drugs at $2,000 annually – this is meaningful for consumers reliant on prescription drugs for their wellbeing.
- Redirects savings to the federal government. The bill includes a rebate to the federal government, should prescription drug prices rise faster than inflation.
- Requires transparency. Finally, after years of advocacy around the importance of drug pricing transparency, manufacturers would have to report price increases and make them public. These changes would yield significant savings that could be directed to other health priorities.
H.R. 3 makes important strides in lowering pharmaceutical costs for consumers. The bottom line for consumers is this – what do high out-of-pocket costs for prescription drugs mean for me and how I meet my basic needs? Any bill that is included in a recovery package must make a meaningful difference in people’s lives (and pocketbooks).
Curbing out-of-control prescription drug prices requires bold actions at the federal level. Although H.R.3 does not address all of the problems we identified in our issue brief (such as ending pharmaceutical anti-competitive practices and direct-to-consumer advertising), it is a step in the right direction. We commend the House leadership for bringing the legislation forward and urge Congress to ensure its inclusion in any recovery package