Effort to lower drug prices gets off to rocky start

Congress is turning its attention to reining in health costs, as lawmakers in both chambers look to harness enthusiasm for bringing down drug prices and turn it into bipartisan legislation.

Democrats scored a key victory over the pharmaceutical industry last year with the Inflation Reduction Act, which gave Medicare the ability to negotiate some drug prices. 

Many Democrats are looking to build on that effort and expand the focus to other parts of the drug supply chain, and the goal is to pass bipartisan reforms. Several committees have passed or soon will consider reform bills for pharmacy benefit managers (PBMs).

“The HELP Committee is going to be extremely aggressive on doing everything we can to lower the cost of prescription drugs, and we’re going to deal with that in a number of ways,” including dealing with PBMs, Sen. Bernie Sanders (I-Vt.), who is chairman of the Senate Health, Education, Labor and Pensions Committee, told The Hill.

But one of the key steps in that process got off to a rocky start Tuesday. 

What was meant to be a bipartisan Senate hearing to consider legislation on drug costs was derailed amid accusations by Republicans that Democrats reneged on promises they made while working out the details of the various bills.

The HELP Committee met to consider four bills on increasing competition for generic drugs, increasing access to medicine for rare diseases, and reforming PBM business practices. 

But in his opening statement, ranking member Sen. Bill Cassidy (R-La.) said he felt Sanders blindsided him in the legislative process.

“I am concerned that today the chair seems inclined to abandon the carefully balanced, bipartisan legislation we negotiated for the last several weeks,” Cassidy said. 

Among his top concerns was that despite agreeing certain policies would be excluded from the legislative package, Sanders was going to allow them anyway in the form of amendments. 

Cassidy said even though he may have agreed with the content of some of those amendments in the past, Republicans did not have a chance to fully vet them because key information wasn’t shared with GOP staff.

“At some point, process matters,” Cassidy said. 

Republicans were left confused and frustrated about whether to vote for amendments they would have supported, and they urged Sanders to postpone the markup by a week until after a scheduled hearing with executives from PBMs and insulin manufacturers. 

Next week, the HELP Committee will hear from the leaders of CVS Health, Express Scripts, and OptumRX, the country’s largest PBMs, as well as the CEOs of insulin manufacturers Eli Lilly, Novo Nordisk, and Sanofi.

After a recess during which Sanders left to discuss the matter with Senate Democratic Leader Chuck Schumer (N.Y.), he agreed to push back the markup until May 10. 

“The bottom line here is, look, guys — I know we had disagreements today, but I think Sen. Cassidy and I, Sen. [Susan] Collins, all of us want to accomplish important goals, so let’s go forward together,” Sanders said.

Sen. Tim Kaine (D-Va.) joined Republicans in calling for the markup to be postponed, saying he was worried process disagreements could derail bipartisan progress.

“It would seem to me the goal would be to get this bill out of committee with as much momentum as possible, so it has the greatest likelihood on the floor. It’s a little unusual to be in a posture where we have some people today who are voting against amendments that they kinda want to vote for,” Kaine said.

Schumer is aiming to bring a health package to the floor in the next couple of months. 

While the timing and the specifics of what it could include are in flux because of the looming debt limit negotiations, the bills from the HELP Committee — especially the PBM reforms — are likely to be a major part of it.

Both chambers seem to have common ground with legislation aimed at reforming the PBM industry. PBMs have long been under scrutiny for lacking transparency and for a practice called “spread pricing,” when PBMs charge payers more than they pay to the pharmacy and keep the difference.

Experts say PBMs are far from the sole reason for high drug prices, but they are part of a larger system that makes medicine unaffordable and deserves just as much scrutiny as manufacturers.    

In the House, the Energy and Commerce Committee held a hearing last week to discuss ways to lower health costs, including bills targeting PBMs.

“Patients are facing rising costs at the drug counter, resulting from the growing influence of a small number of pharmacy benefit managers,” said health subcommittee chairman Brett Guthrie (R-Ky.).

“Due to consolidation within the PBM industry, 80 percent of all drug claims are adjudicated by three PBMs. It is this subcommittee’s duty to ensure this consolidation is driving value and improving outcomes,” Guthrie said.

And House Oversight Committee Chairman James Comer (R-Ky.) has said he also plans to hold hearings on the results of his investigation into the PBM industry.

While there’s broad agreement on PBM reform, lawmakers have yet to decide how, and even if, they will address insulin prices in the commercial market. 

The Inflation Reduction Act capped the price of insulin at $35 a month for seniors on Medicare, but Republicans successfully blocked an effort to extend the cap to all insurance. 

There are dueling bipartisan insulin proposals in the Senate: one from Sens. Raphael Warnock (D-Ga.) and John Kennedy (R-La.), and the other by Sens. Susan Collins (R-Maine) and Jeanne Shaheen (D-N.H.). 

“T​​he recent decisions by the three major manufacturers of insulin to cut list prices is certainly encouraging,” Collins said in a recent floor speech. 

“But there is more work to be done. We need legislation to reform the fundamental factors that distort the insulin market, including a purchasing system that is rife with perverse incentives, conflicts of interest, and very limited biosimilar competition.”

But it’s unclear whether there’s the same level of interest in the House. 

After President Biden called for a $35 insulin cap in his State of the Union, Energy and Commerce Committee Chairwoman Rep. Cathy McMorris Rodgers (R-Wash.) called the move “socialist” and a “federal mandate” that hurts competition.

“It’s time for the President to abandon his socialist price schemes and work across the aisle to make insulin products more affordable without jeopardizing insulin competition and innovation,” she said in a statement.