Lower Drug Prices by Focusing on Patients, not Washington

By: COMMITTEE ON WAYS AND MEANS
| Published 02/13/2019

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WASHINGTON, D.C. --Health care remains the number one concern for Americans, and rising health care costs are cited as the primary reason. The Ways and Means Committee, in their second hearing in the 116th Congress on health care, focused on the rising costs of drugs – and what Congress can do to solve it.

Before the start of the hearing, Rep. Kevin Brady (R-TX), the top Republican on the Committee, and Ways and Means Committee Chairman Richard Neal (D-MA) released a joint statement, expressing their commitment to tackle this issue together.

“Consumers, taxpayers, employers, and our public programs like Medicare and Medicaid are all bearing the burden of years of high prices, unsustainable price increases, lack of transparency, and incentives in our government programs that too often reward high prices. We are committed to working together to end this cycle while preserving access to life-saving innovations,” the Committee Leaders said.

Throughout the course of the hearing, Republicans on the Committee said the best way to lower out-of-pocket health care costs is to crack down on overpriced drugs, empower patients to choose the most affordable medicines that are right for them, and eliminate any incentives in Medicare that reward bad actors and lead to higher prices.

To achieve lower drug prices, and “to protect the hope of future medical breakthroughs, Republicans reject Washington price controls that limit American’s access to life-saving medicines many families are counting on,” wrote Rep. Brady and Rep. Devin Nunes (R-CA), the top Republican on the Health Subcommittee, in a letter to Chairman Neal.

One important way to lower drug costs is to address the lack of transparency in the system. Information on prices and alternatives are often unavailable or unhelpful to patients.

“People do not have the right kind of price transparency,” Dr. Joseph R. Antos, Scholar in Health Care and Retirement Policy at the American Enterprise Institute, told the Committee. “We need to change some of the institutional arrangements, especially in the Medicare program, that have fostered this acceleration of list price and rebates.”

Rep. Brad Wenstrup (R-OH), a podiatric physician, said in addition to greater transparency, one potential way to drive down costs is to address the so-called “buy and bill system” and have “the provider get paid the cost of the medication that they paid for and a flat fee.” He said doing so would eliminate a negative incentive in Medicare and lower prices.

The Ohioan veteran added, “What I think . . . might drive, and should drive, down costs is a conversation with the patient.”

Dr. Antos agreed with Rep. Wenstrup’s approach, stating, “patients often need help . . . They need help by someone that they trust that has a medical background . . . who can guide them through that choice.”

Republicans also emphasized that the free market is going to be the greatest force in driving down costs for patients.

Rep. Ron Estes (R-KS) said, “we need . . . open and competitive free markets to make sure that we can keep . . . costs down . . . Medicare for All or other single-payer schemes won’t necessarily lead to better results for the patient.”

Rep. Jodey Arrington (R-TX) asked what the best way is to ensure the market works for patients. Dr. Antos said that the focus must remain on the patient, and all parties – from the insurance companies to the physicians – need to be involved.

“All parties need better information,” Dr. Antos stressed.

Being patient-focused needs to be the priority as Congress works toward legislative solutions, said Rep. Tom Reed (R-NY).

“Republicans and Democrats want to come together and solve this problem,” said Rep. Reed. “We want the patients to get the benefit of this transaction.”

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