Secretary Alex Azar Raises Possibility of Bipartisan Cooperation on Lowering Drug Prices

January 16, 2019

 

Yesterday, Representative and new Chairman of the House Oversight and Government Reform Committee Elijah Cummings met with Secretary of Health and Human Services Alex Azar to discuss bipartisan ways of working together to lower drug prices. The two agreed to work together to bring down the price of medicines, a sign that Secretary Azar is putting increased emphasis on this issue.

 

Secretary Azar also spoke about concrete measures to reduce drug costs. In a recent speech, he spoke about how brand new companies often manipulate rebates in order to create a 'rebate wall' that discourages more affordable drugs and stifles competition. Azar described these rebate walls as standing in the way of competition and said, "It's only a good deal for defenders of the status quo, whether that's manufacturers selling certain drugs or pharmacy benefit managers negotiating big rebates. It's a bad deal for payers, like many of the employers in this room, who don't end up with the lowest net possible costs. It's a bad deal for patients, who owe more out-of-pocket for the drugs they need."

 

And that is not all. Azar cited some "notorious cases" where a single manufacturer of an off-patent drug will use its power to greatly increase prices. "That's why we have FDA looking at how safe importation of drugs from abroad could help inject competition to address or prevent these price spikes, while not impairing intellectual property rights." Importing more affordable drugs from other countries has bipartisan support-Senators Chuck Grassley (R-IA) and Amy Klobuchar (D-MN) recently introduced S.61, which would allow for personal imports of drugs from approved pharmacies in Canada. In his remarks, Azar suggests that he is considering importation of drugs to help rein in drug costs.

 

Last year Cummings met with President Trump in an attempt to find common ground on lowering drug prices, but no progress was made. He has been a tough critic of the prescription drug system and abuses by brand name companies, and just this week he announced that a hearing on prescription drugs costs would be held on January 29th. His committee also sent detailed requests to twelve drug companies on the companies' pricing practices, specifically information and communications on price increases, investments in research and development, and corporate strategies to preserve market share and pricing power.

 

Cummings said he did not ask for Azar to support specific bills in Congress that would lower drug prices. "He's aware of our legislation," he said. "We are headed for the same goals, but not necessarily the exact same legislation, so I've got to tell you I came out of the meeting feeling hopeful that this is something we can do on a bipartisan basis." Just last week, Cummings introduced bills with Senator Bernie Sanders and other legislators to allow Medicare to negotiate lower drug prices and to allow importation of more affordable drugs from other countries.

 

While it is still quite early and concrete proposals have yet to be fleshed out, Secretary Azar's actions are most welcome. Increasingly, politicians on both sides of the aisle are realizing that the current drug pricing system is anticompetitive and unsustainable, and that major reforms are needed to promote competition and lower costs. We hope that Rep. Cumings and Secretary Azar come together as statesman and solve this problem.

 

 

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