Hearing Of The Subcommittee On Health Of The House Committee On Energy And Commerce- Prescription Drug Price Inflation: Are Prices Rising Too Fast?

Statement

I thank Chairman Pallone for holding this hearing, and look forward to hearing from our
witnesses.
I've been working on health and drug-related issues for 35 years. I helped pass the
Waxman-Hatch generic drug legislation and have now been involved for years in oversight work on Medicare Part D.
I'd like to think that when it comes to prescription drugs and the drug industry, nothing
surprises me anymore.
But the recent increases in prescription drug prices shocked everyone.
Our nation is trying to recover from the largest economic downturn since the Great
Depression. The Consumer Price Index has actually dropped over the last year. Social Security
checks will remain stagnant. Millions of Americans have lost their jobs and their health
insurance.
Yet, the brand-name prescription drug industry raised prices by more than 9% over the
last year. These price increases ripple through our health care system with devastating implications. They increase out of pocket costs for drugs and drive up insurance premiums. They increase the cost of the Medicare Part D program. And they mean that more and more citizens -- some with insurance, some without -- are forced to go without the drugs they need to remain healthy.
And reports indicate that this problem may be getting worse, not better. The drug price
increases over the last year are the biggest in years. This past weekend, The New York Times
reported that Allos, the manufacturer of a new cancer drug called cFolotyn, will be selling this
drug for $30,000 a month. $30,000 per month. And the drug hasn't even been shown to increase the life expectancy of those who take it.
It is hard to escape the conclusion that the industry is positioning the pricing of its
products for enactment of the new health reform legislation.
When Americans hear about these soaring drug prices, they are absolutely right to
demand to know what Congress is doing about it.
In the House, led by members of our Committee, we are trying to tackle this problem.
Last month, the House passed historic health care reform legislation, and I am confident that the Senate will soon follow.
The House legislation provides health insurance, including drug coverage, for 36 million
citizens who would otherwise be without it. And it closes the Part D donut hole, meaning that
seniors will no longer have to stop taking drugs when their coverage runs out.
These changes will mean billions of dollars in new market opportunities for
pharmaceutical manufacturers. That's appropriate. We need a profitable brand-name drug
industry in this country. The industry's scientific breakthroughs improve healthcare and quality of life for millions.
But we cannot write the pharmaceutical industry a blank check as we reform the health
care system.
The House health care reform bill strikes an important balance that puts consumers and
taxpayers first. In return for the billions of dollars in new market opportunities, we require that
the drug industry provide additional discounts for the Medicaid program. And we end the multi-billion dollar windfall that the industry received when dual-eligible enrollees were switched from Medicaid to Medicare Part D drug coverage.
The House bill uses the money raised from these industry concessions to help millions of
Americans afford health care coverage and to close the Part D donut hole. This is a policy
outcome that is good for America and the right prescription for PhRMA.
To date, the Senate has so far not gone as far as the House with their drug-related
provisions. When we do sit down with the Senate, I think the pharmaceutical industry's recent
price increases will be exhibit A on why we need new provisions to protect taxpayers, Part D
enrollees, and others with and without insurance from exorbitant prescription drug costs.
Thank you Mr. Chairman.

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