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Floor Speech

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Mr. CRAPO. I would. I would agree.

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Mr. CRAPO. I agree with the concerns that each of my colleagues have raised here tonight. The current system fails to meet these needs, and I appreciate the intentions of my colleagues in attempting to shed light on the opaque pricing system that we now face. The problem is that the solution proposed in Senate bill 1250 is the wrong solution.

If you listened carefully to the debate of my colleagues, their main objection was that the prescription drug companies are advertising and promoting and creating markets for their products. Their solution is to have them tell you what the price is, and what they are asking in their legislation is that the prescription drug manufacturers be required to state their list price.

But we all know that the list price is not actually the correct price, and it will actually create confusion even further by forcing these pricing numbers to be put out into the marketplace through commercial advertising in a way that will then, I believe, undercut the major reforms that we are now undertaking in the Finance Committee to get the opaque system eliminated, to shed transparency onto the system, and help all consumers--including the United States Government--to understand what the real price is.

Senator Grassley referenced three or four of his bills that we are working on in legislation right now in the Finance Committee that make major reforms to achieve this very price transparency that I am talking about. We had a markup on that legislation just recently, and it passed 26 to 0 in the Finance Committee. It is ready to come to the floor. It will deal with many of these things that have already been discussed here, but it will not create a mandate that the wrong price be advertised on TV.

Far too often, heavily concentrated health plans and PBMs force consumers to pay on that list price for prescription drugs, exposing seniors and working families to catastrophic costs. This bill, if enacted, would mandate the inclusion of these inflated figures in virtually all medication ads, reinforcing the notion of the list price as the best pricing opportunity for consumers.

Respectfully, I see these requirements as moving our current system in the wrong direction by affirming deceptive price points that should never be the basis for a patient's cost or decisions.

A drug's list price includes none of the discounts, none of the rebates or other price concessions found in the net price--the real price that is paid between the insurers and the PBMs and often then dealt with in pharmacies that are integrated with the insurance companies and the PBMs.

A recent study showed that this gap between the list and the net price continues to inflate every year. In 2022, for instance, sticker prices for branded drugs, like those you have seen on charts here, grew by 3.7 percent; whereas, the net prices--the real price--which was not able to be figured out by the consumer accounting for rebates and discounts, remained unchanged.

For medicines like insulin, the gap between the list and the net price can exceed 80 percent.

Rather than broadcast and validate list prices, Congress should ensure that patients can share in the savings that are reflected in net price points, enabling both increased transparency and reduced out-of- pocket costs at the pharmacy counter. The better act--the one I just referred to that is coming out of the Finance Committee with a 26 to 0 vote--would take numerous steps toward achieving this goal with sizable cost-sharing reductions for seniors and no premium hikes. This proposal before us today, by contrast, would risk rubberstamping the centrality of sticker prices that no consumer should need to pay under a rational healthcare system.

I share the concerns of scores of patient advocates and clinicians who agree with the need for more transparent pricing but disagree with the approach taken by this bill. As many of these groups have pointed out, list price disclosures can trigger confusion for consumers and deter healthy, proactive doctor-patient discussions.

In fact, I would think that the drug manufacturers would love to have their list price--the one they want to start out asking for--be the one that is marketed.

For Americans with solid prescription drug coverage, list prices provide no direct insight into what a patient will actually pay for a given drug. For the population more broadly and for policymakers, the mandates in this legislation do nothing to unearth critical information on the price concessions routinely withheld from consumers.

Additionally, the bill's free speech concerns warrant further discussion and scrutiny, and its transformation of CMS into an advertising regulator raises legal questions of mission creep and Agency scope. I stand ready to work with my colleagues on both sides of the aisle to reduce patient costs and to move toward more transparency in the marketplace. That said, for numerous reasons, I cannot support this legislation and must object to its passage.

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