Hearings to examine making medicines more affordable

The Senate Committee on Health, Education, Labor, and Pensions will please come to order. When on the campaign trail, you talk to voters, and one thing that comes through is that life is too expensive. And they're struggling on how do they pay for gas, groceries, and healthcare. And in some things, I see healthcare is more than the other two. My experience as a physician working in a hospital for the uninsured and underinsured, it just brings back those memories of people struggling to pay for that which they otherwise couldn't. To that end, I announced a healthcare affordability plan earlier this week focused on making healthcare less expensive. The MVP plan, money in advance to bring value to patients. But there is a real urgency. The focus of this hearing is how do we make prescription drugs affordable to the American family. So let's start with what works, generics. About 90 percent of all drugs dispensed in the U.S. are generics, and they are affordable. In 2024, generics generated roughly $450 billion in savings. No other country has a generic system that works as well as ours. No other system develops as many new cures as the U.S., but the cures can be expensive and stretch or be beyond the budget of many families. Our goal should be to get these cures into a generic competition faster in a way that preserves the incentive for the next cure to be developed. Many of today's most innovative cures are biologics rather than traditional drugs. They have their own generic equivalent called a biosimilar. They're more complex and more expensive, not as simple as your blood pressure or high cholesterol drug. But they're life-changing. While biologics only account for about five percent of all prescription drugs in the U.S., that five percent makes up almost half of all prescription drug spending, and that is what is driving cost. We need to find a way that supports innovation and protects patients from unreasonably high prices, and both are possible. My goal is to take the lessons learned from generics and apply it to the biosimilars market to bring down the price of these biologics for Americans. We created the regulatory framework for biosimilars before we even had one on the market. The first biosimilar was approved in the U.S. in 2015, five years after the law passed. It's time for us to update that law. It's a complicated market. It has many competing factors, but we need to get patients what they need at the lowest possible price. This committee has taken steps to make both generics and biosimilars less expensive. The Ensuring Timely Access to Generics Act, the Biosimilar Red Tape Elimination Act are great bills I am working to make into law. And we need a free market approach. Ranking Member Sanders will speak, but he'll suggest undermining the free market by eliminating patent protections. But intellectual property protection incentivizes and rewards ingenuity and drives the work needed to find treatments and cures. Government overreach will harm Americans in the long run. When I was a doctor in L.A., 26 years old, and all those 26-year-old men were dying from HIV before we even had a cure, it was the ability to innovate that brought cures. And people who, once those cures became available, a diagnosis which had been a death sentence no longer was, and people lived long and full lives. I've seen personally in my practice the necessity and the power of innovation. Now, it is true that a lot of the research on prescription drugs is done by the NIH. But in most cases, this is the basic research. The pharmaceutical companies are the ones identifying practical applications for the research and doing the clinical trial. Crediting the NIH with developing prescription drugs is like saying the Defense Department supported the creation of the internet, therefore they created Amazon. No, Jeff Bezos, an innovator, created Amazon. Now, Republicans oppose eliminating patents. Intellectual property is key to incentivizing innovation and therefore having these life-changing treatments. The FDA has taken recent steps to streamline regulatory requirements and to incentivize biosimilar drug development. Their changes to guidelines are estimated to reduce the cost of certain studies by up to 50 percent, which decreases the costs for the developer and therefore for the patient. I'll note, this isn't the only way Republicans and President Trump are working to lower cost. Earlier this year, President Trump signed a PBM Reform Act, which we negotiated together on this committee, into law to increase transparency into prescription drug transactions and to crack down on the middlemen profiting from our purchases of these drugs. We're taking the right steps. The Trump administration is doing their job. This committee has worked together to define solutions. We need to keep doing so. I thank the witnesses for being here and look forward to speaking with you all as to how we can support the administration's efforts to lower drug prices and to make healthcare more affordable for American families. With that, I recognize Senator Sanders.

Mr. Chairman, thank you very much, and thank you for holding a hearing in which on a subject that the American people feel very, very strongly about. Bottom line is ordinary Americans understand that the cost of prescription drugs is outrageous, as you've indicated, in many cases unaffordable. As part of a very broken and dysfunctional healthcare system, we have the insane situation that one out of four Americans who have a prescription written for them by their doctor can't afford to fill that prescription. I mean, how crazy is that? They get sicker and sicker, they end up in the hospital, huge expense to the whole healthcare system. Mr. Chairman, according to a poll conducted last month by the Kaiser Family Foundation, 82 percent of Americans believe that the cost of prescription drugs is unreasonable, and 72 percent believe that the federal government is not doing enough to regulate drug prices. And yet, despite those polls, President Trump has claimed over and over again that he has already solved the problem. Matter of fact, I don't even know why we're holding this hearing. President Trump has solved the problem. How wonderful is that? In his State of the Union speech in February, President Trump said, quote, "I took prescription drugs, a very big part of healthcare, from the highest price in the entire world to the lowest," end quote. Hey, Americans, there we go. We're now paying the lowest prices in the world for prescription drugs. Anyone believe that? I don't think so. Well, Mr. Chairman, if that was true, it would really be incredible if President Trump lowered the cost of prescription drugs, as he indicated, by 1,200, 1,300 percent. You know what that means? It means when you go into the drugstore, not only do you not have to pay anything, the pharmacist gives you money in return. How fortunate is that? Millions of people walking into drugstores, pharmacists giving them money because it doesn't cost anything anymore. Unfortunately, anyone who has taken a recent trip to the pharmacy counter understands that what President Trump has said has, surprise, surprise, no basis in reality. Here are the facts. The American people continue to pay by far the highest prices in the world for prescription drugs. That was true before President Trump was president. In most cases, it is even more accurate today. With very few exceptions, prescription drug prices have gone up, not down, since Trump was elected. In fact, during the first two weeks of this year, the pharmaceutical industry raised the price of more than 870 prescription drugs in our country. According to a report I released this morning, 16 pharmaceutical companies that signed so-called most favored nation deals with the president raised the price of more than 270 of their prescription drugs in the U.S. And those price increases took place after the companies made those deals with the president. 2024, these 16 drug companies made $107 billion in profit. Last year, these same companies made $177 billion in profits. Just a few examples. Since President Trump took office in January 2025, Bristol Myers Squibb raised the price of its cancer drug Opdivo by more than $10,000. Merck raised the price of its cancer drug Keytruda by more than $12,000. And all of these price increases took place after President Trump took office, and all of these prescription drugs cost far more, far less in Europe, Canada, and Japan than they do in the United States. Mr. Chairman, bottom line, it does not have to be this way. We do not have to continue paying by far the highest prices in the world for prescription drugs. And that is why I've introduced legislation to cut the price of prescription drugs in America by more than 50 percent. How do we do that? By preventing the pharmaceutical industry from charging more for prescription drugs in the U.S. than they do in Canada, Britain, Germany, France, and Japan. Researchers at the Yale School of Public Health have estimated that this legislation would save the American people $184 billion every year. Mr. Chairman, I would ask unanimous consent to include that study and a letter I received from Yale researchers into the record.

Without objection.

And let me be clear, and this is an interesting point, Mr. Chairman, it really is. What we are proposing for real is what Trump has talked about. His basic concept is not a bad concept. He said, let's look at what is going on in the rest of the world, and let's not pay any more than other countries are paying. That's essentially what we are doing in this legislation. If people are sympathetic to the concept of what Trump is talking about, they should be supportive of what we are doing. The question I think the American people are asking, Mr. Chairman, is why do we pay such a high price for prescription drugs? And I think the answer is not complicated. It deals with a corrupt campaign finance system, the huge amounts of money that the pharmaceutical company puts into campaigns, and by the way, they're very bipartisan, goes to Republicans and Democrats, the enormous number of lobbyists they have here on Capitol Hill. If people can believe this, really quite amazing. There are 1,800 well-paid lobbyists, including the former congressional leaders of both major political parties, working for the pharmaceutical industry. Over three lobbyists for every member of Congress. How's that? Three lobbyists for every member of Congress. That, my fellow Americans, is why you pay the highest prices in the world for prescription drugs. Let me conclude by saying that we have made in recent years some progress under the Inflation Reduction Act that President Biden signed into law. For the first time in history, Medicare cut the price of 10 prescription drugs between 38 to 79 percent. Seniors with diabetes are now paying no more than $35 a month for insulin. Seniors are now paying no more than $2,000 a year out of their own pockets for prescription drugs. We've made some modest progress. We've got a long way to go. Thank you very much, Mr. Chairman.

Thank you, Ranking Member. And I'll note, though, that this is a hearing about generic drugs, which we've done a lot to lower the cost. So let's have our witnesses speak. We're joined today by Dr. Brian Miller, a practicing physician, associate professor of medicine at Johns Hopkins. Dr. Miller served as a visiting fellow at the Hoover Institution at Stanford, where his work focused on FDA regulatory policy and Medicare payment policy. He has held roles across several federal agencies, including CMS, FDA, FTC, and FCC. While at FDA, Dr. Miller was one of two physician reviewers responsible for the approval of a first-in-class breakthrough treatment for tardive dyskinesia. He brings firsthand experience to the issues we're discussing both as an FDA reviewer and healthcare provider. Thank you, Dr. Miller.

Chairman Cassidy, Ranking Member Sanders, and distinguished members of the HELP Committee, I thank you for allowing me to share my views on how improving competition can improve drug affordability. I'm a practicing physician and I'm here today in my personal capacity and my views don't necessarily reflect those of Hopkins, Hoover, the North Carolina State Health Plan, or MedPAC. Everyone has cited this study from KFF which is very on point, which is that four out of 10 Americans have difficulty taking their medications prescribed due to the cost. It's a real problem and we need sort of straightforward solutions. To quote my friend, North Carolina Treasurer Brad Briner, we need lower unit costs without nonsense. Policy has a lot of tools that we can use besides payment to address affordability, and many of these policies thankfully are consensus policies that are within the jurisdiction of this committee. As a former CDER reviewer, I'm very aware of how regulation shapes competition in pharmaceutical product markets. Branded products compete on non-price attributes and then we have generics and biosimilars which compete on price. So I have three areas that I want to share with you today. First is that we need more biologics drug price competition. I'm on the board of the North Carolina State Health Plan, we cover 750,000 state employees, dependents, and retirees. Last year we spent $293 million on biologics. That was 32 percent of our net pharmacy spend and that was a 9 percent increase from the prior year. That's I think around three times the rate of consumer price inflation. If we look at what's happening in FDA product regulation, FDA Commissioner McCary has done a great job to begin the process of streamlining unnecessary pre-market requirements such as comparative clinical efficacy studies. There are a bunch of proposed bills in front of the committee, the Biosimilar Red Tape Act, the Expedited Access to Biosimilar Act, these are a step in the right direction. We have 15 years of experience with biosimilars. We can and should streamline the evidentiary requirements for the biosimilar 351(k) pathway and finally make it an abbreviated BLA pathway or aBLA, similar to the ANDA application for generics. This would basically take Hatch-Waxman and apply it to the biologics market. We would have massive biologic drugs price competition and it would solve the problem of if you have a chronic disease and you require a biologic drug, you should have cheap drugs as an option. You shouldn't go bankrupt because you have a chronic disease. We also know that generics save untold billions every year. We can do even better. One, the citizen petition process is abused by some product manufacturers. We need a better mechanism to address spurious petitions and a mechanism for referral to the FTC and DOJ for consideration of anti-competitive conduct cases. You shouldn't be able to glue your competitor's shoes to the ground in a race. We also need to incentivize market entry in generic markets where there isn't much competition or there's no competition. We could expand the PRV program which would be a market-driven mechanism to address that. And then of course consumers need more channels. We have OTC products, we should have a behind-the-counter channel to grow the role of the community pharmacist. The United Kingdom, Australia, and Canada all use this. We also need, the third thing we need to do is we need to sort of modernize evidence generation. Industry has talked about this probably since I was in college. We need to make this happen. FDA drug review, and I was a drug reviewer, is an artisanal process. You have a few staff who do drug review and the process needs basic algorithms and automation applied for the first level of review so then the human reviewer can customize the review thereafter. This could massively improve productivity. We also need to sort of restructure the centers and push the middle management back to frontline review work. With user fees, the centers have grown, we need to grow frontline staff, not middle management. And then for evidence generation, we need to push clinical trials into the community. There are a lot of concerns that clinical trials are expensive and not diverse. If we push that into the community and use patient-reported outcomes, we can actually get more diverse clinical trials and a lot lower cost for branded drug development. So I think together we can make old drugs cheap again while preserving and strengthening the FDA standards of safety and efficacy. There are more details in my written testimony and I look forward to your questions. Thank you.

Thank you, Dr. Miller. Mr. Ryan Long and... Thank you, Dr. Miller. We have Mr. Ryan Long. And Mr. Long is director of the congressional relations and senior research fellow at the Paragon Health Institute, bringing extensive expertise in health policy, particularly FDA regulation and healthcare affordability. Before joining Paragon, he served on the House Energy and Commerce Committee where he was chief health counsel and later staff director. He will speak to actionable solutions to improve competition to make drugs more affordable for patients. Mr. Long, thank you for being with us.

Chairman Cassidy, Ranking Member Sanders, and distinguished members of the committee, thank you for the opportunity to be here. I believe in the promise of medical innovation to save and improve lives and the power of competition to lower prices. Every two months I receive a biosimilar infusion to manage a chronic condition that has resulted in ER visits and hospitalization. Four years ago I lost two family members, one to rare cancer and another to complications from a rare disease within a month of each other. I understand we cannot have affordable generics and biosimilars unless someone first develops the breakthrough treatments they follow, and we must preserve the innovation ecosystem while allowing for robust generic and biosimilar competition. Today I will discuss the progress and cost savings from improving generic drugs and biosimilars and how to build on that work, the role that over-the-counter drugs can play in increasing affordability, the federal reforms needed to increase generic drug and biosimilar uptake and reduce cost. America is making progress in bringing generic drugs and biosimilars to market. As Chairman Cassidy said, generics now account for 90 percent of all prescriptions filled in the US, the highest rate in the world. The FDA has approved 90 biosimilars since 2015. I want to commend the FDA for its work in further streamlining biosimilar approvals, as Dr. Miller mentioned. In 2024, FDA proposed that switching studies are no longer necessary for an interchangeability designation. In 2025, the FDA eliminated comparative clinical efficacy study requirement. The FDA said that this should shave three to four years off the approval process. These are reforms that Congress should consider codifying. With the success of getting more generics and biosimilars to market, we are seeing more competition, more options, and more savings. Even though 90 percent of all prescriptions in America are generics, they represent only 12 percent of total drug spending. US generic prices are now 33 percent below the OECD median. The expanding biosimilar market is also bringing savings. According to a 2024 report, savings from biosimilar use increased to $12.4 billion in 2023 alone. Together generics and biosimilars have saved the US healthcare system more than $3 trillion in the last decade. According to an HHS analysis of 2023 Medicare claims data, for the eight biologics subject to biosimilar competition in Medicare Part B, spending on those specific drugs was approximately 62 percent lower than it would have been absent the biosimilar. Despite the progress in physician-administered drugs, biosimilar uptake in the Medicare Part D program remains disappointing. A primary reason is what is called the rebate trap. To gain formulary access, manufacturers must offer large rebates to PBMs. A biosimilar with a generally low list price simply cannot generate a big enough rebate to compete for preferred status against a high-priced biologic offering rebates of 60 or 70 percent. A good example of this is the Viatris launch of its insulin product. At first Viatris offered a steep discount but PBMs refused formulary access. Viatris was ultimately forced to offer two versions of the same product, one with a list price that was nearly triple the lower-priced product to generate sufficient rebate capacity. In an important step, the Consolidated Appropriations Act passed this year mandated that PBMs' compensation in Medicare Part D be delinked from drug list prices, more transparency for plan sponsors, and 100 percent of rebate and fees to be passed through to plan sponsors. These are structural changes that are going in the right direction. Although not in the committee's jurisdiction, there are reforms we can make to the LIS copay structure in Medicare Part D that can increase generic utilization, providing savings to the federal government but more importantly providing savings to seniors' out-of-pocket costs. I also want to highlight the opportunity to reduce costs through over-the-counter products which have saved the healthcare system $176 billion annually. The FDA's new additional conditions for non-prescription use pathway and the over-the-counter user fee reauthorization legislation are meaningful steps forward. Each successful OTC transition eliminates unnecessary physician visits, creates additional market competition, and lowers costs for consumers. Finally, I want to address the 340B drug discount program. It has grown from a $4 billion program in annual discounted purchases in 2009 to more than $80 billion in 2024. The program's buy-low, sell-high spread mechanism creates powerful incentives to use more expensive branded drugs rather than generics or biosimilars because the reimbursement spread is larger with these high-priced products. A Health Affairs study found that 340B eligibility was associated with a 22.9 percentage point reduction in biosimilar adoption. Any reform that leaves the spread in place will not fix the program's fundamental distortions. It should be replaced with a direct financial assistance program based on demonstrated need like payer mix and uncompensated care burden, not on the ability to exploit drug pricing differentials which will always advantage wealthier institutions at the expense of true safety net providers the program was meant to serve. In closing, policymakers should consider codifying FDA's biosimilar streamlining reforms, address the rebate trap, support OTC products, and reform 340B in a program that currently advantages wealthier hospitals over struggling safety net and rural hospitals. Investment in competition have made America the global leader in medical innovation. With the right reforms and incentives, we can continue to lower drug costs while preserving the innovation ecosystem that gives patients and families hope. Thank you.

Thank you, Mr. Long, and Senator Sanders will introduce the Democratic witness.

Thank you, Mr. Chairman. I'd like to introduce Robert Weissman, co-president of Public Citizen. Mr. Weissman has led Public Citizen, a national nonprofit consumer advocacy organization since 2009. He is a leading national expert on corporate and government accountability. Mr. Weissman, thanks for being with us.

Thank you very much, Senator Sanders. Senator Cassidy, thank you for convening this hearing and your thoughtful approach to these issues. I want to begin my testimony with my conclusion. The pharmaceutical pricing and development system in this country is broken. It benefits Big Pharma at the expense of all of us. It leaves Americans sicker, in financial jeopardy, and taxpayers paying far too much. It is the case that market principles can drive us to solutions. But we need very bold solutions commensurate with the scale of the problem. I think one of those solutions is the Prescription Drug Price Relief Act that Senator Sanders has relieved, has introduced. Let me begin by explaining just quickly and highlighting as others have done, how badly the system is broken. 40 percent of Americans ration their prescription drugs because they cost too much. That is a disgrace and an outrage and inexcusable in this country. The median price of launch drugs has risen from about $2,000 in 2008 to over $370,000 in 2024. The big pharma companies are making out. They've recorded more than $400 billion in profits over the last three years. The CEOs are making out. They make more than $300 million in profits for the top 20 companies. And this is all unnecessary. We know that because other countries pay less. Americans pay three to four times more for pharmaceutical products, for brand products, than do their peers in other countries. Second point. Big pharma benefits from market failures. In fact, it has adopted, imposed, and protects market failures in the industry. Begin with the area of subsidies. It is a great thing that America spends almost $50 billion a year at NIH. It's a great thing that NIH is responsible for almost every single product launch in part. But we demand nothing in return. We confer on the industry 20 year patent monopolies and other exclusivities. Those are not free market devices. Those are monopoly devices. We prohibit the world's largest purchaser of drugs, Medicare, with few exceptions, from negotiating prices, undermining their ability, its ability to engage as a market participant. The Trump administration, third point, has recognized these problems but failed to address them. Trump RX is nothing more than a failed website. 40 percent of the products on it are generics and generally people will be worse off using Trump RX than using their own insurance. The administration's so-called MFN deals have not brought down prices, as Senator Sanders has explained. The industry is not worried about them and we don't know the details. In fact, my organization Public Citizen has sued the administration to enforce FOIA requests to get access to these deals so we can know what is allegedly being done to benefit American consumers. So fourth, what we need to do is adopt profound systemic reform. We can, in fact, leverage market forces to drive down prices. The Prescription Drug Price Relief Act that Senator Sanders has introduced would adopt the principle that Donald Trump has rightly embraced, that Americans should not pay more for drugs than do patients and governments in other countries. It would then enforce that true MFN principle by saying if a original manufacturer charges more here, we will introduce generic competition. We will unleash market forces that will, in fact, drive down prices. Dramatic savings are available to do that if we do that. $184 billion every year according to Yale University analysts. $184 billion every year. It would be more affordable for patients. It will save Medicare and government payers dramatically. It will lower charges for the insurance industry. We can do similar things if we intensify and expand the power of Medicare to engage in price negotiation by eliminating delay periods, expanding to all products, and then generalizing the lowered prices to private, to the private market. Let me conclude, Mr. Chair, by saying what we need in to deal with serious problems are deep and serious and bold solutions. We have the policy tools available to address the inequities in this market and to rein in big pharma. The only question is whether we have the political will.

Thank you. I will begin with questions. Dr. Miller, you've spoken about your idea to create an abbreviated review pathway for biologics. And how does this idea go beyond other proposals to streamline biosimilar regulation?

Thank you. The FDA currently has a litany of requirements for a biosimilar to get to market. If we streamline that and require purely pharmacokinetic studies to get to market and then give the FDA discretionary authority to require additional studies if needed, if there are...

So if you're saying you don't have to go and show efficacy is assumed and safety is assumed.

Correct. So you make it more like the ANDA path. In the ANDA pathway you show bioequivalence. We need to streamline the requirements for biosimilarity. The time and cost to get to market right now is around nine years.

Is there enough real world experience to show that biosimilars can be assumed to be as safe and as effective as the innovator drug?

We have 15 years showing that no biosimilar is less effective than any originator product.

And sometimes you suggested in your testimony may even be, may be more effective.

May even be more effective.

Now we can continue to follow up afterwards, but nonetheless. Now I note on generic drugs, if I'm writing a prescription, if I write name brand and I want the pharmacist to do name brand, I check a box. But if I don't check the box, the pharmacist has the ability to, to substitute. What about that for the biosimilars and innovator drug?

We should absolutely do that because there will be a small percentage of patients who still need the originator product.

And you have, and you have spoken of the equivalence between class, which is right now you can substitute for an innovator, but you suggest we could substitute one biosimilar for another biosimilar.

Correct, if we want the full benefits of competition.

Okay. Mr. Long, you make the point that the current rebate system encourages the person prescribing the drug to use the more expensive drug because they get the rebate as opposed to the less expensive drug, which would be less expensive to the patient. I just want to highlight that. I've got that correct.

Correct. Correct, Senator.

Now, so the rebate favors the innovative drug. Now under the transparency legislation that President Trump just signed into law that was negotiated by the committee members here, what impact will that have upon that?

Well, it has a couple. One, it's going to delink in the Medicare Part D program the compensation that the PBM gets from the price of the drug. So they no longer get a larger, more compensation for a higher priced drug. The other thing it's going to provide, as you said, more transparency to the plan sponsors so they can know exactly what they're paying for. Prior to the law, PBMs would say a lot of that was confidential information. So even if you were the sponsor of a plan, you couldn't get that information from the PBM.

So, so that transparency, which we're also working on legislation, Hassan and Marshall, is essential. Now let me ask you this. Senator Sanders has proposed to waive intellectual property rights in order to further lower the cost of medications. Does that have potential to backfire upon patients or no, that's neutral and we should be blase about it?

Well, some of the numbers that were used, they were using the list price of the drug, which I think demonstrates sort of the distortions we have in the market. If you look at the price...

So when you say list price, that's before the rebate.

That is before the rebate, but that's usually the price that gets sort of publicized in the press and I think that was part of the Senator's report. That is not actually what insurers pay. And if we sort of opened up the system, allowed more direct to consumer purchasing, there would be lower costs there as well. But there are trade-offs to any policy. We can certainly lower prices. We can lower them very quickly. But if we did, we are going to jeopardize that future cure, that future treatment that you mentioned when you were a doctor in LA. That may not present itself if we go to that type of system.

So Dr. Miller, any comments on that?

I agree. I think more transparency would be helpful as someone who is a board member at a state health plan. PBMs are a challenge.

Dr. Miller, you also talked about a new method for accessing drugs that is between the prescription and the over the counter. You call it behind the counter. Can you elaborate on that?

So ideally through FDA product regulation, you'd have a channel where product manufacturers can apply and have a behind the counter channel where pharmacists dispense short courses of drugs. So they could intensify existing therapy, they could initiate new therapy, extend existing therapy. And so then you would have an additional 139,000 points of access.

And this is being done in other countries.

Correct.

Okay. Senator Sanders.

Thank you. Let me just begin by trying to set the record straight here. President Trump said in his State of the Union address that, quote, "he took prescription drugs from the highest price in the entire world to the lowest," end quote. Let me ask our witnesses, in America today, do we pay the highest prices in the world for prescription drugs or is President Trump as said, the lowest? Mr. Weissman, briefly.

The highest.

Mr. Long.

I believe it's... I believe it's going to take time, but the...

Just highest or the lowest. Trump said we now pay the lowest prices in the world. Is that true?

I don't believe that's true right now, but we're moving...

Okay. Dr. Miller.

It varies. We pay lower prices for generics.

Do we pay the lowest prices in the world for prescription drugs? That's what President Trump said. I just want to make sure.

Some drugs yes, some drugs no.

Okay. Mr. Weissman, the truth of course is, as you indicated, we pay substantially higher prices on average for drugs. Why is that? Briefly explain maybe to the American people what Canada does, what Europe does, so that when Americans go abroad, they are amazed. They go into a drugstore, they pay a fraction of the price they pay here in America. How does that happen?

Well, other countries recognize that although there's a need to support innovation, there's an equal balancing need to make sure that there's access. And they don't accept the authority of big pharma to simply leverage its monopoly power to charge whatever they want. That's why prices are lower. It's as simple as that. They don't let big pharma price gouge as much.

Exactly. So if you are coming up with a new drug, their national health care systems will sit down, negotiate a price with you that people can afford.

Exactly right. And recognizing the value of the new drug.

Right. Okay. Dr. Miller, that makes sense to you? Should the United States government represent the American people and sit down and negotiate with large pharmaceutical companies so that the products, often very important products, innovative products, are affordable? What is the use of a great drug if nobody can afford it? What do you think?

I think that if we address FDA product regulation, we'll lower costs even more.

Mr. Long, what do you think?

I don't think foreign countries pay their fair share of R and D costs and I think we need to resolve that.

They don't pay their fair share. Maybe we might turn that around and say Americans are paying far, far too much in order to provide huge profits for the drug industry. Mr. Weissman, can you say a word about stock buybacks?

Well, in short...

The theory here is that when we pay very, very high prices, all of that money is going back into cancer research and research for all kinds of terrible diseases. That's what the drug companies do by charging us these high prices. Is that the case?

Well, in fact, they have spent more on stock buybacks, on profits, than they do on their investments in innovation.

Um, Mr. Weissman, um, what impact does high prices, high drug prices in this country have on the health of the American people?

Well, it's terrible and it's unnecessary. There are important treatments, as many have said. But if they're unaffordable as you've said, they're useless. So what some people are rationing their treatments, so they're not as effective as they should be. Many people are skipping their treatments altogether because they can't afford it and they're being denied the care and treatment they need. Some people are dying from it, many are needlessly suffering.

So in other words, and Dr. Miller maybe you can jump in on this, does it make any sense at all if somebody cannot afford a drug that can help them, that they end up in an emergency room or they end up in a hospital at great expense to the system? Does that vaguely make any sense at all?

I agree if you have a prescription but can't afford to fill it, it's like you don't have the prescription.

Precisely. All right. Mr. Weissman, we live here in the Congress in the real world. We understand the power of the pharmaceutical industry. To what degree do the lobbyists here who flood Capitol Hill representing the big pharma companies, to what degree do campaign contributions play a role in resulting for Americans to pay the highest prices in the world for prescription drugs?

I think every problem that we've discussed today, all of the panelists, are entirely due to the improper excessive political power of big pharma. Even the problems in biosimilarity are because of the designed in problems that big pharma imposed when we first adopted the system to have biosimilars.

Thanks very much. Senator Collins.

Thank you, Mr. Chairman. And I want to thank you for holding this important hearing. Dr. Miller, many Mainers with diabetes have struggled to afford the cost of their insulin. And in doing so, they often stretch out the amount of insulin, not taking the full amount they need, which jeopardizes their health and even their lives. I'm thinking in particular of a young woman named Beck Hoskins from Chelsea, Maine, who ended up in the emergency room in very serious condition because she simply couldn't afford to take the full amount of insulin that her physician prescribed. As part of our broader legislation to cap the cost of insulin at $35 a month for those covered by private insurance and the uninsured, Senator Jeanne Shaheen and I also included a provision to create a new competitive biosimilar pathway at FDA under which biosimilar drugs could achieve an expedited review. You referred to this concept in your testimony. Could you give us some idea of how long it usually takes a biosimilar to get through the process now and speak further on the importance of developing an expedited pathway?

Thank you. Your principles are right, all drugs should be cheap. No one's paying $200,000 for a 20 year old car, Honda Civic, that's not a that's not a marketplace. It should all drugs should be cheap, insulin's an old drug. Insulin should be cheap. Prices should not be a barrier to access for therapy for all drugs. With biosimilars right now it takes on average nine years, $300 million. If you're a small molecule generic it can take a couple years, $250,000 to $25 million. We need to basically streamline those entry requirements. I agree wholeheartedly. Require pharmacokinetics, so what the drug does to the body, that should be the basic entry requirement. Give the FDA the authority to require more or require less for some products, you'll need less evidence, for a few products you might need a little more evidence. Then you'll have massively lower costs to develop biologics for old biologics and you'll have a hugely competitive biosimilar marketplace just like we have a competitive generic marketplace. Make all drugs cheap again.

I want to ask you about another reform that Senator Shaheen and I have been pushing and it would reform FDA's citizen petition process. Now, that sounds great, who would be against citizens petitions? But in fact, they've often been used to delay the approval of generic drugs or biosimilars. Could you talk about this anti-competitive process that has a good intention but can be misused?

Absolutely, the citizen petition process allows anyone to basically functionally write a letter to the FDA asking for a review or express a safety or efficacy concern. Sometimes some manufacturers use that as a way to delay entry and sort of gum up the works. There was FTC case where a company filed, I think it was 43 citizen petitions to delay entry. That's blatantly anti-competitive. The FDA should have the authority to dismiss those and then we should also have a referral channel to the competition authorities, the Federal Trade Commission and the Department of Justice. And the FDA should regularly refer bad actors to our competition authorities for oversight and enforcement. And in fact, we could actually require the FDA and FTC to file an annual report about anti-competitive abuses of the FDA regulatory process. 100 percent agree with you.

Thank you. Mr. Long, just very quickly because I'm almost out of time. You talked about two versions of a biosimilar insulin being proposed or launched and I remember well that the higher cost biosimilar was picked up by the PBMs, put on the formularies and the cheaper identical version was not. Now, we took care of some of those provisions working together on PBM reforms that were have now been signed into law, but is there more that we should be doing to prevent biosimilars to ensure they reach the market and that we don't have these perverse disincentives that cause the higher cost identical drug to be chosen for the formulary rather than the lower cost drug?

Thank you, Senator. I would say one, we do need to look at the 340B program because those inherent distortions are magnified in that program where entities are incentivized to use higher priced drugs and not use biosimilars. On the formulary side, I think looking at some of the the FTC settlement with Express Scripts particularly in this area where one of the provisions was to say if you had a low cost product and a high cost product then you had to have both of them on the formulary at least at the same tier. And I think that would be something that Congress should look at.

Thank you.

Senator Baldwin.

Thank you, Mr. Chairman. When I travel around my home state of Wisconsin, the overwhelming concern that I hear from Wisconsinites is about the high cost of healthcare and affordability issues in particular and in general. My constituents can't afford individual health insurance coverage policies in the wake of Republican sabotage of the Affordable Care Act and they are very afraid that they may lose their Medicaid due to cuts in the Republicans' big ugly bill. They are also struggling to pay for their prescription drugs while pharmaceutical manufacturers continue to raise prices and rake in enormous profits. Americans pay the highest prices for prescription drugs in the world and this is unacceptable. I've long called for increased transparency through throughout the healthcare system, not just in this area but throughout, so that we can understand with granularity where all the money goes. My Fair Drug Pricing Act, which passed this committee with bipartisan support last Congress, would bring basic transparency to the prescription drug market by requiring manufacturers to justify the exorbitant prices they charge working families. For the first time, the public would have advance notice of proposed price increases and more granular information about how these drug prices are determined. Mr. Weissman, how would transparency efforts like the Fair Drug Pricing Act hold pharmaceutical manufacturers accountable for the unaffordable prescription drug prices that we're seeing?

efforts like the Fair Drug Pricing Act hold pharmaceutical manufacturers accountable for the unaffordable prescription drug prices that we're seeing. Thank you and thank you for your your leadership in that area. I think that is an important tool and to the theme of this hearing, it is a market-based tool. We can't have functioning markets without transparency. One way big pharma exerts its undue authority is by hiding prices, charging people different things, using elaborate schemes like all these rebate systems. And I will also say this is further entrenched in the President's MFN deals where he's allegedly negotiating discount deals for Americans but we have no idea what's in them. That kind of secrecy only benefits big pharma and it only hurts the rest of us. We really need single prices. There's no reason for there to be differential prices for anybody. Maybe there should be there should be discounts for poor people, that can be through government subsidy. The price of a drug should be the price of the drug.

Thank you, Mr. Weissman. I look forward to working with my colleagues to increase the transparency and welcome any of my Republican colleagues to join me in working again on the Fair Drug Pricing Act moving forward. Over one million fewer Americans enrolled in health insurance through the Affordable Care Act this year, including about 22,000 fewer Wisconsinites. For those that were able to keep their insurance, they faced doubled, tripled or even quadrupled premiums. And I continue to hear concerns expressed that the number of uninsured Wisconsinites will only increase as the year goes on. Due to the Republican cuts to healthcare in their big ugly bill, 15 million people are expected to lose their health insurance coverage, meaning more individuals will not have insurance to help cover the costs of their prescription drugs. If their proposed rule to make changes to the Affordable Care Act marketplace next year is finalized, CMS estimates that two million people will lose their coverage. About 75 percent of uninsured Americans say that they are concerned about affording prescription drugs and the vast majority of insured Americans say exactly the same thing. So how will increasing prescription drug costs paired with skyrocketing health insurance costs and coverage losses affect families' abilities to access the medications they need? This is for you, Mr. Weissman.

Well, the best case scenario is that people are going to be financially stressed and many put into bankruptcy. That's the best case scenario. The more likely and generalized scenario is people are not going to get the treatments they need. Full stop. People are going to be sick, they could be treated, they're going to stay sick, some of them will die.

Thank you. Sobering, Mr. Chairman.

Senator Marshall.

Right, thank you, Mr. Chairman, and welcome to our guests as well. Mr. Chairman, I noted in the audience that we have some of my community pharmacists from back home. And I bet some of your community pharmacists have been in to see you as well. I've never met a finer profession, and in so many rural towns in Kansas, they're the last healthcare professional standing. And the PBMs are running them out of town, breaking them financially, oftentimes clawing back more money than what the pharmacist is able to stock the medicine for. In our appropriations bill, on a bipartisan basis, we nipped at the edges of PBM reform, there's still much to be done. But one of the things my pharmacist brought to my attention was the relationship between TRICARE and Express Scripts. And I don't know how long they've had that contract, maybe since the early 2000s, I suppose. Mr. Long, would an audit be helpful? Should it be demanded of TRICARE? I can't imagine the money we're wasting, what my veterans tell me is they get a 90-day supply of a medicine that they, you know, they may not, it's a brand new medicine, maybe they need to, you know, often we any concerns, what any advantages of an audit on TRICARE and Express Scripts?

I don't know that there can ever be a disadvantage to an audit. I think transparency is a good thing no matter the course and no matter the event.

Well, great. And Mr. Chairman, I don't know who we ask to do that, if we ask our Inspector General at HHS or if it's the VA, but I sure hope this committee would get behind that in some way, somehow as well. Let's go to Dr. Miller next. Certainly the people that struggle to get their drugs approved blow up my office, but then I dig down with FDA a little bit and they've approved a record numbers and they're doing more with less. Are you aware of any data points or how the FDA is doing compared to previous administrations on approving drugs?

I think the FDA has worked to accelerate the review process and make it more efficient. My position is as we can take that and do even more.

Absolutely.

And if you look at it in the Office of New Drugs, there are around 340 drug reviewers and there are something like 6,000 people in the Center for Drug Evaluation and Research. There are 12 major super offices, two of them are primarily involved in drug review, some of the others support, and then there's a lot of other bureaucracy.

So what keeps that from happening? I've been here nine years in Congress now, and we knew it was a problem nine years ago. Is it the swamp? Is it the bureaucracy? Is it going to change law changes? What can we do specifically biosimilars to make it more efficient?

So for biosimilars, that abbreviated biologics license application, updating 351(k) to make it more like an ANDA is one thing we can do for biosimilars. For branded products, I think healthy oversight of the FDA and very in the weeds detail about their structure and how they do product review, I think we could use that to restructure drug review, strengthen the standards for safety and efficacy while lowering the cost of market entry.

Okay. Mr. Long, I'm going to come back to you and talk about biosimilars and PBMs, but I still think it's important to look at the big picture here. You know, the big picture is Americans spend 75 percent of their money on prescription drugs on chronic diseases. Seventy-five percent of their money's on chronic diseases. The number one thing we could do to drive down the cost of prescription drugs is to have what? A healthier America, right? So we spend all of our time nipping at the edges again of drug prices, but we need to have a continue to have a focus on making America healthy again. And I think we have to acknowledge that prescription drugs to some extent, to a large extent, keep people out of emergency rooms, out of hospitals, so there is value in those drugs. If you want me to save Medicare, I need an Alzheimer's drug to start with. So I think that we have responsibilities as people across America rather than expecting Congress to fix this all the time. But I want to talk about biosimilars and PBMs and what my pharmacists have told me is that they have to raise the prices on biosimilars to be able to gain access to the formularies. Just talk a little bit about that game that the PBMs are doing for formulary access for biosimilars if you can.

Yeah, in my testimony, I mentioned both the Viatris insulin and Humira. And what happens is in order to get on formulary, you have to provide rebates. So in the insulin example, in 2020, they had a biosimilar, they couldn't get on any formularies. In 2021, they got an interchangeable biosimilar approved. They actually had to launch two different products. It was the same exact drug, same exact biologic. One with a list price that was triple a price that someone could go into a pharmacy and get. And that was in order to provide rebates to get on formulary.

Yeah, and just to sum that up, that the problem is the higher the cost of the drug, the more money the PBM makes. That's why we need to delink those two to win this ballgame.

And I think what Congress did earlier this year is a great first step.

Great first step. Thank you so much, Chairman.

Thank you, Dr. Marshall. Senator Hassan.

Thanks so much, Mr. Chair, and I appreciate you and Ranking Member Sanders holding this hearing. Just last week, I was at an independent pharmacy in New Hampshire and the pharmacist, who it's a family business, his children are taking it over, but told me that when it comes time to refill prescriptions, they're often reaching out to patients because they're not showing up to refill. And what they're learning is the patients are in fact rationing the drugs because they simply can't afford them. So this is a timely and important issue for a whole lot of different reasons. Mr. Long, I want to start with you. We've talked a little bit about this citizen petition, the abuse of citizen petitions. Big Pharma has other techniques as well. It blocks lower cost generic drugs from entering the market by using frivolous patents and exploiting other loopholes to extend the patent protections for their medications for years or decades beyond the exclusivity period provided under the law. When companies engage in years of patent games and litigation, patients are forced to pay for higher brand name drugs. How do drug monopolies raise costs for families and what else can we do in this committee to rein in abusive patent games?

Thank you, Senator. I think we need to make sure that we don't take away incentives to further innovate on existing products. We don't want to have a product where all you do is go to a hospital, get infused. At the end of the day, you do want to have a something that potentially someone can take it home. But we need to have a system that after a certain period of time where you get a return on your investment, that there's a guarantee that we can have generic or biosimilar competition. I think you have a couple bills related to the Patent and Trade Office. I think that that would be a good first step. I think we need to make sure that confidential information is protected, which you acknowledge in your bill. I think there's also a bill you may have on Purple Book listing of exclusivities. I think your bill does sort of mirror what was in the House of Energy and Commerce version in 2019 and what passed the House, and I think that makes a lot of sense.

Yes, so Senator Hawley and I have a bill that would end one type of the loophole, and I'm just letting my colleagues know about it, through which Big Pharma companies exploit a lack of coordination between the FDA and Patent Office, right? So they give very particular details to the FDA, but not quite as much to the Patent Office so that they can then submit a new application with the particulars that they already have given to the FDA and gain exclusivity that way. So I'm hoping we can move that bill forward. There's another loophole, the FDA doesn't tell the public exactly when the market exclusivity period will expire, so that goes to the second bill, and that obviously makes it harder for companies to plan to develop low cost alternatives. And Senator Budd and I are introducing a bill today that would close that loophole, which I hope will bring more affordable options to patients quickly. Mr. Weissman, two years ago, the drug company GlaxoSmithKline, GSK, pulled Flovent, which was one of the most common inhalers for children, off the market. This action caused significant harm to young children with asthma, many of whom were forced to go without an inhaler. It's a very specific thing, all young children can't use all inhalers for a bunch of reasons. GSK then replaced its inhaler with an identical drug, which it distributed through a partner company, making more money, by the way, than they did with the original patented Flovent. This so-called authorized generic allowed GSK to continue to profit without having to pay the hundreds of millions in rebates that it owed to the Medicaid program for raising its prices faster than inflation. After I launched an investigation into GSK's actions, the FDA approved the first ever true generic of Flovent last month, and families will soon have a lower cost inhaler option for their kids. There's still a lot more work to do though. Mr. Weissman, are pharmaceutical companies using authorized generic drugs as a loophole to keep their prices high, and how do we rein in that practice?

Yes, they are. Thank you for your leadership on this issue, and there is more to do. I think one possible specific intervention would be to prevent the launch of authorized generics during the 180-day exclusivity for generics so they couldn't preclude competition from entering. Beyond that, we need much more aggressive antitrust enforcement against these kinds of abuses. And I think your range of questions raises this whack-a-mole problem. There are so many ways they game the system. So we do have to deal with all of them, but we also need broad solutions that just say when the time is up for your exclusivity, the time is up. And also, you don't have the right to price gouge even when you have monopoly patents or exclusivities.

The price gouging piece is huge. Last quick question, Dr. Miller, I'm interested in the behind-the-counter pharmacy concept, because I think it would increase access and a lot of people in my state go to their pharmacists and pharmacists have a big role to play. But how in your view does that actually lower costs?

There are a variety of small molecule drugs which are probably more expensive if you buy them through your PBM and might be a couple bucks if you get them as a cash product because a behind-the-counter channel would function like an OTC channel in terms of price, very low cost.

Okay, thank you.

I'll also note that it would eliminate the doctor's visit in order to get the drug, and the doctor's visit is oftentimes expensive. So just to say total cost. Senator Husted.

Thank you, Mr. Chairman, for hosting the hearing today. You know, being one of the newer members of the Senate, I've watched policy being made from the outside. I know there are a lot of well-intentioned efforts, for example, since the Affordable Care Act was passed, it's become unaffordable. We've seen consolidations of hospitals and insurers and prices going up at twice the rate of inflation, which have affected families in Ohio, affect small businesses in Ohio, can't afford things, and it's certainly affected the taxpayers. So let's try to find, we're trying to find ways in the prescription drug space, because it certainly also I'd add has affected pharmacies as you see the small independent pharmacies getting squeezed as well. But we passed something late last year, Senator Hassan and I had sponsored the SMART OTC Act, which streamlines efforts for taking prescription drugs and making them over-the-counter drugs, because we know that that reduces the cost to the consumer, and I was proud to get that done. Mr. Long, I know you've done some research that discussed that these moves from prescription from over-the-counter drugs for patients substantially creates savings, and I want you to just give me a little more enlightenment on what you think more we should do, how we can encourage more of this to happen.

So when it comes to FDA regulated products, there's statutory standards, but a lot of the approvals are subjective. Generics you have to demonstrate bioequivalence, but if you look at many other products, there is a standard, it's subjective. And so the biggest impediment is for a developer to know what are the requirements and the evidentiary standards that are going to be necessary for the FDA to make a decision on that product. For OTC products, that's been the biggest barrier. It hasn't been the statutory standard. It's what is the FDA going to require for me to demonstrate that standard. And I think the SMART OTC Act, where a potential developer can ask the FDA for a meeting upfront to determine what is going to be necessary to demonstrate to the agency, is probably the biggest reform that could have been made. Now moving forward, I think getting FDA to do sort of product or class specific guidances on the types of information that will be necessary to support an approval is another step forward that needs to be done. And I think with the FDA's public meeting that they have announced or intend to have this year, that's going to be the beginning of that process.

Great. Dr. Miller, part of the SMART OTC Act requires the FDA to sit down with the sponsors if requested and focus on the process and discuss the aligned development of the plan that spells out the risks that need to be addressed in the studies. And I would just ask you, based on your experience, how would such alignment reduce the years of back and forth that it's required in the regulatory process between the agency and OTC sponsors? Is something like that helpful?

Absolutely. And I would add that OTC drugs are sort of the unsung hero in medical practice. We often take them for granted and they're huge. I mean, like think about Tylenol, ibuprofen, all these products that we, proton pump inhibitors for reflux. So, having a structured fashion in which you can ask the FDA for a meeting, they have to show up and sit down and talk with you about your development program is hugely helpful. Couple things we could do to make that even better. That existing process for other product areas can be a bit clunky. So having a real-time bidirectional channel where companies could ask reviewers in real time for advice, I think that would be helpful because then the reviewer would be the counselor and guide to helping the pharmaceutical company make that product and get that to consumers. I agree with my colleague Mr. Long, product specific guidances would be huge. The generics drug industry has that from the Office of Generic Drugs. I'm on that mailing list, I get emails all the time with all these super nerdy guidances. The OTC product space needs that. And I would say for the additional conditions for nonprescription use, which is, started during the Biden administration rulemaking process, finished recently during the Trump administration, we need guidance for that because then you could get a lot of products for chronic disease into the hands of consumer faster and cheaper.

Yeah. I know I'm out of time, but it is estimated that over-the-counter medicines save the United States healthcare system $167 billion annually. The cost of the drug could be between 35 and 90 percent cheaper on average. There are so many things that I know, I use the example of a statin, a low dose of a statin. There's no reason I should have to, when the doctors prescribe that to me and I know that I need it, that I have to continue to go back and go through that prescription drug process for a low dose of a statin that should be available to me over the counter for a far lower price and a far greater convenience. That is one of many examples and we need to go faster. So, thank you, Mr. Chairman, wherever the chairman went. No, we, well now our new member the chairman is Senator Armstrong.

The very new guy has the gavel now. Senator Hickenlooper.

Thank you, Mr. Chair. I say that with admiration. [Laughter.] Thank you all for being here and this is something that is, as senator after senator has reiterated, this is a major cost impact on people in America. Mr. Long, let me start with you. One of the impediments to greater competition that you were discussing is the impact of excessive litigation from brand manufacturers to stifle the generic competitors that would otherwise be bringing these lower cost markets products to market. I couldn't agree more. We have a bill, Senator Collins and Senator Welch, Senator Cotton and I have a bill called Skinny Labels, Big Savings Act, that's going to help address this issue. The Skinny Labels, Big Savings Act is going to help make sure that the long-standing provisions in Hatch-Waxman are not undermined by the enormous costs of these mountains of litigation. It's going to allow more generic manufacturers to not only develop the competitor drugs, but ensure that those medications get to the marketplace in a platform and in a circumstance where they can take that price advantage and save people money. So Mr. Long, do you believe policies like our bill are necessary to ensure that generic competitors have the certainty and the predictability that they need to compete in the marketplace?

Thank you, Senator. I'm preface, I'm not a patent lawyer and it's a complex area of law. But that being said, the FDA does allow for skinny labels and it can facilitate generic entry. Submitting an application should not be considered patent infringement in my opinion. Under this bill, a generic manufacturer is stating a matter of fact that they got approved and it's therapeutically equivalent. It's incongruous for the government to approve a product, but then have a company being sued for patent infringement. Now, I do believe it's important to ensure that there is again the incentive to develop new indications for existing drugs. I think your bill tries to acknowledge that by ensuring that there's a demarcation line between what is, you know, promotion of the skinny label versus the not approved product.

Right. I think the key is we want to make sure that the incentives are for research and innovation and new drugs and not towards, we don't want the incentives to be towards litigation.

Correct.

Which I think we all agree on. Mr. Weissman, according to a study done by Brookings, in the first year of the Medicare drug pricing negotiation program, the ability to negotiate prices of 10 drugs are going to save roughly $6 billion for the American people. The next year, when Medicare can negotiate 15 drugs, savings could be more than $12 billion, just ramping up. And thanks to the legislation that we passed, Inflation Reduction Act, these numbers are going to continue to rise. Mr. Weissman, can you help describe the difference in terms of overall impact of a program like Medicare drug pricing negotiation, which has been signed into law, versus executive orders? And I mean that in the immediate moment, but also long term. Do you think that the executive orders, like some of the ones we've been seeing, will have the same sort of lasting impact on reducing drug costs as when we can pass laws?

Thank you, and thank you for your leadership on the skinny drugs issue as well. Well, there's the obvious point civics lesson, which is that laws are permanent, executive orders come and go. But the executive action by this administration is not obviously doing anything whatsoever. There are proclamations about price reductions that are going to be generated, but no evidence of that and no clarity about what's actually being done, including as I've mentioned in these MFND deals. Medicare price negotiation, by contrast, is using Medicare's market power, a free market principle, to lower prices. What we need to do is build on and expand that Medicare negotiation authority so Medicare doesn't have to wait many years to begin negotiations and it should cover all drugs, not just a few, because we are being, we the taxpayers, being ripped off across the board. What started is a beginning important progress and we should generalize it.

Right. I think that has long been an issue of why that isn't, why we don't have let that market, why we don't allow negotiations to kind of impact that market in a more material way. Quick question, because there is so little transparency with the most favored nations deals, we really don't have any idea of how much that's benefiting in terms of the state Medicaid budgets. And I think the one thing we've tried to get at are the prices included in these deals actually lower than the net pricing that states already get through the Medicaid program. And I think that again, we don't have the data. I'm constantly obsessed with the lack of transparency and the lack of availability of data in all these things. So anyway, just to round it out, do you think that the state Medicaid programs are they going to be able to benefit from this most favored nations program?

We don't know, but little reason to suspect it. As you say, they already get low prices different than the rest of the country. The industry analysts are clear, they don't think this is going to have any impact whatsoever on pharma's profitability, which suggests no, we're not really going to get anything. And of course, the first step would be to publish these deals so the American people know what is allegedly being done.

Right. That's my argument on almost all these things is just more transparency at every turn. Anyway, thank you all for being here. Yield back to the chair.

Thank you. And first of all, I want to tell you all a huge thanks for being here. I've been in your chair a lot more times than I've been in this chair. But I really do appreciate your expertise and it's so critical to get this stuff right as opposed to just generally right. And so I appreciate the details that you all know and bring to us today. My question's a little different in that I do come from private industry and have seen the impact of red tape that just piles up the cost on the consumer and we don't even know it. It's just more and more red tape. It prohibits competition, it prohibits new products from coming to market. And if you think about where we are today with AI, that I think's going to be a powerful tool in terms of faster and faster development of drugs. My question to you all is where if you were really thinking about where the puck is going, a lot of this is, you know, a lot of the focus today has been on how bad things are and trying to put patches on things. I'm curious about if we think about where the puck is going and we think about a much faster world of development of drugs, is there a way to integrate both the development and the approvals? And what are some of the more innovative ways that you all would recommend as we start to think about faster approvals, which, you know, the more lower that cost is, the more inference you get, the more new companies, new upstarts if they're not having to bear the cost of the approval process for four years, means would make a lot of difference it seems like in terms of bringing down the cost of drugs if we had more competition because of our approval process was slower. So I would love to hear from you, Dr. Miller, first about where you think the puck is going on that front.

There's a lot we can do. FDA should maintain that standard of safety and efficacy, but the reviewers in each therapeutic area sit on top of industry, they see all the information. So the reviewers should be the guide and counselor to industry for getting a good product over the finish line. Part of that is getting rid of that red tape, you know, making that bidirectional channel so product manufacturers and developers can talk with the reviewer. The other thing is as said, helping people think differently about how they generate evidence. Having a patient drive to a clinical trial site for two years for, I mean, that's expensive for the patient, it's expensive for the product manufacturer. Pushing clinical trials into regular community practices, HCA, whomever it is, that's where you want clinical trials to occur, you want it integrated into routine care so the data are easier to get and lower cost. And then on the FDA side, you want the product reviewers not spending their time crunching stuff in Excel, like the basics should sort of be done and then the reviewer should be doing customized analysis and then asking and answering better questions in conjunction with the product developers. So there's a lot of money that can be taken out of the system on the development cost side for creating new drugs.

Great. Thank you very much. Dr. Long.

Yeah, 90 percent of drugs that enter phase one trials don't get approved. It costs about $2.6 billion to have a new drug come to market. You've got to pay for a lot of failures. So if we can use the technologies that you talked about to better identify drugs and then streamline the actual development process without undermining the standards for approval, I think that can do a lot to get patients access to drugs quicker and to reduce cost. I think Dr. Miller's right, decentralized trials will expand access to experimental medications for people. But at the end of the day, the biggest thing that can happen for the FDA is consistency in the standards and what the expectations are of the person that needs to file a application.

Right. Thank you. Mr. Weissman.

Thank you, Senator. No doctor for me.

Oh, sorry. [Laughter.]

Appreciate the question. I agree on the importance of speeding up the review process for biosimilars. I think we should also, however, push pull back the period of exclusivity, they're just too long for the start date for the introduction of competition. But I also want to emphasize, if we reduce the cost of development or even regulation, that is not going to translate into lower prices. High prices are not due to the cost of R&D. They're due to the fact that the companies have monopolies and charge what they can. So we should do those things to lower price, to lower cost, but to lower price we're going to have to directly intervene in the pricing monopolies of big pharma. charge as much as they can. So we should do those things to lower price, to lower cost, but to lower price we're going to have to directly intervene in the pricing monopolies of big pharma.

Yeah, I guess I would just question if we really could lower the timeframe that it takes from somebody to develop a drug and get it to market, it seems like you actually could start to really chew away at the monopolies because you would open the gates and lower the barriers to entry for smaller companies. So and I'm I'd love to hear why that's not right.

Well, there's two separate points. One, faster generic entry 100 percent will lower prices. But lowering the development cost or how fast the original manufacturer can get to market will not translate to lower prices because they'll still have the monopoly and irrespective of how much it cost them to develop the drug, they're going to charge as much as they can, they've made that very clear in recent years.

Okay. Dr. Long, do you have a response to that?

Well, I think we talk about generic competition, which is critically important, but there's also therapeutic competition, which is equally as important. About 10 years ago, there was a big discussion on the cost of a drug that cured hepatitis C. Then two competitors came on the market, they weren't generics, they were brands, and you saw a rapid, rapid decline in the price of the product. So I think your comment is true, if we can de-risk the development process, we can truncate the time to get to market, you will have more therapeutic competition, which will lower prices.

Great. Thank you very much. Okay, that concludes my questions. Senator Alsobrooks.

Thank you so much to our witnesses for being here today. You know, Maryland is home to many of our leaders in life sciences in that sector who work every day to bring us closer to life-saving cures from pioneering work to develop a vaccine during Operation Warp Speed to groundbreaking CAR T-cell therapy, which could help to cure cancer and over the past decade alone, we've made tremendous strides toward the development of treatments and cures, including doing what once thought was impossible and that is curing sickle cell. It takes time and significant investments to make these strides and it's something that I'm especially conscious of as this administration continues to demand massive cuts to NIH, including in the president's recent budget proposal for fiscal year 2027. And while we don't want to undermine that progress, for so many Americans, healthcare and drug prices remain unaffordable. Too many Americans are still electing to ration their prescriptions or fill them or not to fill them altogether in order to make ends meet. It's why Democrats led the way by passing the historic Inflation Reduction Act to allow Medicare to negotiate drug prices for the very first time and save taxpayers billions of dollars. So it's especially frustrating when we see this administration taking credit for that progress with a scam version of a real cost savings plan. So my first question, Mr. Weissman, is now the president has touted his gimmick website and his quote deals with pharmaceutical companies as a way for patients to get the quote world's lowest prices on prescription drugs, savings that sound good, but it's important for Americans to understand the truth. Multiple reports have found that Trump RX, the president's gimmick website, actually serves as an advertisement for expensive brand name drugs without mentioning more affordable generic drug options that would actually save patients money. Take albuterol for instance, it's a critical drug for anyone with asthma, my daughter has used it, and if you search Trump RX, the site takes you to the brand name product, Airsupra, that alleges that the Trump RX price would be 69 percent off at $156.63 for a patient, but it doesn't mention anything about generic options. Generic albuterol inhalers go for closer to $40 retail, with the Good RX coupon the price is around $42. And so if you have insurance you'll actually be paying closer to $5 to $10 per inhaler. That's not the president's savings cell, he's not saving patients money, it's the president once again taking credit for something he had nothing to do with and scamming Americans along the way. So how might this kind of misinformation from the Trump RX website potentially harm consumers?

Well, you're exactly right, we just reviewed what's on the Trump RX website, there's I think 69 drugs, 40 percent of them have generics available. So those are cheaper options. For the rest of them, exactly as you say, people probably can afford if they have insurance a lower product through or lower price through available a lower price through their insurance program. So it's diverting people away from lower cost options, but mostly it's not doing anything at all because 69 drugs is just nothing compared to the overall drugs on the market and it is not a serious effort whatsoever to confront the problem of unaffordability.

So now Trump RX as you're saying in effect is essentially costing to some extent people money, we know that the the true intent of it is not to bring down lower cost, but again it's it's once again it's a scam. So what would it mean for an asthma patient for example that was tricked into believing that Trump RX albuterol price is the most affordable option available, would that patient could it be that they would potentially skip taking their medication if they think that they couldn't afford to fill the prescription?

100 percent. We know that. So either people may not take purchase it at all or they might purchase it and then ration it, not take it as often as they should because they just paid so much out of pocket when they could have had a more affordable product even on our existing flawed marketplace.

Yeah, thank you. Now, like any scam, you know, consumers using Trump RX should pay attention to the fine print, we understand that, but Trump RX is steering patients towards brand name products, the site lists about 80 drugs making up just .2 percent of all FDA approved medications. So will a program with such a limited scope actually lower prices for Americans or do direct to customer consumer programs do anything to address long-term cost?

Nothing about this is a serious effort to lower drug prices. The president has said the right thing, we shouldn't pay more than other countries do for drugs, but he's done nothing at all to advance that objective.

Thank you. I yield.

Senator Moody.

Thank you, Mr. Chairman, for convening this extremely important hearing. I think hearings like this are a good way to bring light to some really complex issues, some challenges that we're facing and and maybe, you know, counter some false narratives about really good efforts to try and bring down drug prices. For decades, Americans have been strained by a broken healthcare system and that healthcare system seemingly in terms of cost and even service sometimes puts patients last. Public sentiment of our healthcare system has declined since the COVID pandemic and now according to Pew Research over 70 percent of Americans are very concerned with the price of healthcare specifically. And I think everyone on the dais would agree that the citizens of the greatest country on earth should not be crushed by medical debt for products and services that peer nations pay much less for. For decades, Americans have heard politicians make promises to the American people and I want to offer up some quotes. Bill Clinton said in 1992, we will slow price increases for prescription drugs that force Americans to pay more than Europeans or Canadians pay for the same drugs. During his tenure as president, we experienced the most rapid growth in prescription drug prices in history and by the end of his presidency per capita prescription drug spending had roughly doubled from $306 to $641. George Bush said in 2002 while signing legislation to close loopholes in Hatch-Waxman, we will, I quote, we will reduce the cost of prescription drugs in America by billions of dollars and ease the financial burden for many citizens, especially our seniors. By the end of his presidency per capita prescription drug expenditures had increased by over 30 percent from 641 to 986. Barack Obama when it came to healthcare said in 2008, our new American majority can end the outrage of unaffordable, unavailable healthcare in our time. And by the end of his presidency, not only did per capita drug expenses increase further, but the American people were saddled with fraud and the great expense of Obamacare. Joe Biden said in 2024, I quote, we pay more for prescription drugs than any other major nation on earth. It's wrong and I'm ending it. And quote, I'm going to lower prescription drugs by 60 percent and that's the truth. The truth? By the end of his presidency per capita drug spending had increased by 20 percent to 1,385. Unlike those that have preceded him, President Trump has worked outside the many would say rigged and broken system to offer an alternative. No one's tried to do this before. Trump RX that was launched just two months ago and I'm sure will increase in availability and additional drugs, now provides access to in-demand, heavily discounted brand name drugs to Americans and they can be delivered straight to their door. Right now there are 80 drugs on Trump RX with totally transparent prices ranging from insulin and chemotherapy to GLP-1 weight loss drugs, hormone replacement therapies. These drugs are available right now during his presidency where he's trying to do something different than those administrations that made promises and never moved the ball. Something different, a market that Americans can see what they're paying. They have offered these drugs at massive discounts and 70, 80, even 90 percent in some cases. And don't forget these are brand name drugs that account for over 80 percent of total drug spend despite being less than 10 percent of total volume. I'm not sure that another president would have tried to do something like this out the system that the American people have been saddled with for decades. Under President Trump along with Secretary Kennedy, Administrator Oz, everyone in the administration deserves credit for rolling up their sleeves, trying to put Americans first and delivering results on some of their promises, actually delivering lower drug costs. Can we get more drugs on there? Yes. Can we vary the the drugs available? Yes, but it's only been offered for two months. My guess is this thing will continue to improve. Of course there are more drugs that we need to get on Trump RX, but this is a phenomenal start to creating a freer market in healthcare. And with that I'd like to turn to our witnesses, Mr. Miller and I'll start with you. Do you believe this new channel of access for consumers or an alternative channels for access for consumers like for those that are uninsured or may have higher deductible plans, can that help bring down drug prices overall per capita?

More channels is always good. We need more competition. And we also need more competition in access to drugs behind the counter drug channel and the Trump administration has moved to expand the OTC drug class or over the counter drugs, moving towards more accessibility for lower cost drugs with cash pay is a huge win for consumers.

And clearly what we've done in the past has not worked, we have to try new things.

Agreed.

Thank you.

Senator Markey.

Yeah. Thank you, Mr. Chairman. Americans are paying the highest prices in the world for prescription drugs and the situation is getting worse, not better, under the Trump administration. According to a poll last month, 60 percent of Americans say they are worried about being able to pay and afford to pay for their prescription drugs. More than four in 10 adults said that they have skipped doses, cut pills in half, or simply not filled a prescription in the past year because of cost. One of my constituents from Merrimack, Massachusetts said quote, "I have MS and the drugs I take for me to live a normal life are very expensive, my prescription costs me around $250 every month, my co-pays are very high, so I have to put them on a credit card because I cannot afford to pay them. Now my credit card debt keeps going up." In the richest country in the world, this is simply unacceptable. Americans shouldn't have to make impossible choices between their medicine and their groceries. President Trump promised to fix this. Trump has not fixed it. In fact, Trump and the Republicans in Congress have only made healthcare more expensive for millions of Americans across the country. Their big ugly bill is kicking upwards of 10 million low-income people off of Medicaid. How are those 10 million people going to afford their blood pressure or arthritis medication when that happens? Trump and Republicans refuse to extend the ACA premium tax credits, forcing millions of Americans to pay more for their insurance and sign up for a cheaper plan with higher out-of-pocket costs or go without coverage altogether. Trump looted people's healthcare to pay for tax breaks for billionaires. But he didn't stop there. Trump is piling on with 100 percent tariffs on imported medications and drug ingredients, tariffs that economists and public health experts broadly agree will be passed directly to their patients. These tariffs are just another tax on hardworking Americans. So, Mr. Weissman, the Trump administration is imposing 100 percent tariffs on imported drugs as well as drug ingredients even if the drugs themselves are manufactured in the United States. Do you believe tariffs on medications will increase or decrease drug costs for patients in the United States?

Certainly.

Yeah. And turning away from tariffs, we've already seen an attempt by Republicans to eliminate the ACA's enhanced premium tax credits.

They will tend to increase them.

And why is that?

Well, obviously if you're imposing charges on inputs, it's going to raise the cost of the product. I think there's another aspect of this of course, which is we don't actually know what kind of tariffs are going to be applied because the companies have made deals with the president, secret deals, are getting some kind of exemptions from those tariffs. So this is a very murky area, but there's nothing good that's going to come from these increased tariffs.

Well, a study last year found that a potential 25 percent tariff on pharmaceutical imports could raise U.S. drug costs by $51 billion a year and with Trump calling for tariffs four times that in many instances, seems almost certain to trigger cascading supply chain disruptions and hike prices for patients in the pharmacy counter. So, Mr. Weissman, in your professional opinion, is it fair to expect that if drug costs increase, American patients will bear at least some portion of that cost?

Certainly.

Yeah. And turning away from tariffs, we've already seen an attempt by Republicans to eliminate the ACA's enhanced premium tax credits and slash nearly $1 trillion from Medicaid. So we have a tsunami of healthcare costs that are descending upon the American people and it is just going to be catastrophic. So I just want to give you my remaining 54 seconds, Mr. Weissman, so that you could just tell the committee as we're concluding this hearing, what do you want us to remember about your testimony?

Well, as regards those cuts, we know that that's going to lead to at least 50,000 deaths a year because people are not going to get the care that they need. It's going to massively undermine people's financial security as they including try to pay for pharmaceuticals that are otherwise unaffordable and many of them are just going to skip it and go without treatment they need altogether. I think as an overarching point, I would just say we do need bold solution, market proposals can help. The principle that Americans should not pay more than other countries is exactly right. We can do that by just asserting it and then requiring generic competition if manufacturers refuse to make affordable prices available here in the United States. Thank you.

Thank you, Mr. Weissman. Thank you, Mr. Chairman.

I yield five minutes for questions to myself. Mr. Long, we've heard over and over from the Democrats that the Trump RX website is a gimmick, real attempt to bring down the cost of prescription drug costs, is it a gimmick?

Thank you, Senator. You know, I think complexity in the system is for some design because it allows them to extract value when people don't understand the opaqueness. And so what Trump RX is doing and what other direct-to-consumer advertising or direct-to-consumer drug platforms are doing is to try to simplify the system, make it more transparent, and take away the various layers that are just extracting value without actually doing anything to promote value for patients. And so it has been two months, it will get better, but I think as people are able to go to shop transparently, whether it's on Trump RX or other direct-to-consumer platforms, it will do a lot to simplify the process.

So you're saying it's not a gimmick.

I don't think it's a gimmick.

It's a real attempt to bring down the cost of prescription drug costs, which is obviously very important to most Americans.

Yes, sir.

Okay. Thank you. Dr. Miller, U.S. drug companies are increasingly dependent on China for clinical trials, trials are cheaper and faster in China because patients don't there don't have any rights. How is China not only stealing the intellectual property but moving up the value chain and building their own pharmaceutical industry?

Thank you for highlighting an issue that often gets lost in health policy conversations which is global competition. China wants to dominate the life sciences industry as part of their five-year plan, they want to spend 2.5 percent of their GDP on life sciences R&D, they have the thousand talents program to attempt to capture our intellectual knowledge and people, they do not respect human rights in clinical trials, experimenting on humans in labor camps, we respect human rights, we have standards for safety and efficacy. If we do not modernize FDA product review and modernize evidence generation and transition the FDA from an artisanal process to a standardized initial analysis and then customization and the FDA as a counselor and guide to product developers, we are going to lose American dominance in the life sciences industry to China.

This is the same industrial policy that China uses to take over so many other markets. Last year 42 percent of drug licensing deals came from China. What does that drug industry look like in 10 years if we let China to continue down that path?

China is already working to dominate, in 2020 they had 23 biopharma IPOs, they spent in 2021 they had a $380 billion market cap for their life sciences industry, they will dominate product development, new drug classes, new innovations will come from China, American patients will be second followers. They have a supply chain chokehold on us with the rare earth minerals, which the administration is working to break that, we do not want to replicate that in the pharmaceutical industry.

Unpack that a little bit more. What does all of this mean to our national security?

So if China is at the negotiating table and they control the active pharmaceutical product ingredients for all new drug classes, they could leverage that against us. We have the Medicare and Medicaid programs, you can't access a drug if you can't physically get the drug imported from another country as part of your normal prescribing process. The other thing is this would be devastating economically, the pharmaceutical industry employs PhD, PharmDs, MDs, MBAs, thousands and thousands of well-paying jobs and builds a huge industrial technology base, we could lose that.

Okay. So how do we solve it? What does the FDA need to do about it?

The FDA needs to transition from an artisanal, you know, knitting a sweater process of product review to a factory. So they need to use AI and automation to do initial product review, which they're already starting to, we need to build on that process and eliminate red tape.

Very helpful. I yield back the rest of my time. Senator Kim.

Yeah. Thank you, Senator. I know that there's already been a lot of this discussion so I'm not going to belabor the point, but you know, when it comes to the role of insurance in accessing healthcare and about Trump RX, I just want to drill down on this just a little bit further. Mr. Weissman, first, is it true that you still need a prescription written by a healthcare provider to purchase a drug on Trump RX?

You're going to for a brand name product, yeah, sure.

Yeah. So, okay, so if you don't have insurance, you still have to pay out of pocket to see a healthcare provider to get a prescription, then you have to then pay out of pocket for a branded drug, is that because there's no generics on Trump RX? So I just sort of point that out because I just feel like, you know, I appreciate the desire to try something different. I mean there's so many different issues that we're facing when it comes to the costs of prescription medication, but I can't help but feel like we're going about this backwards and we should be working to make coverage more affordable for Americans, supporting affordable providers like community health centers as a first step. And I look forward to, you know, certainly working with my colleagues on this, but Mr. Weissman, I guess I just wanted to drill down in terms of the prioritization here in this committee, you know, how important is it that we focus on increasing that coverage for affordable healthcare for Americans right now?

Well, unfortunately we've marched in the wrong direction in a massive way with the cuts to Medicaid, which are not going to well first and foremost will take care away from 15 million Americans, the additional cuts that are making things too expensive and costing millions more through the Affordable Exchange Act cuts. But they will also by reducing the patient population, undermine the community institutions including the community health centers you're talking about, they are Medicaid reliant centers and many of them are going to close, as will many rural hospitals, as will many community pharmacies because there're going to be fewer patients to go to those institutions. So we're really going to hollow out the healthcare system for the vulnerable, for rural areas in a profound way as a result.

And so again, we're moving in the wrong direction on that front. You know, one effort we were trying to move forward on and I know others have talked about this, is about the importance of being able to negotiate prices certainly under Medicare but just more broadly, I mean how essential is that going to be to part of the solution here that's necessary?

Well, as we've discussed, there's a this is a whack-a-mole issue, you can try a thousand different small things, they're all important, there's all these issues, but we really do need broad approaches. One of those is the Medicare price negotiation process, which is just a start, but if we were to expand it to remove the delays for Medicare negotiation and let Medicare negotiate all of its drugs, we could achieve massive savings. And if we did that and extended it to the private market, we know from Yale University that number is $184 billion every single year. By the 10-year math here that's 1.2...

What's that number one more time?

$184 billion.

Incredible.

Annually.

Yeah.

I just like to note, I know the senators count in 10-year increments, so that's almost $1.2 trillion.

Yeah. I mean, it just shows you just what is at stake here and what's achievable. And we know what we need to do, we know how to be able to do this, now it's just a matter of political will here and I hope that we are able to make these decisions, go off of the data, and be able to hopefully save the American people a lot of money that right now they are struggling with in terms of paying the bills. So thank you so much, and with that I'll yield back.

Thank you, Senator Kim. I ask unanimous consent for a statement from the Biotech Innovation Organization, a statement for the record from the Association for Accessible Medicines to be admitted into the record without objection. For any senator wishing to ask additional questions, questions for the records are due 5:00 p.m. Thursday, April 30th. Thank you all for being here. It was an illuminating conversation. And you've clearly thought through your issues. The committee stands adjourned.