For the Record: Grassley on Prescription Drug Pricing
For the Record: Grassley on Prescription Drug Pricing
Senate Finance Committee Chairman Chuck Grassley (R-Iowa) has worked for greater access and affordability of prescription drugs throughout his time in the Senate. His efforts have included aggressive oversight and smart, bipartisan legislation.
Whether advocating for increased competition on the prescription drug market, calling for greater transparency across all sectors of the health care system or stopping drug companies from gaming the system for their own financial gain, Grassley has been a constant proponent of finding solutions to lower drug costs for American patients and taxpayers.
Recent Oversight
Insulin Price Investigation
The Centers for Disease Control and Prevention (CDC) estimates that more than 30 million Americans have diabetes. On January 29, 2019, the Finance Committee, led by Chairman Grassley, held a hearing on drug pricing. One witness, Kathy Sego, testified that her son, worried about the financial burden that the monthly $1,700 cost of insulin was having on his parents, began rationing treatment at the sacrifice of his health.
· February 22, 2019 - Grassley and Ranking Member Ron Wyden (D-Ore.) sent letters to Eli Lilly, Novo Nordisk and Sanofi, the three largest insulin manufacturers in the United States to investigate insulin prices.
· April 2, 2019 - Grassley and Wyden sent letters to leading pharmacy benefit managers (PBMs) regarding their role as middlemen in the skyrocketing cost of insulin.
· April 3, 2019 – Cigna (Express Scripts) announced it would cap out-of-pocket costs for insulin prescriptions for some patients.
Direct-to-Consumer Advertising
The average American sees nine DTC prescription drug ads each day. Studies show that patients are more likely to ask their doctor for a specific brand-name medication, and doctors are more likely to prescribe one, when they have been marketed directly with drug advertisements. Chairman Grassley and Sen. Dick Durbin (D-Ill.) introduced legislation to require price disclosures in DTC advertisements.
· November 16, 2018 – Grassley and Durbin wrote a letter to HHS and called for implementation of proposed regulations requiring pharmaceutical companies to list prices of their prescription drugs in direct-to-consumer (DTC) advertisements.
· May 8, 2019 – HHS announced the issuance of final regulations requiring pharmaceutical companies to companies disclose prescription drug prices in TV ads.
· May 13, 2019 – Grassley and Durbin introduce legislation to codify HHS regulation.
· July 11, 2019 – Grassley and Durbin vow to keep pushing for transparency after a federal judge rules DTC ads do not have to include list prices of prescription drugs.
Competition
Chairman Grassley has long supported efforts to combat anti-competitive tactics in the pharmaceutical market. Along with Sen. Amy Klobuchar (D-Minn.), Grassley introduced the Preserve Access to Affordable Generics Act. The legislation limits “pay for delay” deals where brand-name and generic drug manufacturers use anti-competitive pay-off agreements to delay cheaper alternatives from reaching consumers.
Grassley and Klobuchar also introduced the Stop Significant and Time-Wasting Abuse Limiting Legitimate Innovation of New Generics (STOP STALLING) Act. This legislation enhances the FTC’s ability to bring cases against entities that abuse the FDA’s citizen petition process by filing sham petitions to stop or delay the approval of generic competitors.
Grassley and Leahy introduced the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act. The legislation addresses abuses and delay tactics by brand-name companies that prevent generic companies from performing the necessary testing and distribution necessary for U.S. Food and Drug Administration (FDA) approval. The Congressional Budget Office (CBO) estimated that the bill would result in almost $4 billion in savings.
· June 22, 2018 – Grassley and Klobuchar sent a letter to the FTC urging them to examine whether makers of biologic medicines are using strategies like “pay-for-delay” to hinder or delay biosimilars from entering the market.
· August 14, 2018 – Grassley sent a letter to the Justice Department urging it to conduct a vigorous review of the proposed mergers of Cigna Corp. with Express Scripts Holding Co., and CVS Health Corp. with Aetna, Inc., each of which play significant roles in the price of prescription drugs for U.S. consumers.
· August 17, 2018 – Grassley sent a letter to the FTC urging it to conduct an assessment of recent and ongoing consolidation in the pharmaceutical supply chain and its potential impact on prescription drug prices for U.S. consumers.
· October 10, 2018 – Grassley sent a letter to the FTC urging it to conduct an assessment of potentially anticompetitive contracting practices between insurers and hospital systems in the U.S. deliberately designed to prevent consumers’ access to quality, lower cost care.
· November 8, 2018 – Grassley and Klobuchar sent a letter to President Trump urging him to support legislation to limit “pay-for-delay” pharmaceutical settlements as part of the Administration’s effort to bring down the skyrocketing price of prescription drugs.
Drug Importation
Chairman Grassley has been a consistent supporter of importing prescription drugs from Canada. The first reimportation vote in the U.S. Senate occurred in July 2000 on an amendment offered by former Sen. Jim Jeffords (I-Vt.), which Grassley supported. Grassley voted a second time for reimportation of prescription drugs from Canada in July 2002 on an amendment offered by former Sen. Byron Dorgan (D-N.D.). Grassley voted for another Dorgan amendment when it was offered in June 2003. In 2004 and 2005, Grassley introduced the Reliable Entry for Medicines at Everyday Discounts through Importation with Effective Safeguards (REMEDIES) Act. The bill makes it legal for U.S. consumers to buy safe prescription drugs from Canada.
· November 23, 2015 – Grassley and McCain sent a letter to then-HHS Secretary Sylvia Matthews Burwell to urge her to increase drug importation from Canada.
· February 14, 2017 – Grassley, McCain and Klobuchar sent a letter to then HHS-Secretary Tom Price urging him to him to fast track the importation of prescription drugs from Canada.
· July 19, 2018 – HHS announces it would create a task force to explore prescription drug importation as a way to reduce U.S. drug prices.
Medicaid Drug Rebate Program
Grassley is a longtime advocate for lower prescription drug prices and has been a vocal critic of EpiPen’s exorbitantly high cost. Iowans regularly contact Grassley by phone, email and at his annual 99 county meetings about the difficulties they faced paying for the anti-allergy EpiPen device. After conducting oversight of the issue in 2016 and 2017, Grassley learned that Mylan, EpiPen’s distributor, classified its popular anti-allergy medicine as a generic instead of as a brand name product in the Medicaid Drug Rebate Program (MDRP). That incorrect classification allowed Mylan to pay smaller rebates to States and government programs, such as the MDRP. Grassley’s investigation also found that HHS and the HHS Inspector General did not have adequate authorities to properly oversee the MDRP and ensure drugs were properly classified. The costly practices were confirmed by the HHS Inspector General when it found – at Grassley’s request – that taxpayers may have overpaid for the EpiPen by as much as $1.27 billion over 10 years. The Inspector General also found that additional drugs could be misclassified.
· August 22, 2016 – Grassley sent a letter to Mylan Chief Executive Officer Heather Bresch asking her to explain a steep price increase for EpiPens.
· August 24, 2016 – Grassley sent a letter with four other senators to then-FDA Commissioner Robert Calliff asking about FDA’s approval process and other steps for alternatives to EpiPen.
· August 25, 2016 – Grassley reiterated his expectation for answers from Mylan after an announcement the company would expand its patient assistance programs.
· August 29, 2016 – Mylan announces it will make a generic version of EpiPen available.
· August 31, 2016 – Grassley, along with two other senators, sent a letter to then-Acting CMS Administrator Andrew Slavitt asking for information on the effect of Mylan’s price increases on the government’s prescription drug costs.
· September 6, 2016 – Grassley sent a letter to Iowa Attorney General Tom Miller asking him to review whether Iowa taxpayers overpaid for EpiPens under Medicaid.
· September 9, 2016 – Grassley receives unsatisfactory response from Mylan to his August 22, 2016 letter.
· September 20, 2016 – Grassley, along with fellow Senate Finance Committee Republicans, sent a letter to HHS IG urging for an exam of CMS’ oversight of the MDRP.
· September 28, 2016 – Grassley, Klobuchar and Sen. Richard Blumenthal (D-Conn.) asked the Justice Department (DOJ) to consider investigating whether Mylan violated the law by misclassifying EpiPen.
· October 3, 2016 – Grassley sent a letter to Slavitt requesting records related to EpiPen’s classification for purposes of the MDRP.
· October 3, 2016 – Grassley sent a letter to Bresch asking again for her to explain the steep price increase for EpiPens.
· October 6, 2016 – Grassley releases findings on EpiPen costs to taxpayers.
· October 7, 2016 – Mylan settles case with DOJ regarding overcharging taxpayers for EpiPen.
· October 11, 2016 – Grassley sent a letter to Attorney General Loretta Lynch seeking details about DOJ’s settlement with Mylan.
· November 1, 2016 – Grassley sent letters to the Departments of Defense (DoD) and Veterans Affairs (VA) seeking information on agency spending for EpiPens.
· November 7, 2016 – Grassley, Blumenthal and Klobuchar call on Mylan to reimburse DoD for overpayments for EpiPens.
· November 7, 2016 – Grassley and Sen. Patrick Leahy (D-Vt.) sent a letter to Federal Trade Commission (FTC) Chairwoman Edith Ramirez asking for a review of Mylan’s business practices with respect to EpiPen.
· November 8, 2016 – Grassley sent a letter to the HHS IG asking for its records over the identification in 2009 of EpiPen’s misclassification that led to overcharging taxpayers.
· November 21, 2016 – Grassley sent a letter to the Securities and Exchange Commission (SEC) asking for information on whether the commission was looking into Mylan’s potential misleading of investors regarding its settlement with DOJ.
· December 6, 2016 – HHS confirmed it would conduct three new reviews of the MDRP at the request of Grassley and fellow senators.
· December 12, 2016 – Grassley sent a letter to then-President-elect Trump urging appropriate classification under the MDRP.
· January 4, 2017 – Grassley sent a letter to Slavitt seeking information on if the Obama administration knew certain drugs were misclassified under MDRP, oversight efforts of the program and what steps the Administration was taking to fix the problem.
· January 5, 2017 – Grassley sent a letter to CMS asking if it sought to recoup tax dollars overpaid for EpiPens from Mylan.
· January 25, 2017 – After receiving no response, Grassley sent a follow-up letter to CMS asking if it sought to recoup tax dollars overpaid for EpiPens from Mylan.
· March 8, 2017 – Grassley sent a letter to Mylan competitor Kaleo Pharmaceuticals to explain its pricing for Auvi-Q.
· June 15, 2017 – The Trump administration announces it is working on an executive order to address high prescription drug prices.
· August 17, 2017 – Mylan agrees to pay $465 million to resolve False Claims Act Liability after underpaying Medicaid rebates on EpiPen.
· October 31, 2017 – Grassley sent a letter to Miller asking for more details regarding Iowa’s receipt of $1.5 million as part of the DOJ, Mylan settlement over EpiPen.
· August 16, 2016 – FDA approves the first generic version of the EpiPen.
Recent Legislation
Sponsored
· Prescription Pricing for the People Act of 2019
o Requires the FTC to study the role and recent merger activity of pharmacy benefit managers and other supply chain intermediaries, as well as possible anticompetitive behavior, and to provide policy recommendations to Congress to promote transparency and competition.
· Safe and Affordable Drugs from Canada Act of 2019
o Permits the importation of prescription drugs from approved pharmacies in Canada. This legislation intends to provide safe and less expensive prescription drugs for U.S. consumers.
· Ensuring the Value of the 340B Program Act
o Increases transparency in a targeted way into the 340B program by requiring participating hospitals to report the total acquisition costs for drugs collected through the 340B program, as well as revenues received from all third party payers for those same drugs.
· Advancing Care for Exceptional Kids Act
o Allows health care providers to coordinate care, lower costs, and improve quality outcomes for children with complex medical conditions on Medicaid who require specialized care.
o Makes it legal for U.S. consumers to buy safe prescription drugs from Canada.
Co-Sponsored
o Curbs sham petitions by drugmakers to delay FDA approval of lower-cost alternatives.
· Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act
o Deters pharmaceutical companies from blocking cheaper generic alternatives from entering the marketplace by preventing access to drug samples needed for testing.
o Allows HHS to grant expedited reviews and inspections, and temporary importation when there is, or is likely to be, a drug shortage or when there are fewer than five competitors in a market for drugs that have been approved for at least 10 years.
· Preserve Access to Affordable Generics and Biosimilars Act
o Stops anti-competitive pay-off agreements that keep more affordable generic and biosimilar equivalents off the market and makes sure consumers have access to the lower cost pharmaceuticals they need.
· Patient Right to Know Drug Prices Act
o Eliminates pharmacy “gag clauses” that prevent pharmacists from informing customers when they could get their medication cheaper by paying out-of-pocket.
o Provides HHS with additional authorities to monitor drug manufacturers who participate in MDRP and impose reporting and transparency requirements on the government to show how the additional authorities have been used. Also allows the secretary to require drug manufacturers to reclassify their drugs and impose civil monetary penalties when drugs are knowingly misclassified.
· Durbin-Grassley DTC Advertising Amendment
o Requires pharmaceutical companies to list prices of their prescription drugs in DTC advertisements.
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