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Drug Costs Could Factor in Senate Research Bill

By Melanie Zanona, CQ Roll Call

September 14, 2015 -- Growing concern over the cost of prescription drugs—articulated on the presidential campaign trail and in Congress—could force authors of a Senate biomedical innovation package to address the topic later this fall.

With a quarter of Americans saying they cannot afford their prescription medications and prices up an average of 12.6 percent in 2014, drug affordability is coming under greater scrutiny just as the Senate begins crafting bipartisan legislation to spur medical innovation.

The issue began to crest after the House passed its own biomedical overhaul bill (HR 6) in July with overwhelming bipartisan support, according to a Senate Democratic aide. The House measure would revamp the drug approval process at the Food and Drug Administration and designate $8.75 billion for the National Institutes of Health, but would not address the cost of medicine.

That's not to say drug affordability didn't crop up during debate. Democratic Rep. Jan Schakowsky of Illinois proposed, but then withdrew, an amendment requiring drug makers to disclose research and development costs in order to shed light on pricing.

Since then, Democratic presidential candidates Hillary Rodham Clinton and Sen. Bernard Sanders, I-Vt., have each vowed to address medication costs. Sanders said last week that he hears about the topic "all the time." An August Kaiser Family Foundation poll found that 72 percent of Americans find drug costs unreasonable.

The Senate efforts to write a bill are spearheaded by Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., and ranking member Patty Murray, D-Wash., but on a slow-moving timeline. A legislative draft is expected to drop later this fall and could be marked up before the end of the year, although it isn't likely to receive floor consideration until 2016.

An Alexander aide said no decisions have yet been made about what will be in the package but indicated that drug costs could be addressed more broadly.

"The average cost to get a single drug from the laboratory through the approval process to the medicine cabinet is, according to some estimates, about $1 billion," the aide said. "Through its innovation initiative, the Senate health committee is working to make this process more efficient, which the committee hopes will help in reducing the cost of developing the drugs and devices that help keep Americans healthy."

Partisan Split

Despite widespread concern over drug costs, proposed remedies more often than not divide Republicans and Democrats.

Sanders, a perennial champion for lower drug prices, unveiled a wide-ranging plan (S 2023) Thursday with Democratic Rep. Elijah E. Cummings of Maryland. Part of their legislation would allow the government to negotiate directly with pharmaceutical companies on behalf of Medicare—a policy that has long sparked concern among conservatives, who contend it would hinder beneficiaries' access to drugs and discourage innovation.

"If the government says [drug companies] can have access to the Medicare market but they're only going to get X price, and if they look at the numbers and say it doesn't begin to cover the cost of investment, then they're going to take the drug out of the system, which is not good for patients," said Robert E. Moffit, a senior fellow at the Heritage Foundation, who noted that similar proposals have been floated for years. "It's like putting a gun to their head."

But there are a few components of Sanders' plan that have some Republican support and could provide fodder for authors of the innovation bill. A crackdown on "pay-for-delay" deals, which allow brand-name drugmakers to pay other manufacturers to keep cheaper generic versions of their products off the market, has the support of Senate Judiciary Chairman Charles E. Grassley, R-Iowa, who reintroduced legislation Wednesday to prohibit such deals.

John McCain, R-Ariz., is also a strong proponent of terminating patent exclusivity periods for companies that commit fraud and for allowing prescription medications to be imported from Canada, where they often sell for less because of government controls. Both proposals are in Sanders' legislation.

"You cannot with a straight face say that 'I believe in free trade, and isn't it wonderful we're bringing lettuce and tomatoes from small farms in Mexico,' but somehow you cannot bring brand-name drugs from multi-billion dollar companies from Canada across the border," Sanders said.

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