February 20,2020

ICYMI: Sen. Chuck Grassley takes your questions on drug prices, insulin, and innovation

ICYMI: Sen. Chuck Grassley takes your questions on drug prices, insulin, and innovation
Thursday, February 20, 2020
Sen. Chuck Grassley has a clear position on this Congress’s priority list.
“You can bet your boots, families care a lot more about what they’re paying each month for their child’s insulin than impeaching the president,” the Iowa Republican said.
The issue has become something of a focus for Grassley, who is working to bring more Republicans behind the bipartisan package of reforms intended to lower drug prices that he co-sponsors and that President Trump highlighted during his State of the Union address this year.
Grassley, who chairs the powerful Senate Finance Committee that has jurisdiction over Medicare and Medicaid, has also launched investigations into insulin pricing and the pharmaceutical supply chain. And in a career that spans nearly 40 years in office, Grassley also helped write the law that designed Medicare’s drug benefit, helped shepherd the bipartisan addiction recovery bill known as CARA, and has led a series of oversight probes into hospitals, federally funded medical research, and many other health care players and issues.
STAT recently asked subscribers to submit questions for Grassley. Here are his responses, lightly edited for length and clarity.
Timothy Lash, chief strategy officer of West Health: In a recent Gallup-West Health poll, 73% of Americans said lowering drug costs was an issue for them in the 2020 elections, with 35% saying it was among their most important issues. If the Senate does not take a floor vote on legislation to lower drug costs, what do you expect to happen to senators in close races in the November election?
You’ve hit the nail on the head. Soaring out-of-pocket health care costs are driving voter angst and arguably will drive voter behavior at the polls in November. I’ve shared these sentiments with my Republican colleagues, the White House, and, frankly, anyone who’ll listen to what I have to say.
This year I started my 40th consecutive year holding meetings in each of Iowa’s 99 counties. Dialogue is the essence of representative government. As chairman of the Senate Finance Committee, I also get an earful from those who have a stake in our efforts to legislate drug pricing reforms. That includes patient advocacy groups, Big Pharma, hospitals, and insurers. Based on constituent feedback and stakeholder pushback, I’ve got my finger squarely on the pulse of what matters to people. And you can bet your boots, families care a lot more about what they’re paying each month for their child’s insulin than impeaching the president
J.P. Johnson: If insurance companies were eliminated, wouldn’t pharma companies HAVE TO make medicines affordable?
I’ve long said consumers must have skin in the game to appreciate the cost of delivering health care. Consumer-driven care fosters innovative cures and treatments; it can also help drive down prices. The $100 million question is how to make health care and pharmaceutical drugs more affordable for Americans. Reforming our health care delivery system presents trade-offs and consequences, for the workforce delivering health care and employed within the health care sector and for American consumers and taxpayers. A one-size-fits-all, single-payer system, such as “Medicare for all,” would kick tens of millions of Americans off of their private health insurance, restrict choices and services, and lead to longer wait times for patient access.
As chairman of the Senate Finance Committee, lowering prescription drug costs is a top priority on my agenda in the 116th Congress. I’ve led a series of committee hearings and heard from the largest pharmaceutical companies and pharmacy benefit manager companies (PBMs) to unravel the bureaucracy and secrecy that undermines accountability and drives up costs. My constituents in Iowa agree with the rest of America: The U.S. health care system is too complex, too secretive, too confusing, and too expensive. In addition to my bipartisan Grassley/Wyden bill to reduce drug prices, I support efforts by Chairman Lamar Alexander and others to end surprise medical billing.
Unfortunately, there’s no silver bullet or single boogeyman to blame in this debate — such as your suggestion to eliminate insurance companies. We can’t wave a magic wand to make prescription medicine more affordable. Whether taxpayers or investors are footing the bill, the road from research and development to product approval and commercialization for blockbuster miracle drugs is long, risky, and expensive. However, a $2 million per patient price tag for new gene therapy or inexplicable increases for century-old insulin need a high-dose reality check. Banning insurance companies would be like throwing the baby out with the bathwater. And without private insurance companies competing to negotiate prices with pharmaceutical companies, it may make matters worse.
Stephanie Kutler, director of advocacy for the Endocrine Society: The rapid price increases for insulin have made it difficult for many people to afford this medication and effectively manage their diabetes. This has put patient safety in jeopardy as rationing insulin is not an option. We appreciate that the Senate bill caps out-of-pocket costs, as this will help many people with diabetes. What other provisions in the legislation do you believe will make insulin more affordable for all patients? Are there other provisions specific to insulin that you are considering adding to the legislation?
Last year, I launched a congressional investigation to unravel the drug pricing supply chain and get to the bottom of the unreasonable price trajectory for insulin, a century-old medicine. The exorbitant pricing surge for insulin puts the public health, patient safety, and taxpayer dollars at risk.
My investigation has identified an Achilles’ heel riddling the drug supply chain: too much secrecy. Price transparency will help restore competition and drive down prices. Big Pharma cloaks drug pricing behind a complex web of rebates and discounts, and I want to find out to what extent, if any, they find their way into the consumer’s pockets.
My Prescription Drug Pricing Reduction Act [puts a] cap on out-of-pocket spending in Medicare Part D that will bring relief to people with diabetes [and includes] other provisions to help beneficiaries afford their insulin. Beneficiary responsibility for insulin and other drugs up until the threshold at which their costs are capped drops from 25% to 20%. Drug companies would be penalized for runaway price increases by having to pay a rebate for price hikes above inflation. Stopping pharmacy benefit managers (PBMs) from playing games by taking back a portion of payments to pharmacies after the fact decreases what beneficiaries pay at the pharmacy counter.
It included a provision requiring the Department of Health and Human Services to post online drug company justifications for price increases and the discounts negotiated between the PBMs, insurers, and pharmacies. It also tackles spread pricing, a situation by which PBMs charge an insurer more than they charge the pharmacy, and then they pocket the difference. Iowans call that gaming the system. I’m working to stop these shenanigans and provide savings to taxpayers and the millions of Americans with diabetes who are struggling to afford lifesaving medicine.
Jonathan Poto, founder of Stock Market Portfolio Advisor: The president’s advisers have stated that the drug pricing bill could create an environment where runaway profits by biotechs reaching the approval stage could get effectively capped, killing the “animal spirits” of biotech R&D and their willingness to pursue rare diseases with limited markets and go for marginal improvements in competitive markets. Do you think the large pharma companies and the president are just BS’ing about pulling R&D funding?
There’s no question Big Pharma is driven by profit motives. The so-called “animal spirit” of American ingenuity has launched new frontiers of scientific discovery and 21st century miracle cures and treatments for countless chronic illnesses and rare diseases. The risks and rewards of entrepreneurism generate productivity and prosperity across all sectors of the economy, including pharmaceuticals.
However, runaway profits won’t amount to a hill of beans for Big Pharma if Americans — including the taxpaying public — can no longer afford the growing price tag and soaring sticker shock at the pharmacy counter. My bipartisan drug pricing reform bill provides a reasonable path forward to curb runaway prescription drug costs without sacrificing innovation and restricting access to prescription medicines that Americans need. The real bluff I’m working to snuff out in Washington is the misguided resistance to the bipartisan Grassley-Wyden drug pricing bill.
Lauren Canary, director of the National Viral Hepatitis Roundtable: Medicare is the biggest purchaser of prescription medications in the U.S. Given our free market economy, shouldn’t Medicare be able to negotiate prices?
No. I’ve listened, studied, and legislated on this issue throughout decades of service in the United States Senate. In fact, about 17 years ago, I wrote the Medicare Part D program. For the first time ever, Congress added an outpatient prescription drug benefit to the Medicare program. Now today, some 14 years since the voluntary Part D benefit has been operating, 43 million older citizens are benefiting from the market-based prescription drug benefit. It encourages innovation, produces healthier outcomes, and curbs costs for seniors and taxpayers. That’s because Part D does not allow the federal government to dictate prices or restrict drug coverage. Our bipartisan bill, signed by President George W. Bush, includes a non-interference clause that expressly prohibits Medicare from negotiating drug prices, setting drug prices and establishing a one-size-fits-all list of prescription drugs covered by Part D.
Allowing the federal government to dictate drug prices for Medicare Part D would insert Uncle Sam between the physician and the patient. If there’s one thing elected officeholders should have learned by now about meddling with U.S. health care policy, it’s this: Americans want to choose their doctor, choose coverage that fits their needs, and delivers the best value for their money. Last May the Congressional Budget Office confirmed this point of view. The nonpartisan agency wrote that if Congress allowed Medicare to negotiate drug prices (by repealing the non-interference clause), seniors would be restricted to a scaled down list of drugs (known as the formulary) that would limit the drugs available for providers to prescribe to seniors. As elected representatives and policymakers, we must first do no harm. Preserving the foundation of private enterprise in the U.S. drug supply chain is important to preserve competition, innovation and public health.
Jane Horvath, principal at Horvath Health Policy: As more states seek to create price competition in the prescription drug market through importation of lower cost, but identical drugs, would Senator Grassley support: amending federal law to allow importation of drugs made in FDA-registered facilities from EU and Japan, in addition to Canada? Or amending federal law to allow importation of biologics, such as insulin?
For at least two decades, I’ve supported legislation that would allow U.S. consumers to lawfully purchase and import prescription drugs from Canada. In 2004, I proposed the REMEDIES Act that would open the door for Americans to benefit from the same free trade principles that help lower prices and expand choices for consumer goods and services from around the world.
Importantly, my support for importing prescription drugs required the FDA to certify the products and that manufacturing facilities were in compliance with U.S. safety standards and other FDA criteria, including on-site inspections. Importing drugs to help lower costs for American consumers can’t come at the expense of patient safety. In addition, my bipartisan REMEDIES Act in 2004 included provisions that would have expanded the importation of drugs to other countries, including the EU, Japan, Australia, and New Zealand.
For too long, Americans have shouldered the costly burden of research and development that brings miracle drugs to market. And then, we pay through the nose at the pharmacy counter while consumers in other nations pay a fraction of the costs for very same medicine to treat their arthritis, ulcers, and heartburn, for example. For the better part of a year, I’ve been investigating the insulin supply chain to unravel why prices keep climbing for this century-old medicine.
When it comes to importing biologics, we must also take into consideration patent protections and the safety and efficacy of importing biologics into the medicine cabinets of American patients. Like any proposal, I’m open to negotiating and discussing policy that’s best for U.S. consumers and the American taxpayer. In addition, I also introduced the Safe and Affordable Drugs from Canada Act of 2019 with Sen. Amy Klobuchar to permit the importation of prescription drugs from approved pharmacies in Canada.
John Stanford, executive director of Incubate, a coalition of life science venture capital organizations: As a group that provides the funding necessary to fuel early-stage companies, how do you feel your proposal strikes a balance between pro-patient reforms while continuing to support innovative companies? As early-stage investors, we see better than most just how precarious the innovation ecosystem actually is simply not a given that investors will continue to risk the capital necessary to bring new breakthroughs to market. Are you concerned that inflation caps could be a slippery slope to outright price controls that would fundamentally damage this ecosystem?
I am a primary author of Medicare Part D. During those negotiations 17 years ago, I insisted on a non-interference clause because I recognize the reality of our pharmaceutical ecosystem. America’s system of free enterprise is that magic balance between risk and reward premised on big dreams and big wins. But it also requires a heavy dose of competition to make it work correctly for consumers and taxpayers.
When we wrote Medicare Part D, [former] Sen. Max Baucus (D-Mont.) and I agreed on this fundamental framework. The new prescription drug benefit must preserve our system of free enterprise.
My Prescription Drug Pricing Reduction Act includes inflation caps not only as a reasonable mechanism to deliver patient and taxpayer savings, but also as necessary leverage to secure the bipartisan coalition necessary to get drug pricing reform across the finish line.
I will not swallow the poison pill of socialized medicine and centralized government price controls. That would be the death knell to the genius of America’s system of free enterprise that continues to cure diseases and save lives that just a generation ago delivered a death sentence to patients. Our bill allows pharmaceutical companies to set the launch price, which should ensure reasonable profits.
Jim Thadus: Would you have any suggestions as to how the government will address gene therapy pricing now or in the future? Will there be a comprehensive strategy or a case-by-case strategy per indication? Some insight would help us as biotech investors. 
My Prescription Drug Pricing Reduction Act passed out of the Senate Finance Committee by an overwhelming two-thirds bipartisan vote. The White House supports our bill. It includes provisions that allow Medicaid to pay for gene therapies for rare diseases through risk-sharing value-based agreements. We’re also taking a look at proposals that would allow state Medicaid programs to spread out new gene therapies over time and link those payments to patient outcomes. It’s a balancing act to foster innovation and tackle astronomical pharmaceutical prices that would be unsustainable for taxpayers, insurers, hospitals, and consumers.
Madeline Panichelli: Are you addressing opioids for chronic pain denied by Medicaid? My sister, who I take care of, is now bedridden because she was denied opioids that she’s been taking for 20 years. She has physical and mental issues and is an abuse victim. I can’t find any help.
The Trump administration declared a public health emergency in 2017 to address the nation’s opioid crisis. The misuse of opioid pain relievers has contributed to widespread addiction, disorders, and overdose deaths in the United States. Federal guidelines have been developed to achieve a system of care in the United States to ensure Americans receive appropriate, high quality, evidence-based care for pain.
With that said, the federal government should not dictate decisions between a patient and her health care provider. Your sister is entitled to appeal coverage decisions by Medicaid. Each state agency is required to send a written notice explaining reasons for the denial. Deadlines vary by state and it’s important to act promptly. Contact your sister’s Medicaid case manager to request assistance with the appeals process.
Elizabeth Lee, senior adviser for Voices for Non-Opioid Choices: What steps could Congress take to ensure that acute pain patients — the patients suffering from pain that arises from a temporary condition, such as an injury or surgical procedure — have choices in their pain management options, including non-opioid therapies? What actions can Congress take to help educate members of the public on the availability of non-addictive, non-opioid therapies for acute pain? How could Congress support patients and providers to reduce the unnecessary opioids used in the hospital setting?
As you know, the opioid crisis has shifted the treatment landscape for pain management in the United States as sweeping legislative, regulatory and litigation activity is impacting the delivery of care in hospitals, doctor’s offices, skilled nursing facilities, and pharmacies across the country. Congress passed the Comprehensive Addiction and Recovery Act (CARA) of 2016 and the SUPPORT Act of 2018 to help address the systemic problems that have contributed to the public health crisis, including mishandled distribution and prescribing practices of addictive opioids.
The reforms implemented by CARA include beefed up case management requirements to limit at-risk patients from abuse and misuse of opioids, such as when a beneficiary is found to have been filling prescriptions from multiple prescribers at multiple pharmacies. The SUPPORT Act provides resources to help hospitals develop best practices and protocols for non-opioid pain management and requires updated federal guidelines from HHS to help hospitals navigate the reforms that may include changes to financial incentives and hospital reimbursement for pain treatment practices. New federal reporting requirements will help track patient risk and electronic health record documentation will help trace “waste” and diversion of controlled substances in hospital and pharmacy settings.
I’ve also worked to improve public participation in the National Take-Back Day organized each spring and fall by local law enforcement and the Drug Enforcement Administration. The safe disposal of unneeded, unwanted, and unused prescription medicine keeps prescription medicines out of the wrong hands and helps prevent accidental poisonings, drug addiction, and overdose deaths.
Matthew Carr, physician: Have you considered shortening the patent protection period for brand-name drugs that cost the Americans a significantly higher amount than the Europeans pay for the same drug? Seems like this would incentivize the drug companies to lower prices for Americans.
As former chairman of the Senate Judiciary Committee, I’ve developed a package of bipartisan solutions to fix loopholes in our intellectual property and patent laws. As with drug pricing reform, policymakers must first do no harm. The framers enshrined constitutional patent protections in our founding document because they had the vision to know how crucial entrepreneurism would be for American prosperity. Instead of shortening the patent protection period, I’ve worked to prevent the industry from abusing competitive guardrails and gaming the system at taxpayer expense.
The jig is up. Big Pharma is taking advantage of patent laws to pad their profits. For example, in some cases branded and generic drug manufacturers are in cahoots to keep drug prices artificially high. They broker sweetheart financial arrangements that keep a generic, or a biosimilar, off the market. My bipartisan bill with Sen. Amy Klobuchar would stop this anti-competitive, pay-for-delay, tactic that pushes up the price for consumers at the pharmacy counter.
Some companies try to twist patent laws to operate with legal monopolies for perpetuity. Through a patchwork of legal protections, drug companies may cultivate an impenetrable thicket of patents that result in keeping a generic off the market for years beyond the original patent. I’ve also introduced the Stop STALLING Act with Sen. Klobuchar to stop “sham” citizen petitions to the FDA that are designed to slow approval of new generic medicines. I’m the lead author of another bipartisan effort that calls upon the Federal Trade Commission to investigate mergers of pharmacy benefit managers and health insurers.
Finally, I teamed up with Sen. Pat Leahy to push through the newly enacted CREATES bill that will fix an anti-competitive practice in which branded companies refused to sell samples of their drugs to generic companies that were necessary for them to secure FDA approval to gain entry to the market. The CREATES law also fixes another stalling tactic that branded manufacturers used to filibuster and delay a generics approval process from the FDA. I’ll continue working to curb excessive drug prices with legislative reforms that leverage competition to serve as a check on costs without compromising innovation.
Marilyn Bernstein: If companies can raise prices to the point that the drug might as well not exist, because the people that need them can’t afford them, shouldn’t we eliminate their right to exclusivity?
Patent protections entice investors and startups with the carrot of prosperity to plow forward with years of investment and risk to get a drug to market. Eliminating intellectual property protection would stunt innovative cures and treatments. Blockbuster gene therapies and treatments for common and rare diseases, from cystic fibrosis to diabetes and cancer, give hope to tens of millions of Americans and their loved ones. On the other hand, I’m a legislative and oversight watchdog when it comes to rooting out anti-competitive behavior that games the system at taxpayer expense. Check out my legislative efforts in my answer to Matthew Carr. I’m open to any policy discussion that will help drive down prices without sacrificing innovation and cures that save lives.
Patrick Kinn, infectious disease specialist at the University of Iowa: Given their broad public health benefit, antibiotics require a very different solution in the larger drug pricing debate. Antibiotic manufacturers are unable to earn a return on investment, despite bringing important new antibiotics to market, as evidenced by the bankruptcies of 2 small antibiotics firms in 2019. What new strategies can Congress undertake to secure antibiotic innovation?
Our system of free enterprise rewards entrepreneurship and innovation. Protections for intellectual property also help underwrite the financial capital required for risk-taking and ingenuity to push the envelope on new frontiers of medicine. This ecosystem has fostered miracle cures and treatments to reach the market, from biologics to gene therapy and next generation antibiotics.
However, the pipeline for antifungal and antimicrobial manufacturing is not flourishing. It operates on a low-volume, low-revenue model. In fact, only 12 new antibiotics have been approved since 2000. As of May 2017, 51 antibiotics and 11 biologics were in the clinical pipeline. Only five are expected to reach the market.
Innovation and development of antibiotics are crucial to public health and deserve favorable tax and regulatory regimes to stay productive and competitive in the market. The economics of new antibiotic development are challenging because they are created with the sole intent to be used sparingly. Reforming the Medicare reimbursement process in ways that encourage research on, and the development of, advanced antibiotics available to treat the most serious and life-threatening resistant bacterial infections is one idea to boost the R&D pipeline and bottom line for antibiotic innovators and manufacturers.
Dr. Ronda Akins, infectious diseases clinical specialist at Methodist Health System: Antibiotic resistance is commonly driven by overuse and misuse of antibiotics. In 2019, requirements from CMS now require antimicrobial stewardship in hospitals. However, these requirements for antimicrobial stewardship are not clearly delineated nor mandated to the extent needed to actually provide significant impact (and does not even apply to the community setting). What more can Congress do to promote appropriate antibiotic use and address resistance?
Your concerns are spot on. At least 2 million people are infected with antibiotic resistant bacteria each year, resulting in 23,000 fatalities, according to the CDC. Antimicrobial resistance is a pressing public health challenge that requires an all hands on deck approach with public-private collaboration from the government, pharmaceutical, medical, and scientific communities to address effectively. Although the federal government has issued stewardship processes for hospitals to slow resistance to the therapies, the risk for overuse and misuse requires sustained commitment to stewardship and clinical best practices.
In 2012, Congress passed the Generating Antibiotic Incentives Now (GAIN) Act as a good first step. It provided manufacturers new tools, expedited FDA approval processes, and prioritized qualified infectious disease products (QIDP) with the possibility of extending patent exclusivity.
Antibiotic manufacturing companies operate on a low-revenue, low-volume production model. The profit incentives aren’t driving dollars into research and development for next generation antibiotic therapies. This presents a clear and present danger to public health and to the U.S. economy. Here’s why. Antibiotic resistant infections extend time spent in the hospital between roughly six to 12 days. That adds up to an additional 8 million hospital days for U.S. patients. Antibiotic-resistant infections contribute to lost productivity to the tune of $35 billion a year and an additional $20 billion in health care costs. With these social and economic costs in mind, Congress continues working to find cost-effective, patient-centered policies to address the problem.

In the fiscal year 2020 Inpatient Prospective Payment System (IPPS) final rule, the Trump administration streamlined and improved payment incentives for novel antibiotics that received a QIDP designation. It’s another important step to reduce barriers to product innovation and improve patient outcomes.