House 2024 health budget hearings touch on price controls and PBMs

U.S. Rep. Brett Guthrie (R-KY) speaking at a hearing at the U.S. House of Representatives in 2023

The impact of drug price controls on innovation, market distortions caused by pharmacy benefit managers (PBMs), and the importance of accelerated approval came up in House hearings this week as Health and Human Services (HHS) Secretary Xavier Becerra took questions about President Biden’s proposed 2024 health budget.

Becerra testified on March 29 before the House Energy & Commerce Health Subcommittee hearing and on March 28 appeared before the House Appropriations Subcommittee on HHS and the House Ways and Means Committee. The questioning in the Republican-controlled House follows recent hearings in the Senate.


Yesterday, Rep. Brett Guthrie (R-KY), chair of the House Energy & Commerce health subcommittee hearing asked Becerra whether the plight of small businesses and the impact on innovation was considered when the administration included expanded drug price controls in their latest budget proposal. “Most innovation comes from small businesses,” Guthrie said, “and they really need venture capital to move forward.” He maintained that drug price controls are already hurting investment in innovative research.

On Tuesday, Ways and Means Chair Jason Smith (R-MO) said Biden’s budget “doubles down” on innovation-killing price controls contained in the Inflation Reduction Act (IRA), making “access and affordability of care worse.” He said that treatments for rare eye diseases and certain blood cancers are already suspending research due to the price provisions in the IRA. Also at that hearing, Rep. Kevin Hern (R-OK) said price controls threaten the goals of the Orphan Drug Act.

Members of Congress express concern about PBMs

The Ways and Means hearing also addressed concerns about PBMs, with Rep. Nicole Malliotakis (R-NY) complaining of the outsize market control they wield. She asked Becerra why the HHS has been “on the sidelines” instead of investigating apparent market distortions caused by PBMs.

Becerra replied that the HHS continues to try to address the problem, even though past efforts have resulted in litigation by the PBMs.

During the March 28 Appropriations Committee hearing, Rep. Jake LaTurner (R-KS) also brought up PBMs, saying they use the 340B program to distort drug pricing.

Also on Tuesday, Guthrie’s Energy and Commerce Health Subcommittee held a hearing on “Transparency and Competition in Healthcare,” where PBMs were a major topic. Guthrie opened the hearing by saying the U.S. spends 31% of health expenditures on hospitals, 20% on physicians, and 9% on prescription medications, and called on lawmakers to make PBMs “more transparent.” Health Subcommittee Ranking Member Anna Eshoo (D-CA) echoed Chair Guthrie’s support for further examination of PBMs, saying she wants to work with Republicans on PBM reform.

PBM transparency legislation is already moving ahead in the Senate, as Bio.News reported last week.

CMS, Accelerated Approval, and other concerns

Reps. Chuck Fleischmann (R-TN) of Appropriations and Vern Buchanan (R-FL) of Ways and Means asked why the Centers for Medicare & Medicaid Services (CMS) limited coverage of Alzheimer’s drugs that were accepted for the Food and Drug Administration (FDA) Accelerated Approval pathway, when the Veteran’s Administration has determined they should be covered. Although Becerra said CMS would give coverage when the drugs receive traditional approval, Fleischmann noted that the CMS generally covers drugs approved under the Accelerated Approval pathway.

Brian Fitzpatrick (R-PA) touched on the same theme in Tuesday’s Ways and Means hearing. He said one of his constituents had been using one of these Alzheimer’s drugs but the patient’s access to the drug was blocked when CMS decided for the first time it would severely limit coverage of an FDA-approved drug.

Also on Tuesday, members of Congress brought up pandemic preparedness, with Republicans demanding HHS do more, as well as antimicrobial resistance, with Secretary Becerra agreeing we need alternative pricing mechanisms (like the PASTEUR Act).

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