Risks. He spoke in washington, d. C. , for about an hour. Good morning, everyone. Not much going on in Health Care Policy these days, is there . My name is topher spiro. I have the pleasure today of introducing congressman pallone who has been a leader in protecting the integrity of the medicare guarantee and medicaid program, making the nations food system safer, strengthening laws to keep our air and watter cle clean. Making health care more afwordable and accessible many and supporting initiatives that advance the public health. Mr. Pallone is the Ranking Member of the house energy and commerce committee. Which has jurisdiction over issues pertaining to energy, environment, commerce, telecommunications and health care theres a lot on his plate. From 2006 to 2014 he served as the top democrat on the subcommittee of health and as chairman during the 111th congress. He played a key role in authoring and passing the Affordable Care act. Please welcome congressman pallone. [ applause ] thank you, topher. I want to thank the senate for American Progress for hosting us today. I have to say a few more thins s first of all, right now during the Health Care Debate and the republicans effort to repeal the Affordable Care act, cap has really done fantastic work in my opinion in educating people about the negative impacts of the republican repeal. Your twitter is it part of that as well. Theres so many things that the center is doing, that are being helpful. I often felt for most of the time after we passed the aca, there wasnt a lot of information going out to the public about the positive effects of it. In the last six months, thats changed dramatically to the point where very few americans jonathan, thats about the same level of favorability as our governor as you know. About 15 of the people view the republican repeal bill in a favorable light. I think that has to do with the center and other organizations out there pointing out the negative impact on the American Public and their Health Insurance. Also i mentioned when i came in, i remember, i think it was in the fall of 2015 when the center put out the report about drug pricing and the high cost of drugs. That played a major role, i think in Hillary Clintons comments and ultimately trump as well about how the high price of drugs needs to be addressed and was a priority mentioned many time tim times during the campaign. Im going to talk about drug pricing in my comments. After we sit down and topher starts asking me questions, well talk more about the aca. Obviously, i believe that what senator mcconnell is doing these last couple weeks, the changes initiated by senator cruz and others are cosmetic. If anything, they make the bill worse. Most notably, the cruz provisions that allow Health Insurance companies if they enter the marketplace to also then offer junk plans outside the marketplace. That wave the essential benefits package. 2 was bad enough when the senate bill said states could wave the essential benefits package now the cruz amendment and the latest mcconnell proposal lets it go beyond that. Even without the states waving it, the junk plans could be offered in more states. Even those that dont wave them. Well talk a little more about it. The main thing i wanted to talk about today was drug pricing, last week on the floor, we pass ed reauthorization of the fda user bills, that was for drugs and medical devices and generics, that is now the going to the senate, we expect them to take it up fairly quickly. Thats my hope, and that bill is going to help with generics, generics in my opinion are a major way to deal with drug prices effectively, the main thing that i want to stress today, the problem with drug pricing is getting worse, not better. Even though cap talked about this two years ago, even though it was part of the president ial campaign on both sides of the aisle. Even though President Trump continues to mention it from time to time, congress and the administration are not doing anything effectively about it. We have repeatedly asked our Republican Leadership on the committee to have hearings. They havent said absolutely no, but there still havent been any hearings. Not only are we not addressing this legislatively, were not even having hearings on it. We did when we passed the fda user fee bills in committee, pass a sense of congress resolution, which was done by voice vote. The committee should address drug pricing. But, you know so far you know congress. They dont have any force of law, at least they indicated they do care on the republican side, we havent set any action. Were still going to push them. So the problem is not only is the problem with higher drug prices getting worse. Not only is it outpacing other increases in health care significantly. Next year annual drug spending is expected to reach 500 billion in the United States. I can see the point, i dont even know if were there yet. At some point well probably get to the point where drugs are the majority of your health care costs. I dont think were there yet, but we could easily get there, as a result of those high prices, Many Americans face real barriers in terms of getting a medication they need. Which is why this is such an important issue. And it shouldnt be a partisan issue, we had a poll that Kaiser Family foundation released just this may, that said that 6 in 10 americans said lowering the cost of prescription drugs should be a top priority, that was democrats and republicans, when you talk about republican americans, not the people that are elected or the leadership here, just republicans in general, they feel its just as important as democrats do, which is probably one of the reasons that President Trump and Hillary Clinton talked about it during their campaign so what can be done . Let me talk about what can be done. Its complete. Some of these things are easy, talking about negotiated prices, that may sound easy, a lot of these things are more complex. I want to stress theres no Silver Bullet. The reason im mentioning a lot of Different Things, i dont think one thing alone is going to accomplish the goal or be a solution. That shows you the bureaucratic aspect of it here, this is the problem where brand Name Companies cause delay bringing generics to market. They use the rems to block access for samples of branded drugs. If the generics are going to come to market, they have to have samples of the brand name drugs. The rems program is often used by brand names to prevent that. Think dont provide the samples, you might say, is that a big problem . I think its a big problem. There was a july 2014 study conducted by matrix Global Advisers that said the ongoing use of rems cost the u. S. Health system 5. 4 billion annually. Theres probably a lot more today. So we need to provide a way of reducing the ability of the branding companies to block generics coming to market by providing access to the samples, and theres a bipartisan bill called the fast generics act that was introduced by peter welch and i forget the ready sponsor, it is bipartisan. This establishes an fda approved authorization process for generic and biomanufacturers to obtain samples of these branded products. That was something we considered during the fda markup, but it wasnt passed. We couldnt get the votes for it, we need to obviously the other thing deals with exclusivity. Some of this is going to be a little in the weeds here, i guess thats why were at the center, they get into the weeds. Exclusivity, of course, we have a process where brand names can only sell the drug. The exclusivity protects certain drug treatments from competition for a set period of time. But today drug manufacturers office retain that incentive even if theyve violated a criminal or civil law. One simple thing is to say, if you do that. Promote the unapproved use of a drug treatment. Then i think they should lose the right to exclusivity for the related products. Basically, punishing bad actors if you want. Thats the second thing i wanted to mention. Penalties for misclassification in the medicaid drug rebate program. You pay a lot. I guess you get a larger rebate, right . If you classify your product as generic, and but a lot of times we have situations where a drug company has misclassified their product as generic. And by doing that, they make a lot more money. Because they get a larger rebate. The best example of that is the epipen many. It had been classified as a generic drug and that meant they got the change was with basically they made more money. There was a settlement, which a lot of people think was inadequate. As a result, they had to pay back. I forget how many millions of dollars. 1. 27 billion is what we estimated the cost. What wed like to see is stronger penalties. So that companies have a disincentive to do the wrong thing and misclassify their product. Fourth item, the most significant and the one that you hear about the most is the medicare price negotiation, we have price negotiation with the va, with the military. We dont have it with medicare, we should give medicare the ability to negotiate prices with the Drug Companies. Thats an easy one. Its easy to explain. And President Trump during the course of the campaign and since then has said he would like to see that. The Congressional Republicans continue to oppose it. The hhs secretary is restricted from having any role in negotiating or setting prices. The first thing we would have to do is repeal that noninterference clause, so the secretary could do that. And then there are other aspects we can go into, i dont want to spend too much time that was medicare, with regard to medicaid. Medicaid, what we really need to do there, medicaid is state and federal match, right . And so the federal government if a state decides they want to negotiate prices they can. There are ways for the federal government to help them do that. Were suggesting we create a federal state medicaid negotiating tool for high cost drugs. Drug manufacturers want to sell the drugs to state medicaid agencies have to enter into rebate agreements with the secretary. Many states have tried to joining together. And cms does not have the authority to facilitate those negotiation negotiations what were suggesting is that we authorize cms and participating state Medicaid Programs to partner to negotiate supplemental rebates from drug manufacturers. Well call it a medicaid purchasing pool. That essentially would require legislation as well. I want to talk about generics in the Medicare Part d program, and the way we can provide greater financial incentives for gene c generics, in the fda user fee legislation. We did incentivize more generic competition. We did that in the user fee bill. If you want to talk about more of that, we can. There are ways to provide more financial incentives for generics, and also the rems that i mentioned before. So what were suggesting here is first of all, improvements to the part d appeals process, because a lot of people are turned down, and then they appeal, they dont know how to go about it. We have to simplify the process so seniors or the disabled dont abandon hope that they can take an apeople. We also can offer the lowest possible co payments. Right now, under Medicare Part d, weve been trying to keep the generic co payments low, and thats saved a lot of money. But its been much more difficult to do that with the low income subsidy, the lower income population, a lot of them, theyre the ones theyre the Medicare Beneficiaries that have the highest drug spending. Theyre co payment amounts of set by statute. That means that part d plans cant lower co payment amounts on their own, to encourage the use of generics as part of the program. What we would have to do is need legislation or pass legislation so that we can lower the generic co pay. Irmentioned the appeals process as well. I want to talk about a couple more medicare improvements we can make. And then topher will go to the questions part. In terms of additional medicare improvements, one of the things we can do is close the doughnut hole. We closed the part d doughnut hole over a time. That hasnt ended yet about theres still part of the donor hole that needs to be filled. I would suggest we do that two years sooner. We can reduce costs for seniors and the Medicare Program by tieing reimbursement to the most common dosage of drugs. This doesnt really relate to the opiate problem but the fact that a lot of times people would get a lot of pills, right . And they would sit on the shelf and other people would use it. What we do see is that drug manufacturers package drugs in the viles that contain too much of the drug. Youre getting more prescription drugs you dont need. Its billions of dollars, apparently. What we can do is incentivize Drug Companies to match the need of the population, that could be done by legislation as well. So and the last thing i want to talk about is transparency and accountability of Drug Companies and their prices. We have some good actors, one of them is in my district. Both johnson and johns and sanofi disclose their drug prices every year. This is an important first step, but theyre doing this voluntarily. Theyre the only ones doing this as far as i know. For the past two years of the obama administration, they set up a medicare and medicaid drug spending dashboards that provided an online tool where the public could view drug spending. And it wasnt perfect, but its obviously an effort to create transparency. And what were what i would say, is that the Trump Administration should continue this. As far as i know they havent, but they should. Because without the dashboards it would be difficult to get that Information Congress could take steps in the medicaid drug rebate program, if a manufacturer increases the price of a covered outpatient drug significantly. They basically have to report it. I would advocate that as an important step legislatively. I mean, obviously, if were going to deal with drug prices, we have to have the data as to whats actually happening with the increases, otherwise its more difficult for us to address it. We have this in other parts of the health care system. So its not that unusual to see Something Like that. The last thing i wanted to say, and well have topher come back up here, a lot of these initiatives are things im going to work with with our committee members, both democrat and republican. Try to develop comprehensive legislation. Things that would be most effective and politically more viable. There are other things out there that may be less effective or more difficult to do politically. Thats why i havent mentioned them. I dont want to suggest these are the only things. The main thing is, we need to come up with Workable Solutions to address drug pricing, to incentivize competition and encourage the development of affordable drugs. These are some of the steps we could take in that regard, and that well work on when we come back in the fall. So topher, you want to come up here . What are we doing now, you are going to ask me questions . Were going to have a little dialogue . Well, i think i want to say first of all, that i think its incredibly important that democrats have a proactive positive agenda for reform, we cant just be about opposing trump care, cant just be about russia. Its not how were going to win the election, right . I dont want to talk about russia. So we thank you for your initiative and all your work. I really think the center played a major role in this debate with their report that came out a couple years ago. Thank you. It really was sort of the start of washington thinking about this, i think. One thing you said that i wanted to ask you about, i found interesting. Was when you were talking about Committee Hearings for the drug user fee legislation. And it were going to end up having had more Committee Hearings on that legislation than on trump care. And youve been in congress a long time, right . Almost 30 years. I shouldnt mention it, but i will. Have you ever seen such a slap dash secretive process in your entire career . Let me say this, its funny, because i dont know what the circumstances were, but in the last couple weeks, i spoke at one of our energy and commerce hearings and a couple of the republicans said, here comes regular order guy. They literally called me that, somebody did, i dont remember who, thats what ive always been. I guess i got that from john dingell, we always should have a subcommittee hearing, a subCommittee Markup, a full committee hearing, a full Committee Markup before we go to rules on the floor. Thats regular order simplified. It seems like were getting further and further away from that to the point where i guess in the house, when they did their repeal, they had a full Committee Markup, nothing in the subcommittee, i dont think a hearing in the subcommittee, they went to full Committee Markup. They skipped three levels of special order, the only reason i think they did a full Committee Markup, myself and others on the democratic side kept screaming about it, mcconnell didnt even do that, he just went right to the floor. This is the problem i think a lot of times republicans get away from regular order, they dont want people to know what theyre doing, the fewer hearings and markups you have on both sides i mean, remember, if you did regular order in the house and senate, that could be 6 or 7 opportunities to look