Grassley Speaks to Iowa Business Leaders on Lowering Prescription Drug Prices
Feb 14, 2020
Prepared Remarks by U.S. Senator Chuck Grassley of Iowa
Chairman, Senate Finance Committee
Corridor Business Journal Health Care Summit
Friday, February 14, 2020
Thank you for inviting me to speak at this year’s Corridor Business Journal Health Care Summit.
I’m proud of the businesses that are key to economic activity in the Corridor and across our state.
I’m here today to talk about my efforts to lower prescription drug costs.
Today marks the start of my 40th year holding an hour-long Q&A in each of Iowa’s 99 counties.
The stories I’ve heard at my 99 county meetings over the past few years are the reason I’ve made lowering the cost of prescription drugs a top priority in my role as chairman of the Finance Committee.
Far too many Iowans have to choose between paying for prescription drugs and groceries.
Many people with diabetes are dangerously rationing the insulin they need to survive.
This is unacceptable, and it has to stop.
Along with Ranking Member Wyden, I’m working to lower prescription drug costs in Medicare and Medicaid.
We held hearings.
We asked tough questions.
We sought solutions.
This process resulted in a bipartisan bill that passed the Finance Committee in July last year.
The Prescription Drug Pricing Reduction Act takes a commonsense approach by keeping what works and improving what doesn’t.
The bill modernizes the successful Medicare Part D program in a number of ways.
It caps out-of-pocket costs for beneficiaries, protecting them from bankruptcy and providing peace of mind.
It increases the incentives for prescription drug plans and drug companies to negotiate the lowest prices.
It requires drug companies that increase their price above inflation to rebate the difference back to Medicare.
This doesn’t set the price for a drug or tell a company what it can charge.
It protects taxpayers and patients from price gouging and makes Medicare more sustainable.
The bill prohibits pharmacy benefit managers, or PBMs, from the unfair practice of retroactively taking back a portion of what it paid a pharmacy long after it dispensed the drug.
Eliminating these “DIR” clawbacks lowers patient costs and provides payment predictability that is needed to run a business.
Patients who get drugs administered in the hospital outpatient department or in a doctor’s office also benefit from the bill.
The bill makes improvement to the formula that determines the Medicare Part B payment for these drugs.
These changes reduce Medicare spending and lower out-of-pocket costs for patients with serious conditions like cancer.
The bill tackles gaming in Medicaid by prohibiting PBMs from charging more than they actually pay for drugs.
It also takes the important step of allowing state Medicaid programs to pay for novel but expensive gene therapies over a period of time – instead of all upfront.
This provides states with flexibility to make sure patients can access breakthrough treatments –many of which are one-treatment cures – without blowing the state budget in any one year.
The Grassley-Wyden bill also increases transparency across the drug supply chain.
Drug companies will have to publicly justify high prices.
PBMs will have to demonstrate that they are free of conflicts of interest.
This will promote more accountability and competition.
I expect the numbers from Congress’ non-partisan scorekeeper, the Congressional Budget Office, soon.
But from what we already know, Grassley-Wyden will reduce federal spending and lower patient out-of-pocket costs by tens of billions of dollars.
It will do this without increasing beneficiary premiums.
Further, CBO has stated that the changes will reduce prescription drug spending in the commercial market.
I want to highlight that the bill has all these positive effects for patients and taxpayers while preserving the ability of drug companies to innovate.
The bill provides relief from the high cost of existing drugs without extinguishing patient hope for the next breakthrough treatment or miracle cure.
Grassley-Wyden strikes this critical balance and makes it the bill that can pass both chambers of Congress and be signed into law.
In his State of the Union address, President Trump called on Congress to put bipartisan legislation on his desk.
The President specifically mentioned my work on this bill.
Vice President Pence followed up with an endorsement of the bill the very next day.
I’ve had good conversations with Republican senators, but these recent developments provide crucial momentum.
I’m working hard to build support.
My job is to show Majority Leader McConnell that the bill can pass the Senate and that it should be brought to the floor for a vote.
When Congress passed legislation to fund the government and address other issues in December of last year, it deliberately set a May deadline to get prescription drug pricing done.
We are at a critical time. Momentum is building.
It won’t be easy, but Congress needs to act to give Iowans and all Americans the relief from the burden of prescription drug costs that they need and deserve.
Thank you again for inviting me. I’m ready for questions.