At Hearing, Warren Calls on Biden Administration to Strengthen and Quickly Finalize ‘March-In Rights’ Framework to Boost Competition and Lower Prescription Drug Prices
“There’s no reason why Americans should have to pay more for prescription drugs than anywhere else in the world, especially when American taxpayers contribute billions of dollars to research and development for those same drugs. ”
Washington, D.C. — Today, at a hearing of the Senate Committee on Finance, U.S. Senator Elizabeth Warren (D-Mass.) questioned Health & Human Services (HHS) Secretary Xavier Becerra on the Biden administration’s proposal to boost competition and lower prices on drugs that American taxpayers helped pay to develop.
Under existing law, the federal government may “march-in” on inventions – including prescription drugs – created using taxpayer dollars when those products are not available to the public on “reasonable terms” — but this authority has never been used. Released in December, the draft framework provides guidance to help agencies evaluate when to exercise march-in rights, including when a product is unreasonably priced.
In her questioning, Senator Warren stated that American taxpayers invest $115 billion annually for research and development, including $54 million for biomedical research, yet pay triple for the drugs developed with those resources compared to people in other countries. In response to a question from Senator Warren about the impact of this proposal, Secretary Becerra replied that it “would make the pharmaceutical industry far more competitive” and “unlock access to some very crucial medications for more Americans.”
Senator Warren concluded by urging the Biden administration to strengthen and finalize the march-in guidance as soon as possible.
Transcript: The President’s Fiscal Year 2025 Health and Human Services Budget
U.S. Senate Committee on Finance
Thursday, March 14, 2024
Senator Elizabeth Warren: Thank you, Mr. Chairman.
So, President Biden is working to lower drug prices for Americans. And now, for the first time, look at the list: Medicare can negotiate the price of prescription drugs, drug companies can face penalties when they hike prices above inflation, insulin copays are capped at $35 for seniors and people with disabilities, and all out of pocket costs for prescription drugs will be capped at $2,000 for Medicare beneficiaries beginning next year.
Now, President Biden wants to double down on this progress by ensuring that people who don't have Medicare feel the same relief, and I am all for it. There is no reason why Americans should have to pay more for prescription drugs than anywhere else in the world, especially when American taxpayers contribute billions of dollars to the research and development for those same drugs.
Secretary Becerra, do you know how much American taxpayers invest in medical research and development every year? Drug research and development?
Xavier Becerra, Secretary, U.S. Department of Health & Human Services: Senator, I hope you have that number. I know it's a big amount, but I can get it to you if you don't have it.
Senator Warren: That's okay. I actually do have it. It's about $115 billion, of which $54 billion is for biomedical research. That's in a single year.
And I think this money is well spent. I'm a big fan. It supports the scientific research that we need to develop new therapies and new cures. But the problem is that Big Pharma takes these discoveries, turns them into drugs that they can market, and then charges Americans nearly triple what they charge other nations to access the very same drugs that American taxpayers helped develop.
So, Secretary Becerra, do you think that Americans should have to pay more for drugs that their tax dollars helped develop than other people around the world?
Secretary Becerra: Senator, first, in the spirit of competition, we should be able to get prices that everyone else gets. But secondly, if we put some skin in the game, we should probably be able to get a far better price.
Senator Warren: That's, I like your approach on this.
You know, charging Americans this much for drugs when we're the ones who help pay to develop those drugs, it's just greed, pure and simple. And the Biden administration wants to do something about it.
So, in December, it released a proposal that would allow more companies to produce a drug that taxpayers helped develop if the original drug manufacturer jacked up the price so much that people can't afford it. As you know, this is called march-in rights. And it would inject some competition into the market, and lower drug prices for families.
Now, this law has been on the books for over 40 years, but it has never, never been used, in large part because Big Pharma has spent millions of dollars trying to convince policymakers that a drug's price has no impact on whether or not patients can access it.
But I gotta say, any person who is forced to make difficult decisions between affording their medication and paying rent or trying to put food on the table will tell you that argument is wrong. That if you can't afford to buy the drug, then you don't have access to it.
So, Secretary Becerra, if this draft framework that the Biden administration is working on right now is finalized, what impact would that have for American families?
Secretary Becerra: Senator, our belief is that this would make the pharmaceutical industry far more competitive. It would also prevent the lockout of manufacturers who are willing to actually sell for competitive prices, and it will probably unlock access to some very crucial medications for more Americans.
And so, on the whole, I think what we're trying to do is fulfill the character of this nation to have competition drive what people get.
Senator Warren: All right. I like this, and I very much appreciate your work on this.
In February, I sent a letter with over 70 of my colleagues in the House and the Senate urging the administration to strengthen and to quickly finalize this proposal that would have the benefits that you describe. It would stop Big Pharma’s price gouging and ensure that Americans can access the life saving drugs that their tax dollars help discover.
So, please, get this done as quickly and effectively as you can.
Secretary Becerra: We will try.
Senator Warren: Good.
Thank you, Mr. Chairman.
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