House hearing on lowering drug prices examines drug supply chain

The House Energy and Commerce Subcommittee on Health today held a hearing on lowering prescription drugs prices, which focused on the drug supply chain.
 
Testifying at the hearing, Lynn Eshenbacher, chief pharmacy officer for St. Louis-based Ascension health system, said that “manufacturers have almost no incentive to offer negotiated price concessions or other contracting accommodations to providers” due to a “lack of meaningful competition” in the prescription drug market. “As a result, in the span of only four years, Ascension alone has had to mitigate against a 34 percent increase in drug costs, totaling $564 million in additional costs for providing care to the patients we serve,” she said.
 
While patients may not feel the immediate impact of higher drug costs during an inpatient stay, “these cost increases nonetheless have a real and measurable impact on the patient,” Eshenbacher said. “In the longer term, an increase in pricing will be felt by all patients as increased costs will eventually contribute to higher insurance premiums or higher out-of-pocket costs for patients.”
 
Eshenbacher explained that bundled payment amounts are set and remain unchanged throughout the year, so when the price of a drug increases in a given week or month, that newly added cost must be immediately absorbed by the hospital.
 
Also testifying at the hearing were drug makers, pharmacy benefit managers, Blue Cross Blue Shield of North Carolina, the American Medical Association and AARP.