WASHINGTON DC (March 5, 2020) — Prepared Floor Remarks by Senator Charles "Chuck" Grassley, Chairman, Senate Finance Committee:
A new study showed that from 2007 to 2018, prices for hundreds of drugs rose many times faster than the rate of inflation.
List prices on 602 medicines rose by 159%, or 9% annually.
After discounts and rebates, net prices increased by 60%, or 4.5% annually.
That’s 3.5 times the rate of inflation.
These are drugs for multiple sclerosis, cholesterol, rheumatoid arthritis, chemotherapy, diabetes, and many more debilitating and life-threatening conditions.
Put into real terms, that means that if one of these drugs cost $100 a month in 2007, it cost $259 in 2018.
Meanwhile, wages for the average American over the same time period increased about 30% in the private sector.
That means wage growth is about half the rate of growth in prescription drug prices — even after rebates and discounts.
For many, increased drug costs are wiping out progress they are making in wages.
Some families are even going backward financially after paying for their prescriptions.
And this doesn’t take into account the many other increases in the cost of living, from college to housing to insurance.
Now, Americans are surely fortunate to see the significant wage-growth that they have under President Trump.
And the president and Republicans in Congress can rightly take credit for the country’s booming economy.
But all that wage growth doesn’t mean as much if it’s spent on the same prescription-drug refills every month.
That’s something that ought to concern every member of Congress.
Let’s be clear: These price hikes aren’t because the medicines got better or there was a significant increase in research and development.
No, this was because the pharmaceutical companies could do it and get away with it.
Because in many cases, consumers don’t have choice.
They don’t have options or alternatives.
That’s because we don’t have a healthy marketplace that drives down costs.
Right now, pharmaceutical companies can essentially charge Medicare whatever they want.
And tax-payers don’t have much recourse.
Right now, every single working American who pays federal taxes is subsidizing Big Pharma’s record profits.
Ranking Member [Ron] Wyden and I are working to put some common sense back into the system.
In the Finance Committee, we’ve passed bipartisan legislation to put an end to unlimited corporate welfare for Big Pharma.
And we’re closer than ever to lowering drug prices for tens of millions of Americans.
But Big Pharma and its paid allies are out in force trying to kill any reforms that might endanger their profit margins.
They’re using scare tactics and deploying terms like “socialism” and “price controls.”
I’ve been around long enough to recognize these political games.
Let’s set the record straight: the last thing Big Pharma wants is a free market.
After all, these were the same folks who loved Obamacare because it mandated another revenue stream for their products.
Big Pharma is also warning that any reform would hurt research and development.
In fact, my bipartisan legislation with Sen Wyden would result in less socialism, a more competitive marketplace and wouldn’t put a damper on innovation.
And that’s according to the independent Congressional Budget Office.
For those who may not believe a politician, let me point to the work the professionals at CBO have done on my bill.
The updated Grassley-Wyden bill will save more than $80 billion and result in no fewer cures.
It’ll reduce patient out-of-pocket spending in Part D by around $50 billion.
It’ll reduce premiums by about $1 billion for the tens of millions of seniors and Americans with disabilities on Medicare.
And that’s all on top of a cap on out-of-pocket expenses and an end to the dreaded donut hole.
We’ve also created a new way to spread out payments for those out-of-pocket expenses so that paying the bills every month becomes a bit easier for those on a fixed income.
The bipartisan Prescription Drug Pricing Reduction Act would protect tax-payers from being put on the hook for unlimited price hikes that have no basis in a functioning free market.
Without reforms, big pharmaceutical companies will continue to receive tens of billions of dollars in excess tax-payer subsidies.
And they will have no incentive to keep prices from rising many times faster than inflation.
Currently, prescription-drug manufacturers can charge Medicare more and more every year.
And tax-payers are forced to foot the bill.
Grassley-Wyden enacts accountability and ends corporate welfare without harming medical innovation.
We plan on reintroducing our bipartisan bill very soon.
So far, a dozen Senate Republicans have announced publicly that they support this bipartisan bill.
Others will announce their support in the coming days.
A dozen more Republican senators have indicated to me that they would vote for it on the Senate floor.
I’m optimistic that we’ll continue to gain support as senators learn more.
President Trump, Vice President Pence, and Secretary [Alex] Azar have all endorsed our bill.
It deserves a vote on the Senate floor soon.
I urge my colleagues on both sides of the aisle to speak with me about this bill and how it will help all of our constituents.
We’ve all pledged to lower prescription-drug prices.
Let’s follow through on that pledge.