Rep. Anna Eshoo, D-Calif., chair of the House Energy and Commerce Health Subcommittee, started and ended a more than four-hour — sometimes rancorous — hearing to vet Speaker Nancy Pelosi's drug pricing legislation by assuring Republicans they would have ample opportunity to suggest changes to the bill.
"I will do my utmost so we have a process here that is a solid one — the way it should be done," Eshoo pledged.
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But she also told Republicans, "That doesn't mean that everyone is going to agree with everyone."
"We may have some differences and we need to respect that with one another," the California Democrat said at the Sept. 25 hearing — the first to publicly examine the Pelosi bill, unveiled last week.
Rep. Greg Walden, R-Ore., ranking member on the House Energy and Commerce Committee, said members of his party had been working with Democrats on the panel on policies that essentially mirror about 90% of the legislation adopted in July by the Senate Finance Committee and about 92% of what the upper chamber's Health, Education, Labor and Pensions passed in June.
But when Democratic leaders introduced Pelosi's bill — the Lower Drug Costs Now Act (H.R. 3) — "those bipartisan negotiations came to an abrupt halt," Walden said.
He and other Republicans at the hearing complained the legislative process on the Pelosi package was moving too quickly.
Democratic leaders said they wanted the bill on the House floor for a vote by the end of October.
But Eshoo said there would still be time for her subcommittee to go through "regular order," with a full markup amendment session by her panel followed by a similar process at the full committee.
She noted other House committees will also be examining the Pelosi bill at other hearings, one of which will be held Sept. 26 by the Health, Employment, Labor and Pensions Subcommittee.
An election issue
Senate Finance Chairman Chuck Grassley, R-Iowa, told reporters on Sept. 25 there was a "good chance" a vote on his bill may not happen until early next year. Later in the evening, Grassley and Sen. Ron Wyden, D-Ore., the Finance Committee ranking member, released the statutory text of their bill, which they said "mirrors" the legislation adopted by their panel.
Grassley emphasized that getting something done on drug pricing would be critical for Republicans to retain the Senate in 2020.
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Eshoo reminded Republicans on her panel that President Donald Trump had praised H.R. 3 on Twitter. Pelosi's bill includes a measure that echoes Trump's plan to use a foreign pricing model for setting U.S. prices, though his idea is more limited.
"We have our work cut out for us," Eshoo acknowledged. "I see where the different fissures are, but that doesn't mean we can't stretch ourselves to see if we can't come together because we all care about it."
Witnesses' concerns
At the House hearing, lawmakers heard from a panel of three witnesses, including Benedic Ippolito, a research fellow in economic policy studies at the American Enterprise Institute, who said the penalties in Pelosi's bill for not negotiating were "so severe" that it may deter investment in the drug industry, which would hit small biotechs particularly hard.
Venture capitalists have no allegiance to the drug industry and could just as soon invest in scooter rental companies, Ippolito told the subcommittee.
Under H.R. 3, if a drug manufacturer refused to participate in any part of the negotiation process or does not reach agreement on the price of a medicine, the company would be charged an escalating penalty based on the product's gross sales. The penalties start at 65% and rise 10% every quarter the manufacturer is out of compliance, to a maximum of 95%.
Rep. Bill Flores, R-Texas, said he was concerned the penalties would drive the drug industry out of the U.S. and into places like China and India, where 80% of the active pharmaceutical ingredients for U.S. medicines are already made.
But Rep. Peter Welch, D-Vt., said the persistent claim by the drug industry that lowering their prices in the U.S. would stifle innovation was "bogus."
Ippolito suggested Congress should embrace the proposals in H.R. 3 and the Senate Finance bill to redesign the Medicare Part D prescription drug benefit, including placing a cap on beneficiaries' maximum out-of-pocket spending.
While Democrats and Republicans agree on the need for an out-of-pocket maximun for Part D beneficiaries, there is disagreement on the cap amount, said Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health.
The Trump administration has proposed a cap of $4,950, while the Senate Finance Committee bill set it at $3,100. H.R. 3 would place it at $2,000, Anderson told the subcommittee.
After examining Medicare claims data, Anderson said he and his colleagues estimated that the Trump and Finance Committee proposed caps would benefit less than 1% of Medicare beneficiaries, while the $2,000 threshold in H.R. 3 would benefit about 4%.

Rep. Anna Eshoo
Sen. Chuck Grassley