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Statement: Promoting Competition to Lower Medicare Drug Prices

House Ways and Means Health Subcommittee

March 7, 2019

ASHP (American Society of Health-System Pharmacists) respectfully submits the following statement for the record to the House Ways and Means Health Subcommittee hearing on “Promoting Competition to Lower Medicare Drug Prices.”

ASHP represents pharmacists who serve as patient care providers in acute and ambulatory settings. The organization’s nearly 50,000 members include pharmacists, student pharmacists, and pharmacy technicians. For more than 75 years, ASHP has been at the forefront of efforts to improve medication use and enhance patient safety.

ASHP’s vision is that medication use will be optimal, safe, and effective for all people all of the time. A primary tenet of that vision includes access to affordable medications needed to save or sustain lives. Addressing the issue of skyrocketing drug prices, including excessive price increases on commonly used generic medications, is one of ASHP’s highest and longstanding public policy priorities. According to a Kaiser Health Tracking Poll, 1 in 4 Americans cannot afford their medications.1 Poor access to medications can lead to increased morbidity and mortality, and can cause healthcare costs to increase.

ASHP has been proactively addressing challenges related to the rapid increase of prescription drug pricing on several fronts, including working with like-minded stakeholders and educating members of Congress about the unsustainable burdens faced by patients, healthcare providers, and the entire healthcare system.

ASHP is a lead member of the Steering Committee of the Campaign for Sustainable Rx Pricing (CSRxP), a coalition of prominent national organizations representing physicians, consumers, payers, hospitals, health systems, and patient advocacy groups. CSRxP has developed a policy platform promoting market-based solutions supported by three pillars: competition, value, and transparency.
The goal of the campaign is to identify policy options that have bipartisan support and, therefore, a greater likelihood of passage. To that end, CSRxP focuses on policies to incentivize a more competitive marketplace to help stimulate lower drug prices. The campaign has also expressed support for efforts to loosen restrictions that prevent generic drug companies from obtaining the samples necessary to manufacture a competing product.

ASHP, along with the American Hospital Association (AHA) and the Federation of American Hospitals (FAH), recently released a report on the impact that the cost of and access to prescription drugs are having on hospital budgets and operations.

Specifically, the report showed that:

  • Average total drug spending per hospital admission increased by 18.5% between fiscal year (FY) 2015 and FY2017.
  • Outpatient drug spending per admission increased by 28.7%, while inpatient drug spending per admission increased by 9.6% between FY2015 and FY2017.
  • Hospitals experienced price increases of over 80% across different classes of drugs, including those for anesthetics, parenteral solutions, and chemotherapy.
  • Over 90% of surveyed hospitals reported having to identify alternative therapies to manage spending.
  • One in 4 hospitals had to cut staff to mitigate budget pressures.

ASHP does not collect, store, or report drug pricing information. However, we continually hear from pharmacy leaders in hospitals and health systems that sudden, inexplicable, and unpredictable price increases in connection with some of the most commonly used, longstanding generic medications are becoming more prevalent — and are occurring on a nationwide basis.


Increasing generics competition could not only reduce out-of-pocket costs, but also significantly strengthen the medication supply chain. Specifically, in 2018, clinicians faced acute shortages of the most basic generic products necessary for almost all patient care, including sterile water, sodium bicarbonate, small-volume parenterals, and injectable opioids. Such shortages jeopardize patient safety and siphon clinician resources away from direct patient care to shortage management, resulting in significant systemic costs, including increased prices. We urge the committee to explore means to incentivize generic competition and manufacturing upgrades to reduce and eventually eliminate shortages. In coordination with a number of other healthcare stakeholders, ASHP developed recommendations for addressing shortages, which may provide a helpful starting point.23 Shortages remain a top-priority issue for pharmacists and their patients, and we stand ready to assist in any way possible to address this critical public health problem.

Additionally, although drug shortages are caused by a number of factors, when drugs in short supply are produced by only one or two manufacturers, prices increase. Stimulating market presence could help temper these price spikes. Thus, ASHP urges the committee to look at ways to incentivize marketplace participation. ASHP supports bills such as S. 64, the “Preserve Access to Affordable Generics and Biosimilars Act.” This bipartisan bill would potentially increase competition by prohibiting companies from engaging in “pay-to-delay” tactics to stifle generic and biosimilar entry into the market.

Finally, we note that, in some cases, Risk Evaluation and Mitigations Strategies (REMS) have been used to circumvent generic competition. ASHP recognizes that manufacturer-driven REMS are necessary to ensure the safe use of certain medications. However, REMS programs should never be used to artificially inflate drug prices, nor should they interfere with the professional practice of pharmacists, physicians, nurses, and other providers. We believe there are cases in which manufacturer-driven REMS programs that require restricted distribution directly impact pricing, thereby increasing costs, reducing patient access, and delaying treatment. There is also evidence to suggest that the use of restricted or limited distribution channels has resulted in the inability of a potential competitor to acquire enough of a drug to conduct the required testing to bring a generic competitor to market. For this reason, we support bills such as S. 340, the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2019.” The CREATES Act will help ensure that brand-name pharmaceutical companies cannot manipulate regulatory rules to prevent competition, which is essential for patient access to affordable medications. Additionally, we recommend that Congress require the Food and Drug Administration (FDA) to investigate the use of restricted distribution REMS as a means to artificially increase drug prices and limit access to critical medications.


Drug importation has been floated as a competitive solution to the increasing prices of both generic and brand medication. A number of bills introduced in the House of Representatives (H.R. 478, the “Safe and Affordable Drugs from Canada Act of 2019” and H.R. 447, the “Affordable and Safe Prescription Drug Importation Act”) would allow for importation of prescription drugs by individuals, wholesalers, or pharmacies. ASHP does not support these bills, as they put patients at unnecessary risk. ASHP’s professional policy on prescription drug importation is as follows:

To advocate for the continuation and application of laws and regulations enforced by the Food and Drug Administration and state boards of pharmacy with respect to the importation of pharmaceuticals in order to (1) maintain the integrity of the pharmaceutical supply chain and avoid the introduction of counterfeit products into the United States; (2) provide for continued patient access to pharmacist review of all medications and preserve the patient-pharmacist-prescriber relationship; and (3) provide adequate patient counseling and education, particularly to patients taking multiple high-risk medications; further,

To urge the FDA and state boards of pharmacy to vigorously enforce federal and state laws in relation to importation of pharmaceuticals by individuals, distributors (including wholesalers), and pharmacies that bypass a safe and secure regulatory framework.4

We urge the committee to carefully consider how any bill that includes an importation policy could negatively affect a drug’s pedigree and potentially allow adulterated and/or counterfeit drugs into the supply chain. Importation is in direct conflict with the Drug Supply Chain Security Act passed by Congress in November 2013, which sought to better track and trace drugs through the supply chain. ASHP understands that bills to allow for importation seek to create access to lower-cost medicines. We believe, however, that safer and more comprehensive means to improve affordability and accessibility are needed.


ASHP thanks the Ways and Means Health Subcommittee for holding this important hearing. ASHP remains committed to working with Congress and industry stakeholders to ensure that patients have affordable access to lifesaving and life-sustaining medications.


1DiJulio, Bianca, et al. “Kaiser Health Tracking Poll: August 2015.” The Henry J. Kaiser Family Foundation, The Henry J. Kaiser Family Foundation, 20 Aug. 2015, Accessed February 10, 2019.
2See ASHP, Drug Shortages Roundtable Report (Nov. 6, 2017), available at
3See ASHP, Drug Shortages as a Matter of National Security: Improving the Resilience of the Nation’s Healthcare Critical Infrastructure (September 20, 2018), available at
4ASHP Policy 0413, Importation of Pharmaceuticals.