Per-capita prescription drug spending in the United States, the highest in the industrialized world, increased by 12.2 percent in 2014. News of rising drug costs has met with public scorn and calls for reform. In an August 2015 poll, nearly three in four Americans said the cost of prescription drugs was “unreasonable.”
Presidential candidates have capitalized on public pressure by issuing policy proposals aimed at containing drug prices. Among other measures, Democratic candidates have called for Medicare to be allowed to negotiate prices directly with drug manufacturers. They have also called for the importation of prescriptions from Canada and prohibition “pay-for-delay” agreements that restrict the introduction of generic equivalents to brand-name drugs. Republicans have called for greater transparency on prescription drug pricing and regulatory reforms to reduce the cost of generic drug approval.
The majority of these reform proposals would require Congress to take legislative action making substantive changes in policy. As the history of health reform suggests, however, Congress can be slow to act, even in the face of public outcry and presidential initiative; rather, significant legislative change is often the result of sustained attention over a long period of time.
Indeed, despite indications of renewed public attention to the rising cost of prescription drugs, Congress has actually paid little attention to and spent scant time on this issue in recent years. That much was clear when we examined data on congressional attention to prescription drugs, in the form of bill introductions during the period 1993-2015.
In fact, we found that bill introductions on prescription drugs overall have declined in recent years, especially in comparison to other salient health issues (Exhibit 1) [Note 1]. While federal agencies and market actors appear to be invested in solving the problem, addressing Americans’ urgent concerns about the rising cost of prescription drugs will require greater congressional attention than exists at present. As we suggest, there are also several key mechanisms that could help to increase and sustain congressional attention in the near future.
Declining Attention To Prescription Drugs
Between 1993 and 2002, prior to consideration of the Medicare Modernization Act (MMA) of 2003, which created the Medicare Part D drug benefit, bill introductions with titles specifically mentioning prescription drugs increased by over 1,000 percent, to a greater degree than bill titles with reference to health insurance, which increased by 133 percent. Yet bill introductions related to prescription drugs have waned since the passage of the MMA in 2003 and during a period of slow growth in drug spending.
Between 2005 and 2014 alone, bill titles mentioning prescription drugs decreased by 76 percent, more steadily than bills with titles referencing health insurance. In the current (114th) Congress, for example, 66 bill titles reference health insurance, while only 26 reference prescription drugs.
Exhibit 1. Bill introductions on prescription drugs and health insurance, 103rd-114th Congresses and annual % change in prescription drug spending
Sources: Bill Introductions: Authors’ calculations from Thomas.gov. See Appendix for search strategy; Prescription Drug Spending: Authors’ calculations from CMS National Health Expenditure Projections Data
Note: The 2015-2016 rate of change is based on CMS projections.
Fewer Bills Related To Drug Prices
Second, while members of Congress introduced numerous bills specifically addressing drug prices during and immediately after the 2003 development of the MMA, there has been a significant drop off in legislation since 2010 and committee consideration of these bills has also declined (Exhibit 2) [Note 2].
Bill introductions on prescription drug prices hit their peak in 2003 and 2004, when members of Congress introduced 45 pieces of legislation on the subject. Twenty-four of those bills received formal consideration by at least one congressional committee.
Yet attention to this specific issue began to diminish after the passage of the MMA. Between 2005 and 2014, the number of bills introduced fell by 78 percent. Over the same time period, bills dealing with drug prices receiving formal consideration by Congress decreased by 129 percent.
Exhibit 2. Bill introductions on drug prices, 103rd-114th Congresses
Source: Authors’ calculations from Thomas.gov. See Appendix for search strategy.
In general, legislative action in 2015 has followed a declining trend, with 14 bills introduced in the 114th Congress (Exhibit 3). Of these 14 bills, six would allow for the direct negotiation of drug prices within Medicare Part D. Another six pieces of legislation would require either greater transparency on the part of drug manufacturers, oversight of pharmacy benefits managers, or measures to guard against waste, fraud, and abuse. Additionally, four bills put into place requirements for rebates by drug manufacturers.
It is worth noting that in 2015 all but two of pieces of legislation contain only one policy proposal. The two comprehensive reform packages were authored by Rep. Elijah Cummings (D-MD) and presidential candidate Sen. Bernie Sanders (I-VT).
Exhibit 3. Drug Price Bills Introduced in the 114th Congress
Source: Authors’ coding of bills from Thomas.gov. See Appendix for search strategy.
Potential Explanations For Declining Attention
There are a variety of potential explanations for Congress’s declining attention to drug prices. Each may inform different approaches to stimulating policy action.
First, the emergence of high-cost specialty drugs as the key driver of pharmaceutical expenditures has occurred at a pace that US political institutions are not designed to keep up with. Specialty drug approvals exceeded traditional drug approvals for the first time in 2010. By 2014, specialty drugs accounted for 27 of 51 FDA approvals.
Accentuating the impact of these changes, patent-exclusivity regulations have constrained price competition for biological drugs. Addressing these rapid market changes through the US legislative process requires navigating numerous institutional hurdles in a context of partisan gridlock; in recent years, only around 8 percent of bills introduced in Congress are eventually passed. As a result, it would be unsurprising if pharmaceutical policies—like many other policies in the US—fail to adapt to changes in the marketplace.
A second hypothesis is that the passage of Medicare Part D itself has contributed to policy inertia on prescription drug prices. As a direct result of Part D, Medicare now accounts for over 28 percent of national pharmaceutical expenditures. These new revenues may help to subsidize lobbying by a sector that has a vested interest in preserving the status quo. Additionally, by expanding access to prescription drugs while delegating policy implementation responsibility to the private sector, Medicare Part D may have enabled Congress to shift its attention away from prescription drugs and on to other policy issues.
Third, after the enactment of Medicare Part D, falling prescription drug spending and the satisfaction of some policy constituencies may have incentivized members of Congress to focus on other issues.
How To Get Congress’s Attention
While it may be difficult to sustain congressional attention to an issue like prescription drug prices for long enough to propel a major reform initiative, there are several sources of increased attention outside Congress which could eventually translate into more sustained action. Presidential platform initiatives, for instance, could very well open a “window of opportunity” for significant reform.
Another path that advocates of reform are pursuing focuses on building a better understanding of the need for cost control efforts and potential bipartisan solutions to the problem. Several policy proposals currently in Congress require pharmaceutical manufacturers to disclose information on their production and marketing costs (Exhibit 3). Such transparency programs have led to significant changes in policy or market behavior in other arenas, as in the cases of corporate financial disclosure and restaurant hygiene quality.
Second, there is evidence of significant policy action taking place within the Medicare and Medicaid programs as well as action that state governments are taking independently. States are particularly significant venues for reform because, while they have traditionally regulated insurance markets and provider licensing, drug regulation has either occurred in the marketplace itself or at the federal level.
Even so, states have numerous opportunities to shape national policy on prescription drug prices. Massachusetts, Montana, and Oregon are considering measures to use their regulatory authority to force pharmaceutical manufacturers to disclose pricing practices. To inform purchasing decisions within their Medicaid programs, a number of states have also joined two multi-state comparative effectiveness review projects managed by the Oregon Health & Science University: the Medicaid Evidence-Based Decisions Project and the Drug Effectiveness Review Project.
Other states, including North Carolina, are updating their Medicaid Maximum Allowable Cost (MAC) programs, which establish maximum reimbursement amounts for certain multiple-source drugs, to ensure that prices reflect up-to-date information on wholesale costs and availability for purchase.
Whether or not presidential initiatives and pressure from state governments can sustain congressional attention remains to be seen. In any case, it seems clear that advocates of controlling the cost of prescription drugs may need to look outside Congress itself for support.
Yet without federal action, these efforts may ultimately lead to persistent variation in the regulatory environment for pharmaceutical firms, and costs to health care payers and consumers.
For this analysis, we queried Thomas.gov for all congressional bill introductions in the years 1993-2015 with titles that specifically mentioned prescription drugs (N= 803). The unit of analysis is the two-year legislative session. For purposes of comparison, we also examined all bill introductions that did not mention prescription drugs at all, but whose titles mentioned health insurance, another salient policy issue (N=1,239).
For this analysis, we queried Thomas.gov for all bill introductions between 1993 and 2015 that specifically mentioned the narrower issue of drug prices (N=253) at any point in the text. To further evaluate trends in congressional attention to the issue of drug prices, we subset these bills to identify those that received consideration by at least one congressional committee (N=153). We also closely examined the content of current legislation on prescription drug prices (N=14).
The views expressed herein are those of the author alone and do not necessarily represent the views of the Department of Veterans Affairs or the US Government.