Cicilline Chairs First Antitrust Panel Hearing on Soaring Health Care Costs

WASHINGTON – House Antitrust Subcommittee Chair David N. Cicilline (RI-01) hosted the subcommittee’s hearing today to investigate the harmful effects of consolidation and anticompetitive behavior in the health care market. The following is footage and a transcript of Chairman Cicilline’s opening remarks:

Chairman David N. Cicilline (RI-01)

House Antitrust, Commercial and Administrative Law Subcommittee Hearing: Diagnosing the Problem: Exploring the Effects of Consolidation and Anticompetitive Conduct in Health Care Markets

Opening Remarks as Delivered

March 7, 2019

Our healthcare system is in a state of crisis.

The cost of prescription medicine has increased by 200% over the past decade. Americans spend roughly $1,200 on average on prescription drugs every year, which is more than people in any other country.

The average cost of a hospital stay for a child with cancer is $40,000. The price for many types of organ transplants and post-operation treatment is more than $1 million. Even a short ambulance ride to the hospital without medical care may cost patients thousands of dollars.

These outrageous, unsustainable, and immoral costs are ruining lives. Prices are skyrocketing and people are dying or bankrupted as a result.

Kaiser Health reports that a quarter of Americans cannot afford their medicine, while many “cancer patients are delaying care, cutting their pills in half or skipping drug treatment entirely.”

Despite decades of rising costs, the United States ranks dead last in health outcomes among other high income countries.   

And for too many Americans, it is a dark reality that the life of a loved one depends on whether or not they can raise enough money on a crowdfunding platform to pay for treatment before it’s too late. Faced with no other options, Americans are left to plead to strangers for help to keep their loved ones alive.

This must end.

The American people deserve a government that is in their corner fighting for them to take on drug profiteering and other barriers to affordable healthcare. 

Ending this moral crisis is a top priority of mine as Chairman of the Antitrust Subcommittee, and a top priority for House Democrats to keep our promise to work for the people and to make healthcare affordable for everyone.

Our competition system is the backbone of promoting open and fair markets.

This competition is absolutely essential in healthcare markets.

For drug prices, the entry of generic drug competitors can reduce the cost of branded drugs significantly. In hospital and health insurance markets, consolidation threatens the quality and affordability of care.

But in too many cases, effective antitrust enforcement takes far too long to deliver meaningful results to people in need.

For example, some branded drug companies have abused safety protocols to thwart generics and to preserve their monopoly power for more than a decade. As Professor Robin Feldman has noted, even “months of delay could be worth hundreds of millions of dollars in additional monopoly revenues as the generic sits on the sideline.”

While this anti-competitive conduct should violate the antitrust laws, even successful cases are often too time consuming to provide effective relief, as the Federal Trade Commission testified before the Subcommittee last Congress.

That’s why I have introduced the CREATES Act with Chairman Nadler and Ranking Members Sensenbrenner and Collins to end these delay tactics.

The CREATES Act establishes a tailored path for generic drug manufactures to bring low-cost drugs to market.  The Congressional Budget Office estimates that the bill would result in nearly $4 billion in federal savings, along with an additional $5.4 billion in savings for consumers according to private estimates.

It’s also imperative that we examine and address other anti-competitive tactics that lead to higher drug prices.

Last week, the FTC settled a complaint against a drug company for paying off its competitor to keep out of the marketplace. According to a 2010 report by the Commission, this type of conduct—also called a pay-for-delay settlement—costs about $3.5 billion per year in the form of higher drug prices.

But this settlement occurred nearly 7 years after the Supreme Court’s landmark decision in Actavis, where it held that these settlements risk “significant anticompetitive effects,” and more than 10 years after the FTC originally filed its complaint.

It is unacceptable that it took a full decade to address this abuse of our patent system. Moreover, this egregious behavior is still taking place today. As Dr. Aaron Kesselheim of Harvard Medical School noted in his testimony before the Subcommittee last Congress, corporations continue to engage in pay-for-delay settlements in the wake of the Actavis decision, driving up the costs of prescription drugs.

I look forward to working with Chairman Nadler and Senators Klobuchar and Grassley on legislation to confront and reverse this problem.

In closing, today’s hearing is an important opportunity to examine other competitive threats that raise costs, lower quality, and reduce choice in healthcare markets. It is my hope that our discussion today can focus on continuing our work to diagnose the problems associated with consolidation and anticompetitive conduct in health care markets, as well as finding solutions to provide a better deal for hardworking Americans on prescription drugs and other health care costs.

I thank our extraordinarily esteemed members who are witnesses today for appearing before the Subcommittee. It is now my great pleasure to recognize the Ranking Member of the Subcommittee, Mr. Sensenbrenner of Wisconsin.