During Tuesday’s Senate Finance Committee hearing, Sen. Maria Cantwell (D-WA) questioned HHS Nominees James O’Neill and Gary Andres about NIH funding.
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00:00Mr. Chairman, Mr. O'Neill, do you support the proposed $18 billion cuts to NIH funding?
00:07Senator, I had no involvement in the development of any proposed budgets.
00:14I think it's important to pursue gold standard research and
00:19anything we can do to
00:22improve NIH, ensure that it's promoting gold standard research, ensuring that it's funding research that replicates
00:29seems completely reasonable to me.
00:32Does that mean, you mean, the proposed cuts seem reasonable because there's some stuff we're doing that isn't gold standard?
00:39Senator, I believe the president's proposal for NIH
00:43suggests combining some separate institutes of NIH into single institutes where the functions belong together to reduce duplication.
00:53That would cut $18 billion?
00:56Senator, I haven't had a chance to review the details that went into the budget.
00:59All I can say is I did not participate in that decision.
01:02Senator, I'm looking for a little bit of philosophy here.
01:07I come from a part of the world where we like innovation.
01:09We certainly like NIH investment in that because we look at it and say,
01:15how are we going to reduce these unbelievable costs of a baby boomer population reaching retirement and having a huge demand?
01:21So places like the University of Washington done incredible work on Alzheimer's research.
01:26So we're going to strive to solve these huge health care costs by innovation, not by short-cutting innovation.
01:34Can I ask you about PBMs?
01:36They're a similarly challenging issue.
01:41As more and more people, as I mentioned, reached retirement, we have to figure out ways to lower costs.
01:45And according to the Federal Trade Commission, the largest PBMs imposed a significant price markup.
01:51In one example, PBMs marked up a drug to treat hypertension by 7,736 percent.
01:58And the report also found that PBMs generated $1.4 billion from spread pricing, a practice that where basically the PBMs and the payers, such as Medicare, they basically pocket the savings themselves as opposed to passing them on.
02:18So that's why Senator Grassley and I have supported legislation.
02:23This committee has supported legislation.
02:25Do you support efforts to increase transparency and accountability in the PBM market, including things like Senator Grassley and I's Transparency Act?
02:38Senator, I think health care is too expensive.
02:41If the costs of drugs are part of what's too expensive, I would support much more competition in drugs in order to drive down prices, and competition and transparency throughout the drug supply chain and pharmacy supply chain is very reasonable.
02:56Okay, so that's a yes you support the legislation?
03:01Well, I haven't read your exact proposal.
03:03If you would, for the record, that would be so helpful.
03:06And did somebody ask you about the negotiation on price earlier?
03:10Has anybody, Senator Wyden, I would assume, but no?
03:13No, Senator.
03:13What are your thoughts about that, the legislation that we passed, and the notion that we too can be a market, just as we are with the veterans and being able to negotiate?
03:24Senator, it's been an interesting experiment, allowing and authorizing CMS to negotiate prices for some drugs.
03:33I think CMS and HHS overall should do its best with that power that Congress has given it to bring down costs of drugs for taxpayers, as well as for other patients whose prices depend on CMS decisions, and as long as that's the law, I will support enacting it as vigorously as possible in order to promote competition.
03:59And what about, there's similar market creation that we, power that we gave to states, like the basic health plan to negotiate on behalf of, you know, basically bundling a population that probably didn't have market clout.
04:11Would you similarly support that?
04:12Senator Wyden, I'm not as familiar with that.
04:14Senator Wyden, I'm not as familiar with that, but I definitely support the principle that states are laboratories of innovation, it's good for them to innovate and try to improve delivery for their residents, as well as use of their funds, so I'm broadly sympathetic to the philosophy.
04:32Senator Wyden, Okay, so yeah, I'll take that, I'll get you a little more detail for the record, but the fact that states just like CMS could be a source of creating a market, a hard to serve market, albeit, and that's why the basic bundling of the customer base, in my opinion, is way more effective than telling people to go search on an online site.
04:53Senator Wyden, And that bundling allows you to then give to those who want to serve that ability to have the certainty of a customer base, and so you drive down the price.
05:05Senator Wyden, I love the philosophy, Senator.
05:07Senator Wyden, Thank you. Thank you, Mr. Chairman.