[House Report 117-534]
[From the U.S. Government Publishing Office]


117th Congress    }                                   {     Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                   {     117-534

======================================================================
 
   RESOLUTION OF INQUIRY DIRECTING THE SECRETARY OF HEALTH AND HUMAN 
       SERVICES TO PROVIDE CERTAIN DOCUMENTATION TO THE HOUSE OF 
REPRESENTATIVES RELATING TO THE NEGOTIATION OF PRICES FOR PRESCRIPTION 
           DRUGS UNDER THE MEDICARE PRESCRIPTION DRUG PROGRAM

                                _______
                                

 September 30, 2022.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

 Mr. Pallone, from the Committee on Energy and Commerce, submitted the 
                               following

                             ADVERSE REPORT

                             together with

                             MINORITY VIEWS

                      [To accompany H. Res. 1284]

    The Committee on Energy and Commerce, to whom was referred 
the resolution (H. Res. 1284) of inquiry directing the 
Secretary of Health and Human Services to provide certain 
documentation to the House of Representatives relating to the 
negotiation of prices for prescription drugs under the Medicare 
prescription drug program, having considered the same, report 
unfavorably thereon without amendment and recommend that the 
resolution not be agreed to.

                                CONTENTS

                                                                   Page
   I. Purpose and Summary.............................................2
  II. Background and Need for the Legislation.........................2
 III. Committee Hearings..............................................2
  IV. Committee Consideration.........................................2
   V. Committee Votes.................................................3
  VI. Oversight Findings..............................................5
 VII. New Budget Authority, Entitlement Authority, and Tax Expenditure5
VIII. Federal Mandates Statement......................................5
  IX. Statement of General Performance Goals and Objectives...........5
   X. Duplication of Federal Programs.................................5
  XI. Committee Cost Estimate.........................................5
 XII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits.....5
XIII. Advisory Committee Statement....................................6
 XIV. Applicability to Legislative Branch.............................6
  XV. Section-by-Section Analysis of the Legislation..................6
 XVI. Changes in Existing Law Made by the Bill, as Reported...........6
XVII. Minority Views..................................................7

                         I. PURPOSE AND SUMMARY

    H. Res. 1284 directs the Secretary of Health and Human 
Services to furnish to the House of Representatives copies of 
any document, audio recording, memorandum, call log, 
correspondence, or other communication in the Secretary's 
possession that refers or relates to communications by staff of 
the White House relating to the negotiation of prices for 
prescription drugs under the Medicare prescription drug 
program.

                II. BACKGROUND AND NEED FOR LEGISLATION

    On August 16, 2022, President Biden signed into law the 
Inflation Reduction Act of 2022.\1\ The law includes several 
provisions to lower prescription drug costs for Medicare 
beneficiaries and reduce drug spending by the federal 
government. Specifically, the law requires the Secretary of 
Health and Human Services, for the first time, to negotiate a 
maximum fair price for certain high-cost drugs covered by 
Medicare and requires drug manufacturers to pay rebates to 
Medicare if the price for their prescription drug under 
Medicare Part B or Part D increases faster than inflation. The 
law also caps out-of-pocket costs for Medicare Part D 
beneficiaries at $2,000 each year. Collectively, these 
provisions will drive down prescription drug costs for Medicare 
beneficiaries and lead to a reduction in over $200 billion in 
spending in the Medicare program, as estimated by the 
Congressional Budget Office.\2\
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    \1\Pub. L. No. 117-169 (2022).
    \2\Congressional Budget Office, Estimated Budgetary Effects of H.R. 
5376, the Inflation Reduction Act of 2022, (Revised Aug. 5, 2022) 
(https://www.cbo.gov/system/files/2022-08/hr5376_IR_Act_8-3-22.pdf).
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    The resolution was filed in order to obtain documentation 
from the Department of Health and Human Services pertaining to 
the negotiation of prices for prescription drugs under the 
Medicare prescription drug program. However, this resolution 
was filed before any attempt by the minority to obtain these 
documents and other information through typical oversight 
channels, including through information requests and letters. 
Instead, this resolution appears to be intended to further 
convey opposition to the prescription drug pricing reforms 
recently enacted by Congress. Therefore, H. Res. 1284 falls 
short of the standard for resolutions of inquiry set by the 
Committee in prior Congresses, and the Committee forwarded H. 
Res. 1284 to the House adversely.

                        III. COMMITTEE HEARINGS

    The Committee on Energy and Commerce has not held hearings 
on H. Res. 1284.

                      IV. COMMITTEE CONSIDERATION

    H. Res. 1284 was introduced on July 26, 2022, by 
Representative McMorris Rodgers (R-WA) and was referred to the 
Committee on Energy and Commerce. Subsequently, on July 27, 
2022, the resolution was referred to the Subcommittee on 
Health. The resolution was discharged from the Subcommittee on 
Health on September 21, 2022.
    On September 21, 2022, the Committee met in open markup 
session and ordered H. Res. 1284, without amendment, adversely 
reported to the House by a record vote of 31 yeas and 22 nays.

                           V. COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list each record vote 
on the motion to report legislation and amendments thereto. The 
Committee advises that there was one record vote taken on H. 
Res. 1284, including a motion by Mr. Pallone ordering H. Res. 
1284 adversely reported to the House, without amendment. The 
motion on forwarding the resolution adversely was approved by a 
record vote of 31 yeas to 22 nays. The following is the record 
vote taken during Committee consideration, including the names 
of those members voting for and against:

		[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                         VI. OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1) 
of rule X of the Rules of the House of Representatives, the 
oversight findings and recommendations of the Committee are 
reflected in the descriptive portion of the report.

 VII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to 3(c)(2) of rule XIII of the Rules of the House 
of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.
    The Committee has requested but not received from the 
Director of the Congressional Budget Office a statement as to 
whether this bill contains any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.

                    VIII. FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

       IX. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to direct 
the Secretary of Health and Human Services to provide certain 
documentation to the House of Representatives relating to the 
negotiation of prices for prescription drugs under the Medicare 
prescription drug program.

                   X. DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of H. 
Res. 1284 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                      XI. COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

    XII. EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H. Res. 1284 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                   XIII. ADVISORY COMMITTEE STATEMENT

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                XIV. APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

           XV. SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

    H. Res. 1284 directs the Department of Health and Human 
Services to furnish to the House of Representatives any 
external or internal communications of the White House 
regarding the implications of imposing certain penalties on 
drug manufacturers that do not comply with Department of Health 
and Human Services price negotiations or the implications of 
establishing inflation penalties under the Medicare 
prescription drug program.

       XVI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    There are no changes to existing law made by the bill H. 
Res. 1284.

                          XVII. MINORITY VIEWS

    H. Res 1284 directs the Health and Human Services (HHS) 
Secretary Xavier Becerra to furnish communications and 
documents related to the Democrats' recently passed drug 
pricing controls, including these misguided policies' impact on 
future drugs and cures as well as the perverse incentives the 
law creates for higher drug prices. The Congressional Budget 
Office (CBO),\1\ the University of Chicago,\2\ and many other 
independent analyses\3\ have all confirmed these provisions 
will lead to fewer cures amid the current reality of a 
recession and record-setting inflation. Notably, the 
Congressional Budget Office also projected that that the 
inflation-rebate and negotiation provisions would ``increase 
the launch prices for drugs that are not yet on the market 
relative to what such prices would be otherwise.''\4\
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    \1\The Congressional Budget Office (CBO), ``Estimated Budgetary 
Effects of Subtitle I of Reconciliation Recommendations for 
Prescription Drug Legislation'' (July 6, 2022), available at https://
www.cbo.gov/publication/58290.
    \2\Philipson, J. Tomas and Durie, Troy. (Nov. 29, 2021), The 
University of Chicago, Issue Brief: The Impact of HR 5376 on 
Biopharmaceutical Innovation and Patient Health, available at https://
ecchc.economics.uchicago.edu/2021/11/30/issue-brief-the-impact-of-hr-
5376-on-biopharmaceutical-innovation-and-patient-health/.
    \3\Vital Transformation, Build Back Better Act: Total market impact 
of price controls in Medicare parts D and B, available at https://
vitaltransformation.com/2022/07/build-back-better-act-total-market-
impact-of-price-controls-in-medicare-parts-d-and-b/.
    \4\The Congressional Budget Office (CBO), ``Additional Information 
About Prescription Drug Legislation,'' (Aug. 4, 2022), available at 
https://www.cbo.gov/publication/58355.
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    It is imperative that the American public be able to access 
information from this Administration which could further detail 
the impact this law will have on their lives, their medicines, 
and how their money will be used to implement these policies. 
We have external analyses, estimates, and evidence confirming 
our expectations that this law will be a disaster for patients 
and innovators alike, yet we are still seeking this elusive 
information from the Administration about how they might 
substantively respond to these grave concerns. The chilling 
lack of a response appears to confirm our fears about how this 
law will be implemented--without proper regard for the long-
term consequences on medical innovation or patient access to 
medicines--and further erodes our trust in the competency of 
this Administration to perform its basic functions, let alone 
coordinate with industry stakeholders, patients, and its hired 
contractors to set prices for cutting edge biopharmaceutical 
products.
    The majority contends that this ``Resolution was filed 
before any attempt by the minority to obtain these documents 
and other information through typical oversight channels, 
including through information requests and letters.'' However, 
we note that the Energy and Commerce Ranking Member Rodgers 
along with Ways and Means Ranking Member Brady sent a letter to 
HHS Secretary Becerra on November 16, 2021 requesting a 
briefing on the drug pricing provisions in H.R. 5376, 
provisions which ultimately became Public Law 117-169.\5\ This 
letter also requested analysis from the Administration 
pertaining to the number of generic drugs and biosimilars that 
would fail to come to market as a result of these price 
controls. The letter also requested analysis of how these 
policies ``might impact the incentives for pediatric studies 
and dosage form changes, especially in the area of mental 
health and substance use disorder drugs or drugs that affect 
those with chronic diseases.'' The letter also requested 
updated analysis from the Centers for Medicare and Medicaid 
Services (CMS) Office of the Actuary (OACT) related to how the 
inflation rebate penalties might impact Medicare beneficiaries' 
premiums and drug launch prices. The CMS OACT's 2019 analysis 
of H.R. 3 found that the inflation rebate penalties would have 
resulted in more than $24 billion in increased premiums over 
ten years as well as ``higher brand name prices associated with 
higher expected launch prices and higher list prices to 
partially offset the Medicare inflation rebate,'' in the 
private health insurance market.\6\ Neither members of this 
Committee nor staff received a briefing from the 
Administration. Neither did we receive any of the requested 
analysis nor even an official response to the letter.
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    \5\Energy and Commerce Ranking Member Rodgers and Ways and Means 
Ranking Member Brady, Letter to HHS Secretary Becerra (August 29, 
2022), available at https://republicans-energycommerce.house.gov/wp-
content/uploads/2021/11/11.16.21-Letter-to-HHS-and-CMS-re-Drug-Pricing-
Implementation.pdf.
    \6\Centers for Medicare & Medicaid Services, Office of the Actuary. 
``Updated Financial Impacts of Titles I and II of H.R. 3, ``Lower Drug 
Costs Now Act of 2019.'' (Nov. 8, 2019), available at https://
www.cms.gov/ResearchStatistics-Data-and-Systems/Research/
ActuarialStudies/Downloads/HR3-Titles-I-II.pdf.
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    This failure to respond to Committee requests for germane 
documents and analysis related to one of their signature 
legislative endeavors is not an isolated incident. Indeed it 
has become the norm for requests from the Committee, especially 
as it relates to drug pricing policies which will affect 
patients, providers, and the future treatments and cures that 
could be lost. Our members have requested drug pricing 
information, including how this Administration may or may not 
discriminate against patients with disabilities or debilitating 
diseases under these new drug pricing control schemes, through 
official Questions for the Record (QFRs) from HHS Secretary 
Becerra in response to both of his appearances before this 
Committee in May of 2021 and April of 2022. We are yet to 
receive any responses to either sets of questions.
    The typical oversight channels, including requests and 
letters, have roundly been ignored by this Administration. That 
is further evidenced by the August 29, 2022 letter from Ranking 
Members Rodgers and Brady to HHS Secretary Becerra, which asked 
for a written response by September 12, 2022 and a briefing by 
September 19, 2022.\7\ As of this writing we are yet to receive 
a written response to the letter or even any proposed dates for 
a briefing.
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    \7\Energy and Commerce Ranking Member Rodgers and Ways and Means 
Ranking Member Brady, Letter to HHS Secretary Becerra (August 29, 
2022), available at https://republicans-energycommerce.house.gov/wp-
content/uploads/2021/11/11.16.21-Letter-to-HHS-and-CMS-re-Drug-Pricing-
Implementation.pdf.
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    The American public deserves to know whether the 
Administration will go through notice and comment rulemaking. 
American patients and patient advocates need to know whether 
they will have a voice in these so-called negotiations and 
whether they will have meaningful representation or ability to 
appeal decisions made in these proceedings. Innovators and 
investors in biopharmaceutical products should know whether 
they will have any price floor in these so-called negotiations 
or whether the Secretary can demand they accept a penny price 
or pay up to a 95 percent excise tax on their gross sales. 
American taxpayers deserve to know how the $3 billion 
implementation funding will be used and who will be hired to 
help the HHS health care officials set drug prices. These are 
just a sampling of very basic questions that we are seeking 
answers to from an Administration that is quick to trumpet its 
perceived political victories but slow to acknowledge 
fundamental questions or respond to concerns on behalf of real 
patients, doctors, and the researchers who will have to focus 
their attention on other areas as a result of this law.
    The Democrats' pyrrhic political victory will undoubtedly 
be at the expense of future innovation and patients across our 
country who are desperately in need of hope. This Committee's 
denied request is a denial of basic transparency and answers 
for people standing in the way of this Administration's 
political ambitions. We urge the majority to reconsider our 
request for transparency and hope that greater sunlight on this 
law will help us come together to remedy the worst of its 
forthcoming consequences.

                                    Cathy McMorris Rodgers,
               Republican Leader, Committee on Energy and Commerce.

                                  [all]