Chairman Nadler Statement for Subcommittee Hearing on "Treating the Problem: Addressing Anticompetitive Conduct and Consolidation in Health Care Markets"
Washington, April 29, 2021
Washington, D.C. - Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY) delivered the following opening remarks during a Subcommittee on Antitrust, Commercial, and Administrative Law hearing on "Treating the Problem: Addressing Anticompetitive Conduct and Consolidation in Health Care Markets:"
"The Judiciary Committee has a strong, bipartisan tradition of promoting competition in health care markets. We have done this vital work to make health care services—particularly prescription drugs—more affordable for patients.
"We continue that tradition with today’s hearing, which will examine anti-competitive practices in this market, along with legislation to address it.
"I am pleased that we are joined by our distinguished colleagues from the Senate, and I thank them for their hard work, on a bipartisan basis, on the important legislation we introduced yesterday to lower prescription drug costs.
"All of these bills are essential to help stop pharmaceutical companies from engaging in anti-competitive conduct—such as so-called 'pay-for-delay' agreements, citizen petition abuse, and product hopping. This conduct blocks or delays access to affordable medications without any offsetting benefits.
"I also want to extend a warm welcome to Chairwoman Maloney, who has led one of the most comprehensive and in-depth investigations of drug prices in congressional history as Chair of the Oversight and Reform Committee.
"The investigation—which was originally launched by the late Chairman Elijah Cummings in 2019—has already uncovered significant, new evidence of pharmaceutical companies exploiting their market power at every turn, all at the expense of the patient.
"Today, one quarter of Americans report that it is difficult to afford their medicines. In fact, exorbitant medical bills are one of the major causes of why Americans seek bankruptcy relief.
"It is painfully clear that the soaring cost of health care is also bad for the health and well-being of American families.
"It is unacceptable that many seniors cannot afford the arthritis medication they need to perform everyday tasks, such as buttoning their coats or opening a jar, without excruciating pain.
"It is unacceptable that hundreds of thousands of cancer patients are reportedly delaying lifesaving care, cutting their pills in half, or skipping treatment entirely due to high drug prices.
"And it is unacceptable that people suffering from diabetes must worry about the life-threatening consequences of not being able to afford insulin because of its exorbitant cost.
"These trends have only worsened in the wake of the pandemic, which has wrought tremendous economic hardship in our communities.
"It is time for this to change.
"As many experts have noted, including some of the witnesses who will testify here today, the lack of competition in health care markets is one of the primary causes of escalating costs.
"In recent years, under Republican and Democratic leadership, the Subcommittee has held numerous hearings in this area, examining the topics of consolidation in the market for health insurance, competition in the drug supply chain, and anti-competitive practices by prescription drug companies.
"I am pleased that we are continuing that essential work today.
"One focus of our efforts should be lowering prescription drug costs by strengthening competition from lower-priced generic drugs.
"According to the Federal Trade Commission, the first generic competitor to a branded product is typically offered at a price 20% to 30% below the brand price. Subsequent generic entry creates greater price competition, with price drops reaching 85% or more off the brand price.
"In response to the threat of generic entry—which of course threatens the ability of branded drug companies to charge monopoly prices—branded companies have engaged in numerous anti-competitive tactics.
"This Committee has been—and will continue to be—active in stopping drug companies from reaping monopoly profits at the expense of patients’ health.
"For example, I am proud to have reintroduced the 'Preserve Access to Affordable Generics and Biosimilars Act' with Senator Klobuchar, Chairman Cicilline, and Ranking Member Buck to ban so-called 'pay-for-delay' settlements.
"These anti-competitive agreements allow branded drug companies to pay-off a generic competitor to delay entering the market with a lower-cost generic product. As a result of this abusive conduct, the brand-name drug company gets to keep its monopoly, and the generic gets paid off with a portion of the monopoly profits. But the consumers inevitably lose.
"Although the Supreme Court, in FTC v. Actavis, held that pay-for-delay agreements could violate the antitrust laws, the FTC expends significant resources challenging what appear to be clear violations. This legislation would address that problem by requiring courts to view such agreements as presumptively unlawful.
"According to the non-partisan Congressional Budget Office, this legislation would save American taxpayers at least hundreds of millions of dollars over ten years due to the high costs imposed on our healthcare system by this anti-competitive conduct.
"I was pleased that this legislation passed unanimously out of the Committee last Congress with strong support from then-Ranking Member Collins and I hope it will receive similar support from my colleagues on the Committee this Congress.
"I also look forward to addressing this issue together with our colleagues on the Energy and Commerce Committee in the weeks ahead."In closing, I thank the Chairman for holding today’s important hearing, and I welcome all of our esteemed colleagues and panelists. I look forward to hearing their testimony, and I yield back the balance of my time."