Jordon & Meadows Try to Torpedo Oversight Committee Rising Drug Costs Investigations

Canary. Photo by 4028mdk09.

[h/t to gux for this heads up]

In a move reminiscent of the recent shenanigans reported in TNB Notes from Politico about House Republicans Jim Jordon and Mark Meadow manipulations into shutting down the government, they were at it again in a move to attempt to sabotage launched “wide-ranging investigations” in January by the Oversight and Reform Committee under the new leadership of Chairman Elijah Cummings “into the prescription drug industry’s pricing practices.”

The investigations cover the federal governments spending on Medicare and Medicaid spending focusing on drugs that “are among the costliest to Medicare Part D” which had the “costliest per beneficiary, or had the largest price increases over a five-year period.”

According to the Committee on Oversight and Reform website press release January 14, 2019, “Cummings sent letters to 12 drug companies seeking detailed information and documents about the companies’ pricing practices,” including ‘information and communications on price increases, investments in research and development, and corporate strategies to preserve market share and pricing power,” in a “first step” of “comprehensive review and prices practices.”

The Centers for Medicare and Medicaid Services projects that spending on prescription drugs will increase more rapidly than spending on any other health care sector over the next ten years.  The federal government bears much of the financial burden of escalating drug prices through Medicare Part D, which provides drug coverage to approximately 43 million people.  The government is projected to spend $99 billion on Medicare Part D in 2019.  In 2016, the 20 most expensive drugs to Medicare Part D accounted for roughly $37.7 billion in spending.

A review by the Inspector General of the Department of Health and Human Services found that ten of the most expensive brand-name drugs accounted for $15.6 billion of spending in the catastrophic coverage phase of the Medicare Part D benefit in 2015.  The Inspector General has also found that Part D payments for brand-name drugs increased
 by 62% from 2011 to 2015—after taking into account manufacturer rebates—even though the number of prescriptions fell by 17%. 

Approximately 94% of widely-used brand-name drugs on the market between 2005 and 2017 more than doubled in price during that time, and the average price increase in 2017 was 8.4%—four times the rate of inflation—according to an analysis conducted by AARP.  A recent Associated Press analysis found that more than 4,400 brand-name drugs increased in price in the first seven months of 2018 alone, compared to 46 price decreases.

These price increases are negatively affecting patients, including those on Medicare.  The percentage of Medicare Part D beneficiaries who paid at least $2,000 out-of-pocket for their drugs nearly doubled from 2011 to 2015.  A survey conducted by the Kaiser Family Foundation last year found that one in five Americans had not filled a prescription due to costs.

On Tuesday, Raw Story via a BuzzFeed reported, “Republican members of the committee, led by Reps. Mark Meadows (R-NC) and Jim Jordan (R-OH), are sending their own letters, warning these companies to not cooperate with the congressional investigation.

Their reasoning? They accuse Democratic Oversight Chairman Elijah Cummings (D-MD) of orchestrating these investigations as an underhanded scheme to lower drug companies’ stock prices.

In what would be considered an unprecedented move, lawmakers Jordan and Meadows imply in their letters to drug makers “that Cummings may be attempting to collect the information in order to bring down the industry’s stock prices” through the sensitive information they are seeking, adding that it “would likely harm the competitiveness of your company if disclosed publicly” and they “feel obligated to alert” by accusing Cummings of doing it before alleging he released “cherry-picked excerpts from a highly sensitive closed-door interview” over security clearance interviews.

While failing to make clear the relationship between security clearance interviews and stock manipulation accusations, Jordan and Meadow nonetheless hinge their attempts of obstruction into the committee’s investigations with an edited quote from Cummings made while “appearing before the Committee on House Administration seeking an increase in funding for his committee,” an increase Jordan objected to.

Video should be cued to to 50:44, listen to (at least) 53:17

According to the letters Jordan and Meadows sent, they write, “We have three people, Congressman, on my staff – I call them the “drug team.” And what they deal with is the cost of high prices of prescription drugs. If you follow headlines, we have already seen the impact they have had … on stock prices with regard to drugs. I mean, it has been astronomical.”

In the edited quote, Cummings seems to be bragging about an “astronomical” impact on drug company stocks. In the context of his statements before and after, he seems to be saying the “astronomical” impact is on taxpayer savings, which justify giving his committee more resources. A minute later he says: “Whatever you all give us, we will give it back in savings by rooting out fraud, waste, and abuse.”

Jordan’s office insisted that the letter does not tell companies not to respond to Cummings’ requests, and in fact encourages the companies to cooperate with “responsible and legitimate” oversight. However, Jordan’s office reiterated that he has grave concerns that in this case Democrats are out to destroy drug company stock value.

According to Raw Story, “drug price hikes in recent years have been out of control, with more than 1,000 medications facing increases in January alone,” citing examples of the rising cost of insulin which “has led to many diabetics ration their doses.

Democrats expressed bafflement at the letters. While politicians routinely spar over committee work, warning companies not to comply with an investigation is unconventional — perhaps even unprecedented, Democrats say.

“Rep. Jordan is on the absolute wrong side here,” Cummings said in an emailed statement to BuzzFeed News. “He would rather protect drug company ‘stock prices’ than the interests of the American people.”

On A Side Note (Opinion)

Without hesitation, Jordan and Meadows in their own letters to these drug companies, the same drug companies they issued subpoenas to in the 114th and 115th congresses, now see nothing wrong with obstructing oversight and reform on the committee they continue to sit. How do I know they did this? They say so, with helpful footnotes in their own letters.

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