▶ 0:14:23The subcommittee will come to order. Good morning and thank you to the witnesses here today to discuss bio similars uh can lower costs for patients and provide greater and more affordable access to care.
▶ 0:14:38As we discussed in our first subcommittee hearing of this Congress of our in terms of our national issues and uh chronic disease epidemic it's extremely uh costly uh just in terms of the health care system but also our fellow American patient. In fact, 90% of our $4.5 trillion in health care costs last year uh was tied to chronic diseases.
▶ 0:15:02It's hard to believe, but they're saying 90% 42% of Americans have two or more chronic diseases such as diabetes, cancer, heart disease. Today, today's hearing is is an important step in lowering health cost and improving outcome outcomes. and we must continue to find longerterm ways to improve the health of our patients and our nation.
▶ 0:15:26Thankfully, we live in an era of innovation where researchers and manufacturers are developing new and uh complex treatments and cures. Uh medicines such as cell and gene therapy, these drugs have improved millions of lives for patients with Alzheimer's uh and other diseases. We also are able to bring these treatments to patients through lowerc cost bioimilar options.
▶ 0:15:52Since uh entering the market in 2015, biosimilars have saved the entire health care system over $23.6 uh within the medical uh program the uh reduced part B spending by four and a half billion in 19 uh 2020 alone bioimilars launched at at prices up to 35% lower than branded drugs and they can drive further
▶ 0:16:23savings when they compete with drugs already on the marketplace. The marketplace competition lower cost for all patients in the insurance markets will provide safe and effective treatments uh options for patients. Biosimilars also help increase drug supply and availability and have been used in nearly 700 million days of patient therapy. Still significant uh work needs to be done to ensure this terms of moving forward.
▶ 0:16:50This ranges from making our drugs uh reimbursement systems work correctly to incentivize markets competition to improve patient and providers education and awareness over our health care system stands to save 181 billion over the next 5 years by reducing the barriers to bioseimary seminaries uh adoption and I hope this uh hearing can help accelerate that goal.
▶ 0:17:16We are about to hear from a great group of folks who represent many aspects of biosimilary market including those involved uh firsthand the care delivery and those work working behind the scenes to bring about uh the these drugs to the marketplace.
▶ 0:17:34I look forward to working with all of our colleagues with Congress to reduce the impact of chronic disease epidemics by make many by making innovative treatments more accessible and affordable uh throughout the bio bios seminars. So with that I want to thank well introduce the uh uh the ch from the gentleman from Texas Mr. Dogget. Thank you. Well thank you very much Mr. Chairman.
▶ 0:18:00I hope this is really the first of a number of hearings uh to explore the waste and abuse that is rampant in the pharmaceutical industry. Few industries are so zealous in doing all they can to prevent competition. Few are so overpaid and few have invested so effectively in this Congress to maintain their privileged position and to avoid the slightest accountability.
▶ 0:18:23All of this has to be considered in connection with Trump's Doge attack on science, on research, on the Food and Drug Administration, and the National Institutes of Health. Uh he is not eliminating waste, fraud, and abuse there, but rather settling old scores, accepting ludicrous conspiracy theories, and building a body count of how many public servants he can fire. The health of our nation will suffer from this wrongdoing.
▶ 0:18:50Consumers will be paying even more for less as innovative research is decimated by this recent Trump Musk rampage. With no explanation provided, for example, support was abruptly terminated for the groundbreaking vile research that has been conducted by award-winning scientist Dr. Jason Mlullen and his team at the University of Texas in Austin. called one Monday and told their project ended the next Monday with no explanation.
▶ 0:19:19Elsewhere, funds have been cut for clinical trials upon which patients rely in seeking life-saving cures for cancer, Alzheimer's, and more. And experts, of course, have been removed uh randomly from the FDA and the NIH that are essential participants in the development and approval of new therapies. All thanks to DOA's abrupt layoffs in a disgraceful display designed to humiliate dedicated public servants.
▶ 0:19:47Many turned away without any prior notice as they arrived at work. After being forced out from his role overseeing vaccine development and approval at the FDA, Dr. Peter Marx shed light on that shattered agency. He said, quote, "It has become clear that truth and transparency are not desired by the secretary, but rather he wishes subservient conf subservient confirmation of his misinformation and lies.
▶ 0:20:17Taxpayers fund of course most innovative research. Every new drug approved from 2010 to 2019 was developed with some taxpayer funding. And while the early stage basic research is critical in what we often think of in terms of the public investment, taxpayers are often called upon to fund latestage development and clinical trials. The newly approved drugs with the highest clinical value are rooted in taxpayer funding.
▶ 0:20:47And these innovative treatments like Sandy uh Sandy for uh prostate cancer which was almost solely developed with public funding, prep treatments for to prevent HIV infections, gene therapies to treat cancer, and so much more. And of course, the Doge approach uh looks only at the spending side and totally ignores the real waste and abuse that grows out of the tax scam that was so proudly approved in this committee uh in 2017.
▶ 0:21:16In the year 2023, for example, Fizer, Merc, and Johnson and Johnson paid nothing in corporate taxes, though each made tens of billions of dollars in revenue while charging America so much more than consumers in any other country and repeatedly spiking prices. We should be eliminating the many tax loopholes that allow big pharma to avoid paying for the national security upon which it relies.
▶ 0:21:42closing tax dodging loopholes that allow them to offshore profits, write off their aggressive advertising expenses, and further enrich themselves by spending more on stock buybacks and dividends than in innovative research and development. For a handful of drugs, prices will be somewhat lower next year, thanks to the Democratic legislation finally providing a very narrow Medicare negotiation program.
▶ 0:22:07At least we hope that happens, though big pharma is throwing everything at it that it can uh to block that. Uh instead of ignoring the outlandish drug prices with which Americans are being ripped off, we should be eliminating lengthy delays before a drug is eligible for negotiation, ensuring prices are negotiated on drugs with limited competition, and extending the benefits of negotiation to all Americans, including the uninsured, not just those covered by Medicare.
▶ 0:22:37And of course, the latest disastrous Trump adventure in incompetence is called Liberation Day, which is liberating thousands of dollars from the wallets of Americans through Trump tariff taxes, threatening the future of so many small businesses with soaring costs and playing golf while the markets have lost since he came into office about 11 trillion dollars, uh, six or seven just last week.
▶ 0:23:02The pharmaceutical industry is apparently exempted from these tariff taxes initially, but he's promised they're coming. The only thing that will be accomplished by taxing pharmaceuticals with tariffs will be to make the world's most expensive medications for Americans even more expensive and out of reach. We do indeed need a true liberation day, a day when my colleagues finally liberate themselves from big pharma's strangle hold over this Congress. And I yield Thank you.
▶ 0:23:32Uh I will now introduce the witnesses. Dr. Debbie Pratt, president of Community Oncology Alliance. Dr. Coen uh is the uh director of the health group healthc care group. Craig Burton is the executive director of Bio Seminar uh council and Dr. Aaron Kessamine is pre professor of president the professor of medicine of Harvard University. Thank you for all joining us today.
▶ 0:24:01Your written statements will be made part of a hearing record and each of you will have five minutes to deliver your oral remarks. Dr. Pratt, you're recognized. Chairman Buchanan, ranking member Dogget, and members of the subcommittee, I thank you for the opportunity to testify on the critical issue of biosimilars and their role in improving patient care and affordability in cancer treatment. As background, I'm an oncologist specializing in breast cancer in Austin, Texas.
▶ 0:24:31I serve in the leadership of Texas Oncology, a private physician-owned independent community oncology practice that's part of the UN that's part of the US Oncology Network, and I serve as the president of the Community Oncology Alliance, a nonprofit organization that represents cancer patients and their independent community oncology practices across the country. It's important to understand that as cancer treatment continues to evolve, it's imperative that we consider the factors influencing the development and utilization of biosimilars compared to their biologic originator products.
▶ 0:25:01As a breast cancer specialist, I use biosimilars in my practice daily. Knowing that these are the highest quality products that are both effective and affordable to the patients I serve and are much more affordable than their reference originator biologics. You may question why I would use less expensive biosimilars rather than the more expensive originator biologic especially given the reimbursement structure. But the answer is simple patient affordability. Every day as an oncologist we see patients who simply cannot afford their treatments.
▶ 0:25:28Our job as physicians includes being advocates for our patients and doing whatever is possible to make their treatments as affordable as possible. Biosimilars offer that affordability. But the reimbursement landscape is perilous and not necessarily viable for physicians because there are situations where the acquisition and related costs of using biosimilars can be greater than the reimbursement.
▶ 0:25:48Two pressing concerns with biosimilars and ensuring uh and ensuring a long-term healthy biosimilars market are two market distortions dealing with the insurance companies and their PBMs and the 340B drug pricing program. PBMs and their related insurers often force physicians not to use the most effective and affordable drugs for our patients, but the most profitable drugs for those corporations. Because they are allowed to use safe harbor rebates to force concessions from pharmaceutical manufacturers.
▶ 0:26:15These profit-seeking corporations can mandate the use of a more expensive originator biologic or a specific biosimilar most profitable to them when there are multiple biosimilars available to treat a specific cancer. This can create logistical nightmares for practices having to stock multiple biosimilars when different PBMs favor their most profitable biosimilar. At a macro market level, PBMs threaten the viability of a healthy biosimilar market.
▶ 0:26:40And I will add that these corporate entities have now started even sourcing their own private label biosimilars to even further increase their profitability. Another market distortion impacting the increased use of biosimilars is uh 340B hospitals, which are significantly overpaid for drugs by CMS. Because these quote nonprofit facilities make substantial profits on drugs, they are incentivized to use the most expensive drugs, especially the more expensive originator biologics rather than biosimilars.
▶ 0:27:07As several studies have documented, this is another market distortion that threatens the long-term viability of the biosimilars market. We need a healthy free market environment for biosimilars that delivers on the promise of making new biologics available to oncologists and other specialists treating life-threatening diseases. Over the next over the next decade, some 118 biologics are expected to lose patent protection, presenting an opportunity for an estimated $234 billion in savings from biosimilars.
▶ 0:27:36In conclusion, while biosimilars represent a promising opportunity to enhance patient access and reduce costs for cancer therapies and other disease treatments, the current landscape presents significant challenges. To foster a more favorable environment for biosimilars, I recommend the following actions. First, simplify the approval process for biosimilars to encourage competition while maintaining safety and efficacy standards. Second, reform rebate practices to eliminate their use of biosimilars by removing their safe harbor protections.
▶ 0:28:06Third, stop pharmaceutical manufacturers from providing 340B discounts on biologics that have biosimilar competition. Fourth, increase physician reimbursement for biosimilars to ASP plus 10% and remove the 2% sequester cuts from these products. Fifth, establish a floor price for biosimilars that ensures market stability. Sixth, provide incentives and funding for the research and development of biosimilars specifically in this country targeting small and mid-size companies.
▶ 0:28:33Finally, engage with healthcare providers to increase awareness of the benefits and safety profiles of biosimilars, helping to promote their adoption and patient treatment. Addressing these factors can help ensure that cancer patients have access to a broader range of effective, more affordable treatment options, ultimately leading to improved health outcomes and reduced health care costs. Thank you for the opportunity to testify and thank you for your service. And thank you, Dr. Edgington.
▶ 0:28:59You are now Chairman Buchanan, Ranking Member Dogget, and members of the committee, thank you for inviting me to testify today. I'm Dr. Colin Edertton. I'm a community rheatologist in Charleston, South Carolina.
▶ 0:29:16I've been practicing rheumatology for 20 years in the community currently and prior to that 12 years as a US Army physician as a rheatologist who include deploying to Iraq to support our nation's heroes Rheumatology uses biologic medications very heavily and they have been life-changing for our patients. Prior to the advent of biologics, we had few effective therapies for diseases that led to inevitable disability and early death for our patients.
▶ 0:29:46It has been incredible to see the impact of biologic agents on our patients, but we are facing some headwinds regarding the expense of these medications and patient The CDC estimates that 21% of adults over the age of 18 have doctor diagnosed arthritis. So we're talking about a quarter of our population that are potentially going to be treated with biologic agents in the future.
▶ 0:30:12Bioimilars have opened up the possibility of greater patient access by significantly reducing the costs associated with treatment for our patients and we've been very excited to see bioimilars have been waiting for them for decades in rheumatology and now we're living in the biosimilar age unfortunately we are seeing some market distortions that are making access for our patients very difficult and I'm excited to talk about that with you today.
▶ 0:30:39One of the key distortions has been a problem with pharmacy benefit managers offering rebates um or or extracting rebates rather from uh the manufacturers of the drugs in order to place these drugs on their formularies. Because of the rebates, this reduces the average sales price or ASP for these biologic agents.
▶ 0:31:03This has has led to what we call an underwater situation with the biologic agents where the reimbursement for the biologic or biosimilar is actually less than the cost of the drug and therefore patients cannot access the bioimilars. So these are the cheaper drugs. These are oftentimes the drugs that are preferred on the formulary and the patient cannot access the drug because again the cost of the drug is actually higher than the reimbursement.
▶ 0:31:33And this is all due to rebates that are being extracted by pharmacy benefit managers. These distortions are a big problem for us in medicine. We'll highlight that pharmacy benefit managers are very opaque organizations that are not accountable to providers like me. I can't meet with them. I can meet with insurance companies. I can meet with um the manufacturers, but we cannot meet or talk with the PBMs as providers. I'll also note that the PBMs don't create medications.
▶ 0:32:02They don't manufacture them and they don't care for patients either. They are true middlemen that are extracting billions of dollars from our health care system and showing very little um as far as results. So what can we do about improving access for our patients with bioimilars?
▶ 0:32:19We have several One of these is increasing uh increasing the transparency um in drug pricing especially with respect to biologics and the biosimilars. We feel that this transparency will help both the providers and patients understand the costs involved and foster a more equitable marketplace.
▶ 0:32:42Specifically, we need to amend the Social Security Act to temporarily provide an 8% add-on to the provider's acquisition cost of all biosimilar Secondly, we recommend amending uh 1847A subp part C4 to extend the secretar's authority to use wholesale acquisition cost also known as whack WAC plus 3% until the ASP or average sales price reaches sustainable
▶ 0:33:13levels as determined by the secretary. And thirdly, we recommend amending section 1847A subp part C3 to permanently remove manufacturer rebates from the ASP methodology for biosimilars so that we don't have the underwater biosimilar problem that we currently face. Thank you and I look forward to answering your questions. And thank you Mr. Burton. You are now recognized.
▶ 0:33:40Good morning chairman Buchanan, Ranking Member Dogget, members of the committee. Thank you for having me today. My name is Craig Burton. I'm the executive director of the Biosimilars Council, which is a division of the Association for Accessible Medicines. Our mission is to increase patient access to life-saving, lowerc cost biosimilar medicines. In the 10 years since biosimilars have first come to market, biosimilar use has already saved the US health care system nearly 36 billion.
▶ 0:34:08Importantly, they've also resulted in greater Americans access to care by more than 450 million days of therapy that would not have occurred had biosimilars not been on the market. They're used by patients with cancer, diabetes, arthritis, and many other conditions who depend on biosimilars uh for their life-saving care. But depri despite their value, biosimilars are at a critical juncture.
▶ 0:34:35According to a groundbreaking IQVIA Institute report, of the 118 biologic medicines that will lose patent protection over the next decade, representing a $234 billion market, only 12 of those products have biosimilars currently in development. This is staggering. Let me be clear.
▶ 0:34:57Nine of 10 brand biologic drugs that will lose patent protection over the next 10 years do not have biosimilar competitors in development today. This means fewer savings for Medicare, taxpayers, and employers. But it's not just a business issue. This affects patient care. Real Americans will suffer deeply if we fail to act.
▶ 0:35:21Biosimilar competition is stalling due to a series of market dynamics and policy decisions that introduce unacceptable uncertainty and market unpredictability. First, the inflation reduction act was intended to reduce cost, but it unintentionally discourages biosimilar investment due to timing mismatches and an unpredictable price setting process. Biosimilar development is costly and complex. It takes up to $300 million to complete.
▶ 0:35:51Without predictable market conditions, companies simply are not going to be able to risk the investment and this is going to cost patients critical treatments. Second, as has already been mentioned, many insurers and PBMs are too often favoring higher priced brand biologics over lowerc cost biosimilars, protecting billions in rebates and profits.
▶ 0:36:15For example, today there are 22 different price points of biosimilar versions of the brand drug Humira, which at one point was the best selling drug in history. Some of those biosimilars have price points as much as 87% lower than the brand drug. But biosimilar adoption today is hovering at only about 20% of that market as the brand continues to dominate that market.
▶ 0:36:45These practices not only block patient access but they stifle future competition. Third, as has also been mentioned today, many Medicare reimbursement policies unfairly penalize healthcare providers when they choose to use lowerc cost biosimilars and they can force them to use more costly alternatives. Providers are often reimbursed less than the cost of acquiring biosimilars which directly undermines the adoption of these lowerc cost products.
▶ 0:37:14This unpredictable reimbursement imbalance further reduces patient access. On top of these, biosimilars continue to face patent tickets and cumbersome regulatory barriers that slow biosimilar development and prevent timely patient access to these medicines. Congress can act now to reduce the uncertainty that's facing biosimilar adoption through five ways. One, amending the IRA to remove the unpredictability facing biosimilars.
▶ 0:37:44to ensuring that Medicare beneficiaries have guaranteed access to lowerc cost biosimilars first by addressing those PBM practices that block access. Third, reform Medicare reimbursement policies to fairly compensate providers who choose lowerc cost biosimilar medicines. Fourth, support FDA steps to streamline biosimilar approval. and fifth preventing the use of patent tickets to delay biosimilar competition.
▶ 0:38:14The biosimilar market represents not only significant cost savings for taxpayers and employers up to an additional 189 billion over the next 10 years, but a critical engine for healthcare innovation, competition, and patient choice. We cannot allow biosimilars to stagnate. The cost of inaction is measured not merely in dollars, but in the real suffering of America's patients. Thank you for your time. Thank you, Dr. Kessleheim. You are now recognized.
▶ 0:38:44Chairman Buchanan, ranking member Dogget, members of the committee. My name is Aaron Kessleheim and I lead the program on regulation, therapeutics, and law at Harvard Medical School. Biosimilars are an important tool to promote affordability and access for patients to uh to essential biologic drugs. I have some ideas for this committee about how to support the availability of these products. But before I do that, I first want to make sure everyone listening to this hearing understands what is going on right now at Harvard and every other academic medical center in the country.
▶ 0:39:10Because of the short-sighted policies of the current presidential administration, scientific investigation at these institutions is being absolutely devastated. These cuts involve scientists. The CDC has lost 20% of its staff. They also involve research grants and contracts. Since inauguration, the pace of federal funds awarded by the NIH has fallen to less than half of the amount uh granted last year.
▶ 0:39:33The administration is trying to drastically reduce indirect research funding by nearly $4 billion per year to levels below what institutions require to conduct the scientific investigations necessary for medical progress. Reviews of future grants have been put on hold. Without warning, projects have been tossed aside, wasting years of investment in time, including clinical trials and potentially transformative new therapies that are being delayed and shuttered, pulling the rug out from desperate patients who have nowhere else to turn.
▶ 0:40:01This is a crisis of immense proportions because it is universally recognized at least it seems outside the Trump administration that government funded research is the engine of therapeutic in uh innovation and that the science performed by and funded by the NIH, CDC and other governmental institutions will lead to the biologics and eventually biosimilars of tomorrow.
▶ 0:40:22Government funding has been linked to basically every new drug approved by the FDA and particularly influential in generating various transformative treatments for cancer, rare diseases, a cure for hepatitis C. Every gene therapy product produced by the FDA had its origins in academic laboratories funded by the NIH and trials showing the effectiveness of prep for HIV were run by the CDC. The pharmaceutical industry relies on government funded research to do similarly essential product development work.
▶ 0:40:50But when fundamental studies are cut or hampered by delay, we are killing the possibility of drugs for the future. We won't see the effects of this next week or next month. But the next generation will look back at this moment and ask us what we were doing while the Trump administration systematically disposed of thousands of research projects that could have helped patients.
▶ 0:41:11In addition to the prospect of massive harm to future drug innovation, I also want to point out the more short-term catastrophe that will result when patients cannot access the existing drugs that they do need. Biosimilars can help, but even more important are the continued vitality of the Medicare and Medicaid programs which provide drug coverage for about 150 million people. Cutbacks planned for the Medicaid program will force states to severely limit their drug coverage which will inevitably lead to patient deaths.
▶ 0:41:40Legislation being considered by this committee to undercut Medicare's drug price negotiation will make drugs less accessible. Practicing doctors across the country like myself are extremely worried that patients may not be able to get the drugs that they need. If you do want to identify some potential avenues for policy reform that will bolster the biosimilar market, I recommend empowering the FDA to designate biosimilars as interchangeable with the original biologic and with each other.
▶ 0:42:09when the evidence indicates that switching studies are not necessary. That type of interchangeability is essential to the uh effective price competition that we get for generic small molecule drugs. Um but it lacks for bioimilars and and biologics. Um and that is in part because u it is bio biologic drugs are more complicated. But science is evolving. The kind of science that is funded by the government in many many uh uh circumstances.
▶ 0:42:36And that type of information can be applied and evolved to try to change the current uh the current standards that the FDA uses for uh for uh reviewing biologics and bio or for reviewing biosimilars to try to make sure they're more available. We need to give the United States Patent and Trademark Office the authority and resources to be more discriminating in reviewing patents to help prevent bioimilar entry. and then ensure that the patent office can administratively review uh already granted patents so that litigation isn't necessary.
▶ 0:43:06These patent thicket um have been used by by brandame manufacturers to prevent the timely entry of biosimilar competition. Access to biosimilars would also be supported by federal actions facilitating the ability of pharmacists to automatically substitute interchangeable products because many state laws um have uh limit such substitution.
▶ 0:43:27The committee might also consider changes to reimbursement rules like allowing Medicare part B to combine biosimilars into a si a single reimbursement code or preventing PBMs from offering confidential rebate for biologic drugs once biosimilar versions become available. Medicare price negotiation should also not stop when bio biosimilars are introduced since competition and negotiation can work in sync to offer fair price reductions for patients. Thank you. And thank you. So now we're go we're going to start the questions from the members.
▶ 0:43:57Mr. Smith you're recognized. Thank you Mr. Chairman and certainly thank you to our panel. Appreciate your taking uh time valuable time I'm sure uh to be here to share your expertise and and your insights.
▶ 0:44:10I am always encouraged to learn more about uh the developments in healthcare especially in the pharmaceutical arena but more specifically biologics bioimilars and uh really the urgency that there is to developing policy so that our citizens across the country and well that there's more access uh to to these technologies.
▶ 0:44:34I know that the research and development process uh to to create these innovations is certainly long and expensive and the complexity certainly speaks for itself. Uh but I I'm also encouraged by the leading edge of this innovation and you know unlike as has been pointed out most traditional small molecule drugs biologics are derived from the living sources and can contain any number of complex proteins, nucleic acids or even
▶ 0:45:04living cells or tissues. And some are even derived from the recipient's own blood or body tissue. But unfortunately biologics are one of the most expensive categories of drugs and I think that's why we need to look more at bioimilars or and the role of biosimilars in helping people with while the biosimilars are relatively new concepts intended to increase access we know that cutting edge therapies uh that uh can
▶ 0:45:34take place created by biosimilars and the manufacturers of these biosimilars that there's there's a great opportunity here, but I'm concerned that the access just isn't there. Uh I'm told that of the 73 bioimilars uh that have been approved by the FDA in a rural district like mine, most patients don't have access to those biosimilars. Now, there's a number of reasons I'm sure for that. One of those reasons is is awareness.
▶ 0:46:04And so I I find intriguing that, you know, as the majority of these products have been approved in just the last few years, some providers may may simply not be aware of other options that u might exist in treating various conditions. But p patients might also hesitate to accept a bioimilar alternative they have not heard of before instead of a well-known brand name. So Mr.
▶ 0:46:29Burton uh for my my question is that for patients with chronic illnesses who depend on biologics to manage their conditions what concerns do they have perhaps about switching to bioimilars from their biologic prescription and our patients generally aware of the biosimilars? Yeah, thank thank you for the question. I I I think what we've learned in the 10 years that biosimilars have been on the market is that the providers play a critical role in those conversations.
▶ 0:46:57So if if you're talking about an infused product, the conversation between the physician and and also frankly the nursing staff in with the patient helping them understand that what they're getting is the same as if they were getting the brand biologic um if you're talking about a pharmacy dispensed uh bioimilar again the role of that pharmacist in helping a patient understand what it is that they're getting and that they can expect expect the same clinical outcomes
▶ 0:47:27is really critical and I and I think uh the FDA has done a lot uh to educate on that. Um I think we've come a long way in 10 years. Undoubtedly there's more that can be done in that area though. Appreciate that. Dr. Pat, uh would you say your conversations with patients uh that you that you have, do they discuss the safety and efficacy of biosimilars and their potential cost savings? Uh and have have you seen that as productive in in your conversations?
▶ 0:47:57Uh certainly I think that this is a conversation that's evolved over time in the last decade since we've seen biosimilars. I think that skepticism about their efficacy and safety was greater 10 years ago than it is today. Um there are some patients I think that you really need to talk them through it and educate them quite a bit. I'll give an example.
▶ 0:48:17If I have a patient with metastatic breast cancer and brain metastasis that's had stable disease for 10 years, you know, any drug switch is going to create a fair bit of trepidation. And I have to do a good amount of education uh to make sure that they're comfortable with the switch really to a product that is biologically the same in CL in a chemically slightly different.
▶ 0:48:39Um uh and so so I think to to my colleagues point there's a real role in education uh for those patients but um that's gotten much easier over time and now as I have these conversations with patients every day in practice my education around this is quite minimal because I just set this as the expectation that of the drug that they'll receive. Very well. Thank you. I yield back. Mr. Dogget, you're recognized. Well, thanks very much. I appreciate each of you coming. Certainly Dr. Patton, good to see you from home.
▶ 0:49:09uh and uh I think there may be difference on how you achieve it but that all the witnesses have spoken to the value of competition in trying to uh bring down drug prices some. Uh Dr. Kessle, I'm of course I'm uh pleased that you focused on the devastation that is occurring as a result of the slash and burn approach to research and often rejection of science.
▶ 0:49:34Uh while we certainly want to encourage uh manufacturers, private research and development, I wonder if you could explain a little more about uh the differences between research that's conducted by manufacturers who purely have a profit incentive and the research that is funded by taxpayers who have a strong interest in public health. Sure.
▶ 0:49:56the the funding that comes from the NIH and other government sources tends to fund the basic and translational science work that is the foundation of all innovation because it we it helps us discover um the the the origins of disease, the biologic and and genetic origins of disease and the um the the targets in which to identify. Uh and this is extremely um uh risky research that that for-profit companies tend not to be involved in.
▶ 0:50:25Um but once a uh a useful mechanism or a useful process or a useful uh um um uh pathway is discovered um then uh for-profit companies um once a lot of the risk is taken away can look uh through their um their their uh the drugs and the the library of of of molecules that they have on hand or use their um their expertise in synthesis and manufacturing to create products then um that can uh address those issues.
▶ 0:50:54So I think that um what we're the kind of funding that we're seeing cut um that is really going to to destroy innovation is the kind of fundamental uh research that we uh that we depend on for trying to understand disease and trying to come up with the cures of tomorrow for for diseases that don't have sufficient treatments right now. And I believe there are a number of studies that have estimated for every dollar we invest in this research we get far greater returns five six dollars per dollar uh invested. Absolutely.
▶ 0:51:24And and the important thing is to remember that if if the government doesn't invest in this kind of research then nobody will be investing in this kind of research. It just simply won't get done. and and the kinds of discoveries that we've enjoyed over the past couple decades because of this great um uh um partnership between um government funding and the uh subsequent product development and manufacturing work that goes on in the pharmaceutical industry um just won't emerge.
▶ 0:51:50Would you outline your concerns about a number of proposals that are pending to create more carveouts and delays in our new drug negotiation process? Sure. So I mean once we get uh important new drugs drugs don't work if patients can't take them and and patients won't take them if the if the drug if the prices are too high. We know that there are a lot of studies about about cost related non-adherence.
▶ 0:52:14Um and the inflation reduction act took a first step in the direction of trying to get uh to fair prices for certain highric drugs that have been on the market for a really long period of time. Uh and this was an important step uh in trying to make drugs more fairly accessible. And so the idea of of of some of the bills that have been considered in this committee to exclude more drugs and delay negotiation further um from from what was set up in the IRA just doesn't make any sense at all.
▶ 0:52:39All of the drugs that are subject to negotiation with IRA have made tens of billions of dollars, far more than any reasonable estimate of their investment before they get to the point of negotiation. Um, and so the the idea of trying to build more carveouts just uh just takes money from uh excessively priced drugs away from patients and and payers um that they that they can use to to try to get access to the drugs that they need. What recommendations do you have for improving the negotiation process?
▶ 0:53:07Well, I think that the negotiation process worked well uh in in its first year. It is it is continuing um a pace. I think that actually it wouldn't it would be uh reasonable to uh to think about whether we should uh negotiate the prices for drugs sooner than what we are currently do because again we are negotiating the prices based on the benefits that these drugs provide. So a new a new drug company a drug company that has a new drug that provides a substantial amount of benefits is going to get a substantial uh price for their product.
▶ 0:53:36This is not paying bare bones prices for products. This is paying reasonable prices aligned with the benefits that these products provide with the knowledge in hand about how much these drugs cost to develop. So, so drug companies that believe in their product and that have uh good products that that meet unmet medical need for patients should not be worried about the prospect of negotiation and shouldn't be worried about the prospect of negotiation earlier in the process so that we can achieve a fair price for patients and a fair return for companies.
▶ 0:54:06Thank you very much. Thank you, Mr. Chairman. Mr. Kelly, you're recognized. Thank you, Chairman. First of all, thank you all for taking time out of your lives to come and talk to us. Um, Mr. Burton, your testimony mentions that 860,000 Medicare patients with diabetes rely on biologics for treatment. Now, I'm a type two diabetic and so I share your concern that biosimilar development in this space is limited. From your perspective, what are the current disincentives the government has put in place that limit or prohibit development of new life-saving drugs?
▶ 0:54:39So I excuse me. So I think as you as you think about the incentives, you you have to think about the ecosystem for what's going to bring a product to market. So you need to think about the development process. Is that development process working as quickly and efficiently and predictably as possible? Today, no. FDA's improved, but but there's more that can be done to streamline that process. Um you need to make sure these products can get to market.
▶ 0:55:06Um folks have mentioned patent thicket humir is a great example 100 plus patents on that branded product. Um that's going to be challenging for a biosimilar to overcome through patent litigation. Um so looking at patent reform um to address the the uh use of patent thicket and then looking at predictability for adoption. Um you talked about uh diabetes.
▶ 0:55:32If we look at the first biosimilar insulin had prices about 60% less than the brand product. Um we did some analysis of this about two years ago and in the time window we looked at about 60% of the prescriptions that were written for that type of insulin were written for the biosimilar but the biosimilars were only filled about 30 to 40% of the time because the PBMs were blocking those claims
▶ 0:56:02and pushing those those claims over to the branded product. So you have to have that predictability and that clarity that when there is a lower cost biosimilar on the on the market, it should be the assumption that that's what a patient is getting first. Thank you. I uh I'm going to yield the rest of my time to Dr. Murphy because he uh he's in this business every day and it is truly a business. I know it's about keeping people healthy and keeping people to be productive. But um I'm going to seed to Dr.
▶ 0:56:31Murphy because he does this every day of his life. Dr. Thank you, sir. Um I I had a great talking about NIH funding. I had a great discussion with Jay Barachario this uh this Sunday and about NIH funding specifically and sadly enough this is how politics have poisoned medicine.
▶ 0:56:49The acting director of the NIH before Jay came in decided as he was a Fouchy acolyte decided he would poison all of the funding streams now and applications such that they're now two months behind. Thankfully, we're going to try to get these backed up by his standards up to May. But that's the number one reason, Dr. Kessleheim, that funding from NIH has not been done. And by the way, Harvard has, last time I checked, a $52 billion endowment.
▶ 0:57:16So, if there are any shortfalls in funding, rather than being a real estate company, Harvard might look to outf funding their own research. That said, I'd like to talk about the other issues that are going on today. I think everybody has highlighted the number one problem here and that's the middleman is now destroying American medicine. PBMs, 340B, so many of the other programs have gotten in charge of all of this.
▶ 0:57:38Now I I want to talk a little bit about what's happened with the IRA in reality and some drugs that cost two billion drug two billion dollars to bring a drug to market. Now with the 913 rule, we've had 49 research programs. Talk about research stopping. 49 research programs and 24 drugs have been discontinued because of the passage of the IRA.
▶ 0:58:0078% expect to cancel early stage pip pipeline projects because the small molecule drugs are not funded long enough to be able to reach their runway for drugs. This is what's happened since the IRA has come into effect. 70% of small molecule funding has gone away. Whereas opposed to biologics have received 10 more 10 times more funding. Meaning that they get 13 years to recoup their losses.
▶ 0:58:26The small molecule drugs, the pills, those things that people can take at home, which given in a rural community, people would absolutely prefer rather than driving two hours to hospital and getting then a 2-hour infusion. This is what we should be funding. And I think and I hopefully it was not done nefariously by anybody who crafting the IRA but this is one of the side effects that has happened about this.
▶ 0:58:51I'm going to give a good one good example about why the IRA was bad because you can't do you can't do other indications for drug. Kituda which has absolutely changed the oncological world was first started out in my in my best recollection as a drug for metastatic melanoma. It now has over 41 approved indications for so many other different types of cancers. If the IRA were in effect when Katruda came out, we would have none of these.
▶ 0:59:21None of these because there would not be allowed to be an investment in any of the other indications. So I want to talk a little bit more when it is back to my time. But the IRA while helping trying to drug cost was so poorly designed it's actually killed American medicine. yield back. Mr. Thompson, you're recognized. Thank you, Mr. Chairman. I want to thank the witnesses for being here uh today and Dr.
▶ 0:59:45Edertton, thank you in addition for your military service serving in the best branch of the United States military. Um I'm struck by the fact that we're having this hearing about the health of biosimilars uh market when this administration and our house majority colleagues continue to take steps to undermine both biosimilars uh as well as all healthc care.
▶ 1:00:10The one very good example of that is the uh threat of tariffs coming out of the white house on the pharmaceutical industry. And I want to submit for the record, Mr.
▶ 1:00:22Chairman, uh both a newspaper article talking about it and the testimony uh of the president uh that he gave on uh in February at a signing ceremony at the White House where he says that uh he wants to increase tariffs on pharmaceuticals uh up to 25% or higher. The administration had just eliminated 3,500 FDA employees last week. And Mr.
▶ 1:00:50Chairman, I'd like to enter for the record uh the uh article on that. Thank you. Um the administration announced cuts of $4 billion a year to NIH research. We've also heard heard today how that is harming things. Uh and it's not just NIH. Uh I've got an a research institution in my district, one of the universities of California, uh who's doing just incredibly important research on Alzheimer's, on cancer, on spinoipida.
▶ 1:01:20All of these institutions uh are the recipient of these draconian cuts uh that harm the people that we were elected to serve. Uh so how are you supposed to find innovative treatments and cures while undermining our research institution? And to make it even worse uh our majority colleagues are trying to do this because they want to increase tax cuts for the richest people uh in the country.
▶ 1:01:50How are you supposed to get a prescription uh for a bio similar or for anything else in that matter if you don't have health care coverage uh to go see your doctor? Um this week the majority is planning to vote to give the Musk rich likes uh a big tax cut while taking away health insurance from hardworking Americans. But make no mistake, these cuts to Medicaid are going to hurt every American.
▶ 1:02:17and one in three people in California rely on on Medicaid. But the fact is three out of three people in California will be affected by it. I've heard from health care providers throughout my district that if these cuts come to fruition, what's going to happen is at worst they're going to close hospitals. At best they're going to cut and restrict services. So it doesn't matter where you get your your health care.
▶ 1:02:44If you go to a hospital and the services have been cut, doctors have been fired, you're out of luck. It is uh it is going to be devastating uh for all of our uh districts across uh the country. There's already a shortage for health care providers and this just exacerbates uh that. Um Dr.
▶ 1:03:04Kissleman, I'd like to ask you um can you explain if we cut Medicaid funding as has been proposed, what would the impact to patients ability to access care including bioimilars if we uh that we're discussing here today?
▶ 1:03:23I I think it would be completely devastating for patients abilities to access drugs if if we make the kind of cuts to Medicaid funding that have been that have been discussed uh that uh in Washington because um Medicaid budgets operate on uh on fixed bud Medicaid state budgets operate on fixed budgets and if they're cut then they're going to have to cut services and one of the first uh services that they're going to have to cut are going to be the provision of coverage for for prescription drugs and if people um with low incomes are no longer provided with Medicaid coverage to be able to afford
▶ 1:03:53their prescription drugs, they're not going to be able to get the essential medications and bioimilar medications that they need. Thank you very much. I heard from healthc care providers uh and recipients throughout my district. I heard from a woman who uh Medicaid pays for her wheelchair, that is the reason why she's not homebound uh or institutionbound. Uh in which case it would cost a lot more than the cost of a wheelchair.
▶ 1:04:21I heard from uh one hospital who said, "Government payers make up 70% of our revenue. Without it, we'll have to slash services for everyone in our community." And from a provider who said, "Without insurance, people don't get the preventive care that they need and they end up with more serious conditions uh that are far more expensive." And from a mental uh mental health care worker who said mental health services keep patients at home and contributing to our community.
▶ 1:04:50If those services get cut, more people will go without care and end up in our criminal justice system. This is serious stuff and these are the things that we should be talking about. Thank you, Mr. Chairman. I yield back. Dr. Murphy, you're recognized. Thank you, Mr. Chair M. I'll get us back on topic if we can. Um, just a few minutes ago, I just talked about the middlemen. The insurance lobby is the greatest lobby in this town. It's disgusting to be very honest with you what's going on. Um, I wonder if uh Dr. Dr.
▶ 1:05:19P, can you talk a little bit expand about the abuses about the 340B program because I want to hit if we can I want to hit the 340B program. I want to go back to the IRA and I want to hit PBMs and then I want to ask Mr. Burton about hum. So let's just try to do that real quick. Thank you Dr. Murphy for your opportunity to um to answer this question.
▶ 1:05:38Uh the 340B program as you know started um by the public health services act um with the intent of you know uh spreading uh limited resources to serve vulnerable patient populations but that service is not written is not uh written in statute. It's not enforceable.
▶ 1:05:55Um and so what we see is a tremendous arbitrage opportunity uh for disproportionate share hospitals that participate to um buy low and sell high creating financial incentives for um uh for purchasing originator products at a higher cost because that gap is much higher. And you talked about Pimberlyab um Kruda big fan of Kruda. I was the n national principal investigator for the trial that got it approved to treat breast cancer.
▶ 1:06:22um uh uh you know there is a 340B entity that is reimbured by commercial payers at uh 600% of ASP that purchases that drug at a discount. So in other words with the 340B program is picking winners and losers. Yes. Because it's it's it's uh definitely pushing universities or bigger practices hospitals etc over private practices which is in my opinion much more of a an efficient delivery of care. But but thank you um Mr. Mr. Burton, can you talk a little bit about you were saying about Humumera?
▶ 1:06:53Why is it that not able you are not able really to prescribe the the biologics compared to hum in a in a private setting? Sure. So I I think that what we hear is not an unwillingness to prescribe, it's an unwillingness to cover.
▶ 1:07:07So if you if you look back at Humera um in the first about 15 months of h of the biosimilars being on the market again with prices at 80% lower lower list price um the market share after one year was at about 2% for all by a similar share of the humor market and the reason is because the big three PBMs were not touching it at best they were covering it at par but par doesn't give a patient Why why
▶ 1:07:38were they not touching it? Because they couldn't make money on it. It it was about the the rebates and the fees that they could get on the branded product. What we actually saw if you if you peel away the data you actually in the time the biosimilars have been on the market you've seen more patients switched to the newer higher cost brand products product hopped than switch because get reimbursed as a percentage of the drug cost and because of the because those rebates are often
▶ 1:08:08bundled on all three of those products rather than comparing the product at the unit level cost where biosimilars are consistently lower price whether you're looking at the high price high rebate or the or the discounted option. Well, we we have great legislation. It is bipartisan biccameal to be able to try to fix the PBM conundrum here.
▶ 1:08:30Um again, started out as a good idea just like MA plan started out as a good idea, but insurance companies come in and they abuse the privilege of pro helping us provide care to the American patient and that needs to be stopped. So, thank you. Um, Dr. Educin, can can you explain to the committee what it means the buy and bill part because I don't think I I understand it obviously a ran a practice but I don't think the committee folks could do that. Can you understand what that means? Yes, thank you for the question. I'd be happy to.
▶ 1:08:56Um, so the buyin bill is when a uh medication is administered in the office setting. The office has to acquire the medication, administer it to the patient and then be reimbursed for it. So the buying the medication and then billing after the after the fact. Um and because of that the practice takes on a substantial risk in acquiring the medication and then having to negotiate the reimbursement.
▶ 1:09:20Um, the ASP system previously had worked extremely well in controlling those costs because any concession that was made by a manufacturer to any other entity in the process of um selling their medication, whether it was a rebate or a price reduction within a couple of quarters would be included in the reimbursement dictated by ASP.
▶ 1:09:44So that typically brought drug costs down and in a ve very effective way and that's part B again by bill is part B compared to the pharmacy benefit called part D. What you saw in part D for example with Humira is the cost of that medication doubling over time. Whereas in part B which is the buy and bill side a similar medicine in the same class called the TNF biologic had a consistent reduction in cost over time. Right?
▶ 1:10:13So what we're see I'm sorry we're going to have to wrap up here is basically kind of a whack-a-ole approach of what we're having. You know I all I think everybody on this entire dis wants to bring drug costs down. Absolutely. But we also at the same time want innovation. We want new cures. We want to be able to do the things look at oncology from compared to 15 years ago is light years ahead. But if we stop the progress boom that's dead. And so again thank you all for coming. Appreciate your expertise. I'll yield back. is true.
▶ 1:10:42You recognize Dr. Kelheim, today's hearing is about expanding access to life-saving medicines. Well, for decades, the National Institutes of Health or NAH has brought lifesaving treatments to millions of Americans suffering from some of the deadliest diseases.
▶ 1:11:01Yet, every single Republican is standing idally by as President Trump and Elon Musk terminate hundreds of NIH grants for scientific research, attacking the very heart of pharmaceutical innovation in this country and the consequences are being felt across the country. Recently, I heard from my constituent, Dr. Kelly Quan about how Trump's cuts to NIH funding effectively put an end to her research.
▶ 1:11:31See, she's a pediatric surgeon and an NIH funded researcher who is conducting studies on the effects of prescription opioids on critically ill infants. And it's about understanding the relationship between genetics, opioid use, and brain development in critically ill infants so that we can know how the how we could have safer treatments for our most vulnerable patients.
▶ 1:12:02However, she was informed last month that the study section scheduled to review and score her grant was abruptly cancelled with no immediate timeline for scheduling. In other words, it just wipes out the grant. So, Dr. Kessleheim, what impacts will mass terminations of scientific research grants like Dr. Kelly Quans have on American innovation? And how will these cuts impact patients ability to access and afford life-saving medicines?
▶ 1:12:29Yeah, I think these are great examples of very devastating cuts that you're talking about. The NIH's budget, everybody, is about $60 billion per year. That's per year. So that they this is this for this this funds essential research into basic and translational science. It also funds later stage research into product development um proof of concept testing um even clinical testing that have been essential in bringing some of the most transformative drugs that we have for all kinds of diseases.
▶ 1:12:58Cancer, eye disease, rheumatologic disease, every um every field of of uh of medicine you can name um has has key life-saving therapies that owe their origins um to funding made by NH. concept that that could be replaced by by funding from individual institutions um is just not not not available just because of the the massive scale and the amount of of of of such great outcomes that we've gotten from that investment. Thank you for that.
▶ 1:13:26Now, last week we saw President Trump, Elon Musk, and HHS Secretary Kennedy fire 10,000 dedicated people at the Department of Health and Human Services just for doing their jobs. lines at HHS buildings wrapped around the block as hundreds of workers showed up only to learn that they were fired when their badges didn't open the door. Others woke up to an email at 5:00 a.m. telling them they were out of a job after years or even decades of service.
▶ 1:13:56So, Dr. Kessleheim, these mass firings include roughly 3,500 employees at the Food and Drug Administration. How will these sweeping cuts impact the FDA's ability to approve new biosimilars and ensure their safety?
▶ 1:14:12I I mean the the work that the FDA does not only in reviewing the specific details of individual applications but also in keeping a breast of scientific information to try to understand what is safe in terms of uh of making of of generating approvals um and what kinds of studies that that biosimilars can do in order to give good advice to the biosimilar manufacturers.
▶ 1:14:33All that work is essential and I think that a lot of the witnesses here today have talked about the importance to biosimilars of streamlining the FDA process and of getting a very thoughtful FDA process in place to be able to get biosimilars approved. We can't have that without experts at the FDA who are who feel secure in their jobs who are appropriately uh compensated for their expertise and who and just to have enough staff to actually do the essential work that the FDA does.
▶ 1:15:00All of that is at risk because of the current policies and the and the firings right now that are that are going on um both at the FDA and then you mentioned the other institutions as well. the the NIH doesn't just fund science, it also does science and it stays a breast of the science and and if there is there are people that are are fired indiscriminately from from NIH and CDC um then that makes it harder for for the for the the for the for those um organizations to do the work that they need to do internally as well as give out the funds that they need to give
▶ 1:15:30out to the scientists around the world around the country. And Dr. Kessleheim, I appreciate the fact that you highlighted how the Inflation Reduction Act, which passed without a single Republican vote, is working to bring down drug prices for millions of seniors. Uh my uh my constituent who used to pay $1,500 annually for insulin, insulin, now pays only $35 a month. And thank you for mentioning that. And I yield back. Mr.
▶ 1:16:00Hearn, you're recognized. Thank you, Mr. chairman for holding this hearing. I'd like to thank the witnesses for being here today. Bioimilars offer increased choice for patients and lower cost for the individual and health care system as a whole. Biosimilars are prime example of innovation in the United States health care system. These drugs require complex manufacturing process and lengthy approval process. But with nearly 70 of these products being approved by the FDA within the last decade, it just goes to show the value seen in developing these treatments.
▶ 1:16:30These drugs offer patients a lower cost option and create competition within a drug market. The numbers speak for themselves. Since the first biosimilar was approved in 2015, it is estimated that biosimilars have saved the US health care system 23.6 billion and led to an average 25% decrease in biologic prices. Congress should do everything we can to support this type of innovation.
▶ 1:16:54Unfortunately, like too many other things, unintended consequences from lawmaking have negatively affected the bioimilar and generic market. As as we've heard today, Medicare reimbursement models are hurting utilization of biosimilars. Something we as Congress should examine and address. In my opinion, something that is even more harmful to the biosimilar and generic market is the IRA, the inflation reduction act. We've already seen effects of the IRA in the small molecule market with uncertainty due to price sitting halting the development of new treatments.
▶ 1:17:24I'm extremely concerned that in the near future biosimilars will follow suit. The IRA has weakened incentives for manufacturers to go through the arduous process of bringing a bioimilar to market. Without these incentives, patients will not have access to these lowerc cost drugs and the US drug market will lose the competitiveness we have been trying to promote. Mr. Mr. Burton, what impact do you expect Medicare price settings to have on future investment in development of biosimilars and what specific barriers do you see for companies trying to bring a biosimilar to market?
▶ 1:17:56Thank thank you for the question. Um you you mentioned incentives. I I'd say predictability. The issue is predictability. Let me put it this way. Um it you know we we believe biosimilars are going to generate greater savings than price negotiation. I think that's borne out if we look at what's out there today where Stellara through price negotiation landed at I believe a 65 66% discount compared to list price.
▶ 1:18:22Today there are five five or six biosimilar versions of Stellara at an 80% discount and we're all of three months into that market uh beginning. So we think biosimilars are going to deliver greater savings. The issue though is predictability. What kind of market are you entering? So, let me put it this way. If you're thinking about a $300 million investment today that is going to uh uh you know, where you're going to come to market 10 years from now, you want to be able to predict what that market's going to look like.
▶ 1:18:53There's a big difference if you're looking at a market that is a billion dollars in annual sales versus a market that is say $400 million in annual sales. And because of you buy similars are already dealing with a number of uh areas of uncertainty when they go into this but the price negotiation process uh laid out in IRA provides zero guidance as to what that price will be.
▶ 1:19:19So you have to assume that a product is going to be negotiated but you have no I no way of predicting what that price will be and it's a big difference if you're again looking at a price cut from say a billion dollars to $800 million or a billion to $400 million that's going to affect your investment. Thank you. Uh a 2021 report from the National Organization of Rare Diseases found that 25% of the 552 orphan drugs and biologics on the market are approved for more than one rare disease.
▶ 1:19:49Thanks to additional uses discovered after initial approval under the IRA, companies have no incentive to explore these additional uses because their risk price setting once an additional orphan designation is granted. Dr. Pat, are you concerned that this dis this incentive could hurt progress for the 95% of rare diseases and rare cancers that are still without treatments?
▶ 1:20:09And then if I could while you're answering that uh would excluding the orphan drugs from the drug pricing negotiation program as the orphan cures act does help provide certainty in this market and create incentives for manufacturers to look for additional indications of a molecule. Um I do think uh that there is a risk uh for follow-on indications when you have a drug developed. I think a great example of that is Kruda or PMlyab that Dr.
▶ 1:20:36Murphy spoke about before originally um you know approved I think it was in 2014 for the treatment of metastatic melanoma subsequently kidney cancer I I think it has actually 14 different cancer indications now and now we see you know imotherapy approved across I think 28 different indications so you know we all know the story of Jimmy Carter and his wonderful response to Pimberly Zzebab and we know that story but I'll tell you my own husband is a cancer survivor of uh eight years of metastatic kidney cancer because of
▶ 1:21:06pimberly mapab. So, thank God they had investments in continued approval. Again, I served as a principal investigator to be bring it to breast cancer. Those additional follow-on indications become less likely if um if there is less incentive in the future. And so, I do think that orphan drugs require special attention. I do think attention to a carveout would provide incentives for for development to continue. I worry without those incentives, it's hard for um it's hard for people to invest in that research and development.
▶ 1:21:37Thank you, Mr. Chairman. Thank you again to the to the witnesses for being here. I was going to go at the end, but I wanted to ask because I don't want to lose everybody. I want to get your thoughts. A little off subject, but something I'm interested in. Uh most of you know have heard of Senator Bill Fris. We had him as a witness earlier in the year. He's a heart surgeon out of Tennessee, but he I think he he was also uh one of the leaders big leaders in in terms of the Senate. Uh his philosophy now has changed quite a bit where he's a lot more about food is medicine.
▶ 1:22:08Uh that a lot of the prescriptions that he wrote tens of thousands never wrote a prescription for food was just for drugs. He looks back on it there should have been a lot more in terms of nutritional food. You got, you know, uh, children at 20% obesity, adults at 40% obesity, uh, and these numbers that everything seems to be going the wrong direction even though we're spending 4.4 trillion on healthcare. And you can look around the world where our our results are not that great.
▶ 1:22:35And here we are talking about, you know, drugs and other things. Not not to say they don't do a lot of great things. I got take a few few of them myself. But my point is what is your thought about any of you if you want to just pipe in a little bit in terms of the idea of food is medicine meaning that we need more nutritional food. A lot of the stuff that people eat nobody's fault but a lot of it's garbage. So just my opinion but uh Dr. Pat um thank you.
▶ 1:23:02I think that um as Ben Franklin said an ounce of prevention is worth a pound of cure. And I think that whether it's cancer screening or having a healthy diet and exercise, we can't underestimate the value of these um of these initiatives in preventing chronic disease. It's critically important. I do think modern medicine is maybe uh not emphasized that as much as one should.
▶ 1:23:26Um though I will say pertinent this hearing certainly does not take the place of the need for the development of innovative therapies. But I think all of those things are critically important. Again, an ounce of prevention is a pound of cure. We need to be making sure we're educating our patients on the right steps to prevent disease. A lot of people feel or some people I should say feel that we'd have a lot less cancer, a lot less heart disease if people were had a better nutritional diet.
▶ 1:23:53Uh or from that standpoint, we see actually that um uh cancer among young adults, so those less than 50 is increasing at a rate of about 1 to 2% per year. right now. While we don't know all of the causes, we suspect a lot of that is because of diet and sedentary lifestyle. Um, so I think that the best evidence supports that we need to be emphasizing prevention quite a bit more. Um, though again, that's not to say that we don't need to continue to invest in innovative therapies.
▶ 1:24:21I'm not saying that, but I think that, you know, when you look at the our numbers are off the type two diabetics are off the charts. Yes. And so, and I think in I look at one of the things I've got 10 grandkids 10 and under, and I just think about the idea that the a lot of kids today their obesity rates are 20%, it used to be three or 4%. So, there's a lot more we could do. Anybody else want to weigh in, doctor? I'd be happy to comment on that. I I completely agree. I think that the lifestyle issues, um, that's what I'm talking about.
▶ 1:24:51Where we can intervene and and help to prevent some of these diseases are critical. Um and and I think that focus is growing. Uh there certainly is a lot of interest among patients um in rheumatology coming in asking about things like anti-inflammatory diets. Um are there different foods they can eat to prevent their gout, things like that.
▶ 1:25:10Um so I'm glad that we're seeing that interest and um and that we can, as we've said, merge that with um the pharmaceutical and other treatments that we have available and really try to keep our population more healthy. Mr. Burton, you have anything you want to add? I'll defer to the doctors on this panel. Okay, doc.
▶ 1:25:28I I uh I just want to add I think I agree with everything that's been said thus far about needing both uh healthy access to food and healthy nutrition and as well as drugs because there are some you know diseases that patients can't control that they uh that they still um you know are are afflicted with that we need to help them with. Um but I also want to point out that it isn't just uh necessarily um on on just on patients and their lifestyle but also on the circumstances in which patients live.
▶ 1:25:54There are um places that are underserved uh by uh um you know with their ability to to obtain access to healthy food. Um, and there are corporations in the in the sugar industry and in the agriculture industry um that benefit from selling uh uh unsafe products to uh to patients that they can that that then uh that patients don't even realize that they're consuming um that contribute to this as well.
▶ 1:26:19Uh and that's why you know we need um uh the you know the sort of social supports that are necessary to provide patients with access to health. close on this one point just uh with just my own experience. You know, you go through life especially in the 40s and 50s and your weight's up and down. You got to kind of seem like you take your mind off that then you're all 10 15 pounds heavier. Uh one book that I read changed my life uh permanently and it had an equation in there and the top of the equation was the nutritional value of the food.
▶ 1:26:48The bottom of the equation was calories. What is the most nutritional food with the fewest calories? and you go down that lane, you make better choices. Of course, all the greeny leafy greens and all that are in there, but you make better choices. And uh you know, I dropped 30 pounds and that was 20 years ago. Never looked back. And I don't I'm not bragging on myself, but not about that. But I am concerned about where we're going as a country. We're spending $4.4 trillion dollars, 20% of the economy. And you can make the argument we're getting sicker.
▶ 1:27:18So something's got to change. And it's not anybody's fault per se because a lot of the food that's prepackaged food out there, there's no nutritional value in that food. That's just my my own opinion. Thank you. I appreciate all of you guys. And we'll go over to Mr. Dr. Kell, some of the key key traits made Philadelphia a leader in drug development on these research institutions.
▶ 1:27:47our strong biologic medical section of development and the quality of researchers and our higher institutes. Can you point out specific action that the Trump administration has taken to weaken drug research and development in the US Philadelphia? Absolutely.
▶ 1:28:09I mean I think that that the uh the the reduction in um in funding um for uh for research in this area has been uh has been astounding. Um there have been um there's been a reduction in in uh in the the giving out of grants that were already um that were already provided that were just stopped. Um, you want to talk about waste, that's an enormous waste of all the time that already went into that product um to just be to just be or to into that grant and into that line of research to just be stopped.
▶ 1:28:40Um, there's uh people that have been let go um and there have been um Alzheimer's disease research centers, for example, have been shuttered because of uh of lack of funding over the last over the last couple of months and stopping of of lines of research. Um and this is happening in uh in all uh in in in settings all around the country.
▶ 1:29:00Um and uh and we need to be extremely concerned um about the effect of that on our ability to to develop the the next uh the next generation of cures. Dr. Burton Peter Marx was a leader in FDA oversight on this area of research and development. He was recently pushed out by the Trump administration. Mr.
▶ 1:29:27Burton can also elaborate on how the lack of strong scientific leadership made this a harmful to private sector research firms and drug manufactured in general by drugs to patients. Uh thank you for the question. Um so certainly we have a number of questions and concerns about uh some of the changes that have uh happened over there.
▶ 1:29:53On the one hand, we're glad that um uh reviewers are still in place, but there are a lot of roles that support those reviews that allow those to occur efficiently um that may not be there and may slow uh that. So, we're um carefully paying attention and concerned about any changes that could undermine the FDA's review process and the predictability of that review process.
▶ 1:30:22Trxton University Department of Pharmaceutical has reduced the number of graduate students they have admitted because of Trump's reckless action with HIA. Dr. Kesler again can you please elaborate on what trumps interruption in research funding for the long-term development of drugs in the city of Philadelphia in the US?
▶ 1:30:48Uh, of course I mean I think it's really uh it's really a tragedy right now to look at the uh at the state of play if you are a uh you know a new researcher coming out of your PhD program or even considering whether to do a PhD program.
▶ 1:31:01Um there was a survey done um it uh in the the journal Nature uh of over 1,600 scientists um that found that that in the last couple months as a result of the changes in the environment many of them are looking for work in Europe and Canada um to try to figure out if they can continue doing uh the research the essential research they want to do outside the United States.
▶ 1:31:21I think the the impact of of these kinds of uh of uh of indiscriminate firings and cutings um on the workforce and uh and people's you know interest in in go pursuing science and interest in staying in the in in doing these essential um essential work that they're doing in um in academic research settings like Drexel um or many other places around the country um is another really important part of this.
▶ 1:31:46This isn't just about the work itself uh but also about the investment in people and the investment in the resources who who develop the ideas um that are ultimately going to be uh the ones that that serve as the basis for for future treatments. Thank you, Mr. Chairman. Miss Miller, you're recognized. Thank you, Chairman Buchanan and Ranking Member Dogget. And thank you all for being here today.
▶ 1:32:12The majority of my work in the health care space is really focusing on ensuring robust patient access to care, particularly for rural patients. I'm from West Virginia. In my district, the median household income is 52,742, which makes my district one of the most financially constrained in the country. 1.2 82 million people in West Virginia have at least one chronic disease.
▶ 1:32:42In a state of only 1.7 million people, that means that most West Virginiaians are on a tight budget already. Therefore, they also have to consider the potential high cost of managing their health. Bioimilars seem to be a great option that can help reduce patient costs.
▶ 1:33:02But it appears from your testimonies that we have some work to do making to sure that the patients and the providers are educated on bioimilar options and the insurers are putting these drugs onto their formularies. Dr. Pat, sometimes it seems the determining factor in a patient getting access to certain therapies is the physician's awareness that the therapies exist.
▶ 1:33:28Is there a new biologic on the market that can save a patient money, but a position physician doesn't know about it or doesn't really know how to explain it to their patients, so they don't recommend it? With growing patient and physician awareness of these bioimilars, have more patients been acting asking to switch? And if not, do you believe patient awareness of lowerc cost alternatives would incentivize them to ask to switch?
▶ 1:33:56It's a great it's a great question. I do think that there is an educational opportunity though I think that um uh there is well um uh the medical community is wellversed in comparison to a decade ago regarding biosimilars and I I'd mentioned earlier but I think actually that conversation has gotten a lot easier though there are other barriers that um that we face.
▶ 1:34:20So for example, if I have a patient that's on um Tresismab or Herceptin to treat metastatic breast cancer and I talk to them about switching to a bioimilar product and I write for one, uh frequently the insurance company will prioritize the pharmacy benefit manager will prioritize a specific bioimilar that we're underwater on meaning that our costs exceed our reimbursement that doesn't uh we're not able to pick that choice because of viability.
▶ 1:34:48So, so yes, I think there's a role in education, but there are other barriers um that I think lead to suboptimal utilization. So, between the patient and the insurance company, there needs to be communication. Dr. Edgton, what are the most common questions patients act ask when considering switching to a bioimilar? Is cost the driving factor? Uh typically patients are most interested in the potential side effects of the drug.
▶ 1:35:18Is it going to um be the same as as what they've been on? Um and the efficacy. Um for our patients in rheumatology, these patients are typically on a biologic agent for many years, if not their entire life. Um, so there can be consternation if they're on one particular agent and um they're considering switching or their insurance plan is uh maintaining a switch. Um, so those are generally the the topics of of conversation.
▶ 1:35:47Um, when it comes to price, interestingly, I haven't heard as much from patients. I don't think potentially there's the understanding of how access can improve as these costs come down. Um and that is something I enjoy uh opening uh that conversation with them um and and explaining that.
▶ 1:36:06But as we've said a lot of that opportunity has been squandered because the formulary construction is not allowing patients access to the biosimilars and when the biosimilars are favored on a formulary the economics now are upside down because as Dr. Pratt had mentioned with back back uh door rebates moving from the manufacturer to the pharmacy benefit manager. Now the uh cost of the drug is actually higher than the reimbursement.
▶ 1:36:35So it's um a very strange situation. Thank you. Price competition is very important for patients especially for the rural patients such in my district. The inflation reduction act included a potential pause in price setting for certain bioimilars, but the process is complicated and may not provide the predictability needed for biologic and bioimilar development. Mr.
▶ 1:36:58Burton, can you speak on how important clear and consistent lawmaking is for the development of a strong bioimilar Absolutely. Thank you for the question. So again, you know, for a for a biosimilar manufacturer, if you're thinking about investing $300 million in a new uh in a new lowerc cost product, you need predictability. You need to know that that market's going to be there 10 years from now when you actually uh get to the end of that race.
▶ 1:37:27Um uh you know, that means you need to know what the you need to be able to guess what the market size is going to look like. It also means you need to know you're going to get uh uh adoption. So, not only do biosimilars face all the issues we've discussed today. Um but the IRA puts in place what I think was a well-intended approach that will harm biosimilar adoption. Thank you. I'm sorry I have to yield back my time. No Mr.
▶ 1:37:56Fitzpatrick, you're recognized. Thank you, Chairman Buchanan for holding this timely hearing. Thank you to our witnesses uh for being here um on this really really important topic uh particularly when it comes to lowering costs for patients while improving patient care specific to cancer treatment which is a continually uh evolving space uh it's important that we discuss and and educate on the utilization uh biosimilars my colleagues uh representative Miller just raised uh
▶ 1:38:27compared to biologics uh in the cancer space um Dr. Pat um in your testimony you discuss how you've utilized bioimilar drugs um every day in your practice uh for your cancer patients. Can you speak uh to the benefit of bioimilars specifically um in the oncology space? Thank you for the question. Um absolutely.
▶ 1:38:50So um uh it offers the ability really biosimilars are are bio same biologically they're similar with with with subtle chemical differences. Um and so really it offers the ability to provide effective cancer therapy at a lower cost. Um so I will say it's critical to our mission uh to provide high value cancer care and that allows us to be more effective at that mission for the patients we serve.
▶ 1:39:17And when treating um cancer patients with biosimilars, do patients ever share concerns about the quality of this treatment versus any alternatives? uh sometimes they do and I think as a as their doctor it's our role to be educators to make sure that their questions are answered and they feel comfortable with their path forward.
▶ 1:39:35Um but it's been interesting to see this evolve over the last decade 10 years ago this was quite controversial and I would say today seldom do I get real push back and questions regarding prescribing the mo the more affordable biologically same bioimilar drug. Thank you Dr. Pat. Uh Mr.
▶ 1:39:53Burton, moving on to the uh the topic uh of patient affordability especially uh and how biosimilars can reduce out-of pocket um costs for patients uh particularly uh in the Medicare part B space there are instances of providers being discouraged from prescribing um biosimilars that have been proven to be effective. Uh Mr. Mr.
▶ 1:40:16Burton, your experiences particularly with uh building relationships with uh various patient advocacy groups uh and advocating for patient centered reform. Um how can the Medicare PartB system be improved uh to address these instances among providers and potentially incentivize um the utilization of biosimilars that have already been proven effective. Yeah.
▶ 1:40:40So I think what we've seen is that Medicare payment policy can drive can really encourage appropriate um uh choices. So if if you look at um adoption of biosimilars to date uh some of the work we did showed that providers who are participating in things like the oncology care model on things like um ACOs were more likely to use um you know these are these are payment settings where they're rewarded
▶ 1:41:10for using lowerc cost products. I think the challenge that's been described here is that um right now you have an ASP uh based reimbursement model that was built for brands and and we're trying to shoehorn biosimilars into it in a way that actually uh can penalize providers can leave providers underwater.
▶ 1:41:32So uh I think you need to look at things like the calculation of ASP whether rebates should still be a part of that when you're talking about biosimilars. Um look at the add-on payment look at things like uh shared savings uh demonstration where providers uh receive a share of the savings that would otherwise acrue to Medicare when they use a lowerc cost product. These are examples of of some policies that I think the committee could consider. Thank you Mr. Burton.
▶ 1:42:02Thank you, Dr. Pat. Thank you to all of our panelists for your time today. Mr. Chairman, I yield back. Mr. Davis, you're Thank you, Mr. Chairman. And I also want to thank all of our witnesses. Today's hearing is supposed to be about the prospect of bioimilar products as an opportunity for patients to purchase medications at a lower price. What are bioimilars?
▶ 1:42:29Well, they are similar versions of the Food and Drug Administration's approved biologic drugs that use the same manufactured technology and processes as the original biologic, but may have minor differences in their manufacturing process that offers patients lower prices for certain drugs.
▶ 1:42:51Unfortunately, it seemed to me that many Republicans want to divert, confuse, and bamboozle the American people into thinking that they have their best interest at heart. And they really want this to happen. What a contradiction.
▶ 1:43:10It is the Food and Drug Administration that regulates, reviews, and establishes guidelines for these products to be developed and marketed to consumers. How can the Food and Drug Administration continue to implement plans on bioimilars and other drugs and medical devices when President Trump just fired 3,500 employees last week?
▶ 1:43:40included uh scientists, researchers, technical assistants that advise and assist pharmaceutical manufacturers in following safe and regulatory procedures on behalf of the American public and the world.
▶ 1:43:58And what about the 1,300 employees of the National Institutes of Health who were fired for no logical reason and the pausing and a cancellation of billions of dollars of research grants to help prevent, treat, and cure the many current and future diseases that affect people in our country and throughout the world.
▶ 1:44:29Total silence seemed to be the path that many Republicans have taken. And some have embraced the president's effort to destroy the Food and Drug Administration and the National Institute of Health's infrastructure and the efficiency of these institutions.
▶ 1:44:52In my state of ille alone, Illinois, President Trump is planning to slash up 240.7 million dollars in NIH funding.
▶ 1:45:06NIH funds the University of Chicago and Rush University to operate the Illinois Institute of Translational Medicine, a partnership with Advocate Aurora Health, Illinois Tech, Lyola University, University of Chicago, and Endeavor Health.
▶ 1:45:27This collection reaches 9.5 million people and is designed to reduce the time it takes to develop and share new treatment and health approaches.
▶ 1:45:43Researchers at Northwestern University are using NIH funding to identify the first compound that eliminates the ongoing degeneration of certain neurons. If all of this is taken away, uh um Dr.
▶ 1:46:05Kelsey, could we expect corporations or corporate America to fund these stages of research? Uh, definitely not. And and I also just want to bring up a very important point that you made about the cuts to the NIH as it relates to biosimilars. There's been a lot of talk today about the very the small differences between biosimilars and and original biologic drugs.
▶ 1:46:29But because these are very large complex molecules, unlike with small molecules, those small differences can really make big big impacts on on the efficacy and safety of these drugs. And while for some biologics, we know that that that that those small differences are are safe for other biologics or for newer biosimilars, we might not know that.
▶ 1:46:50And that's why the role of the FDA in trying to understand when it is that we can safely approve biosimilars and when it is that biosimilars need more testing to ensure that they're safe and effective so that patients can rely on them are critically important and we can and and we cannot be undermining the work of the FDA in doing that kind of essential work and in helping guide corporations and and companies in doing that kind of essential work. Thank you very much.
▶ 1:47:16And it just means I guess what you do is far more important than what you say. Thank you, Mr. Chairman. And I yield back. Miss Tenny, you're recognized. Thank you, Mr. Chairman, and thank you to the witnesses uh for being here today. Uh and hopefully taking up the adoption of what biosimilars can do for the Medicare program. A tremendous opportunity for seniors, particularly in my district where over 235,000 people in my district are seniors on Medicare.
▶ 1:47:45So that's 30% of my constituency and uh many of them suffer from chronic conditions uh by some of the drugs that you've all mentioned today and the bio biosimilar uh similars represent a critical opportunity to reduce health care costs and expand access to life-saving treatments for patients and their families which we've seen uh despite their proven safety efficacy and significant cost savings uh with biosimilar sticker price averaging we've heard testimony today 40% less than their reference uh biologic biosimilars continue to face
▶ 1:48:15adoption challenges. Um, this is not just a cost issue for the Medicare program, but it directly affects patients uh and their ability to afford and access necessary therapies uh particularly those with chronic or severe conditions. As I referenced, while small molecule generics typically experience rapid adoption due to lower costs and straightforward formulary inclusion, biosimilars seem to be trapped in a complex market dynamic that all too often undermines their utilization.
▶ 1:48:44um addressing these uh the policies that hinder biosimilar adoption is essential I think and I'm thank you the chairman for doing this committee I first wanted to ask Mr. Burton and and right on this question which you've answered but if you could just say to me you noted the bioimilars can cost 40% less than their reference biologics yet abduction remains low.
▶ 1:49:04Why haven't the pharmacy benefit managers done more to adopt uh the biosimilars given the potential savings uh and for introducing them in formularies which in my district is filled with by the way not just a lot of locally owned and operated that are really under a lot of pressure from the PBMs. So, so where we've seen that most acutely is in the insulin and the hum uh markets where we have seen slow adoption.
▶ 1:49:31Uh and and really when you break it apart, you it's almost a clean dividing line between those plans and PBMs that are not rebate dependent and are early adopters. their their plans that uh do not use rebates and converted 90 plus% of their patient uh population to the biosimilars within months. Um you know the larger that are more rebate dependent have taken longer time.
▶ 1:49:59Do you think there are other financial incentives at play here other than the rebate issue? I mean I think it's rebates and fees. It's it's all of those any any uh value acrewing to the PBM that is based on the list price of the drug. Well, what would you do if you're in my position and our position on this committee? What would we present in Congress? What could we do to get biosimilars on to the formularies and and get that to happen? So, more access to seniors, less cost, extremely costly in the state of New York, for example.
▶ 1:50:28Uh what would you suggest we could do as a as a as a Congress to do that to to try to find these savings? Sure. So I think the presumption needs to be that patients should have access to the lowerc cost biosimilar first. Um this is simply common sense. There are various ways you can do that. You can do that. I think someone suggested um no rebates once a biosimilar is on the market. You can do that by um uh requiring that plans uh cover biosimilars first.
▶ 1:50:57You can even do that by by saying plans if you're going to cover a brand product when there's a biosimilar that's fine but you have to show CMS that you're covering a product that is a lower net cost at the unit level um where you you give the the PBMs and plans that flexibility but you create that presumption that they are covering and preferring the lowest cost product. Thank you. I appreciate that. Uh Dr.
▶ 1:51:24Pat, uh, I know given your expertise on oncology and the and the community oncology alliance, um, can you speak to the issues with the current incentive structure for providers uh, using bio similars under part B and the sort of buy and bill system and what steps can we take again? What do we what can we do to solve this problem? I mean, as you obviously 30% of my district are Medicare recipients and I'll be joining them next year, by the way. So, I care about this issue very much. Uh, thank you for the question.
▶ 1:51:52Uh so the current nature right now of u of reimbursement um is an add-on fee. Um and that add-on fee uh sometimes you still end up purchasing uh uh drugs uh that your your costs end up higher than what you're paid uh to give the drug that uh that causes a challenge in the marketplace. The other thing that's evolved which is a complex market dynamic in the biosimilar space but I'll give um pegfilrastm as a as a good example.
▶ 1:52:19This is a white blood cell growth factor that's used uh frequently to support patients through treatment as they receive chemotherapy. So a pegfil grass branded newasta um is a drug that you know came to the market there bioimilars on the market. Zextenzio being one that was rapidly adopted by community oncologists and uh because there were bio many biosimilars on the market the it did drive cost down the rebate structure was such that it was a it was kind of a race to the bottom.
▶ 1:52:46it quickly fell out of the marketplace because it was no long they were no longer able to make enough profits to continue to make the drug and there's been further market instability because udenica which is a an onbody injector in version of this um also didn't have a stable supply chain for the same reasons. So um so I'll say as a provider making a choice uh you're underwater sometimes and if there was an increase in reimbursement structure it would prov provide stability for practice viability.
▶ 1:53:17Thank you. I yield back. Thank you. I yield back. Mr. Moore, you're recognized. Thank you chairman. Um thank you to the panel today uh being here for very insightful as we talk specifics and unfortunately with healthcare policy we have to dig into the details. It's it's not it's not based in a bunch of rhetoric.
▶ 1:53:35Uh there should be plenty of of of common ground uh from either side of the aisle and um getting to the the root cause of increasing costs for patients is um I think at the core of what what we're trying to do here. Um I'm going to address some of the things that have kind of already been been addressed and so in an effort not to be redundant um feel free just to to to touch on a different aspect of it. Uh the biosimilar is an important aspect. It's important to my district.
▶ 1:54:03I represent um Salt Lake City which is a a really strong um very fast biotechnical industry and um it's one of the it it's something that we have to be willing to help them navigate these these unique waters. So uh still a relatively new concept in the pharmaceutical industry. Biosimilars. The FDA approved the first biosimilar only 10 years ago and there are fewer than 80 on the market now. uh patients aren't going to be as familiar um or may even be skeptical on these drugs.
▶ 1:54:32You you you touched on price earlier, Dr. Edgarton. Um you know, aside from price, any other major concerns that you hear from patients on and how do you address those? Yes, thank you. Um I think predictability is important for patients as well.
▶ 1:54:48Um again in rheumatology we're using these agents for many many years and one of the things that um can drive constrnation is if a patient has to keep changing um the biosimilars um as they proliferate there can be six or seven bioimilars for a single molecule. Um so we do have to think about that I think is when we're looking at uh lowering prices particularly for the patient access lower out-ofpocket costs.
▶ 1:55:16Um having a patient switch between seven different bioimilars over the course of their life may be an issue and it may drive some constrnation and that does worry me um to an extent. Um that being said um that's a little bit down the road from where we are right now. We're just trying to get access to biosimilars as they are. Excellent. Thank you very much. Um, Mr.
▶ 1:55:37Burton, as I mentioned, uh, Salt Lake City, um, we had a field hearing there last year, really, you know, growing industry with regards to biotechnical. Um, but no, but today, as of today, there are no biosimilars that have been developed in our state. And you you briefly you touched on this in Representative Tenny's comments, but just add, you know, again, from your perspective, what are the current roadblocks, disincentives that prevent manufacturers from developing these kind of drugs?
▶ 1:56:05um what could be improved in the process to to encourage uh development of biosimilars in in a market that is obviously very engaged in this in this area. Yeah. So so I' I' I'd point you back to the report that the IQV Institute released earlier earlier this year where they found that 90% of the brand biologics that are going to lose patent protection over the next 10 years do not have biosimilars in the in development. That should be deeply concerning to all of us.
▶ 1:56:35There are a lot of reasons for that. It would be real easy if there were kind of one magic bullet. Unfortunately, there's not. The reasons for that though in a word come down to predictability. Predictability of the review process, predictability of navigating patent thicket, predictability of what the market's going to look like when you finally get there in 10 years.
▶ 1:56:57um as you think about the impact of IRA and then predictability of are you going to be able to get adoption and is it going to be sustainable in the long run because we we're seeing with some of these products low prices are great but there is a point at which these prices are going so low that they become difficult for providers to continue using them because they're uh getting reimbursed less than they're actually paying for the product. Excellent. Thank you so much, Mr. Chairman. with a almost a minute left.
▶ 1:57:26I I'm going to yield back, but I'm going to come for those that minute one day. Okay, that's a deal. Miss Sanchez, you're recognized. Thank you, Mr. Chairman. Improving access to biosimilars is an important and a bipartisan topic, but I think it's intellectually dishonest to talk about lowering costs for patients when RFK Jr. is effectively bulldozing our biometrical ecosystem to the ground.
▶ 1:57:52American biomedical research is the bedrock of American progress and innovation. So, how does cutting NIH by 35% to the tune of about $2.6 billion, how does that lower drug costs? The NIH generates $2.56 in economic activity for every $1 invested in NIH research.
▶ 1:58:17That's a 256% return on investment for federal dollars. And I can't think of a single industry where that is the case. I'm still don't have an answer to how firing 3,500 FDA employees, that's one in every five people, improves patient safety as well as lowers drug costs.
▶ 1:58:45How does firing FDA's top vaccine official provide assurances for biioharmaceutical companies to invest in medicines? Here is what the president and CEO of Bio had to say on the removal of Dr. Peter Marx. And I'm quoting here. The loss of experienced leadership at the FDA will erode scientific standards and broadly impact the development of new transformative therapies to fight diseases for the American people.
▶ 1:59:15And we saw an immediate slump in the markets after Dr. Marx's departure. Novivvax dro dropped 6%, Surrepta dropped 10% and Madna dropped The center for drug evaluation and research within the FDA oversees bio biosimilars. This department streamlines the drug development process to ensure that patients have safe and effective drugs. Well, RFK Jr. decided to also gut this office.
▶ 1:59:45These career officials oversaw the development and the approval biosimilars. Dr. Dr. Kessleheim, how do the vaccine the I'm sorry, how do the vacancies impact the health of our biosimilar market? Well, first of all, I think the vacancies uh that across all the institutions that you're talking about make it harder for us to to have the essential discoveries that we need to develop the biologic drugs that will become the biosimilars of tomorrow.
▶ 2:00:14But then in terms of the specific vacancies at the at the FDA and the Center for Biologics Research, those vacancies make it harder for us to get biologic drugs onto the market because can you slow down and repeat that again loudly so the people in the back can hear that? Sure.
▶ 2:00:28the the the vacancies at the FDA, the firings at the FDA, the uh removal of of of funds from the FDA to do its work will destroy our uh medical establishment by making it harder for us to get the drugs that we need approved and onto the market. And it will undermine the confidence that patients and physicians have in those products.
▶ 2:00:51So that the the difficult conversations we're already having with patients about biosimilars will just become harder uh because they will now in addition will now wonder whether or not they went through a sufficient review process or were subject to the sufficient standards at the FDA. If the FDA does not have the independent scientists that it needs to to set down those guidelines and to review those um those applications in a timely fashion and to make those decisions.
▶ 2:01:19it it will will not be able to do that on the current path that the Trump administration has it on. Thank you. And how does this regulatory uncertainty impact a manufacturer's decision to invest in the development of biosimilars? I think it's far more than any of the other factors that have been discussed today. This is will be the most important factor that a manufacturers that will cons determine whether manufacturers invest in biosimilars because they will not know whether or not their product will be given a fair review at the FDA will be given a timely review at the FDA.
▶ 2:01:49They may look to develop uh products and submit them to other markets around the world. They may look to set up their manufacturing sites elsewhere around the world. They will not be able to rely on the FDA to do the work that it needs to do that that patients need the FDA to do. Thank you. In Medicare Part B, biosimilars have lowered prices for beneficiaries and the Medicare program by 62%. But currently, only 10% of BI biologics that could have biosimilar competition actually have it. Dr.
▶ 2:02:19Keslheim, how does the FDA's current interchangeability guidance impact biosimilar uptick? Are there any concerns with eliminating the designation entirely? Well, I think that that that originally there was a distinction made between bioimilars that were approved as being highly similar to to biologic drugs and biosimilars that could be automatically interchanged without any safety concerns and that was legitimate based on the science that we knew about biologics at the time.
▶ 2:02:47Over the past decade that science has evolved and we have become more comfortable with some biosimilar drugs being automatically interchanged and in those cases we need to have more flexibility to make those kinds of designations to try to improve fair uptake of biosimilars for which the science is there to support interchangeability. But without sufficient resources and good scientists at the FDA helping guide those decisions we simply will not be able to to do that with any confidence. I thank you for your testimony and I yield back.
▶ 2:03:17Mr. Kustoff, you're you're recognized. Thank you, Mr. Chairman. Thank you to the witnesses for appearing today as well. I think we've all learned a lot. Mr. Burton, if I can with you uh in your in your written testimony, you talk about a number of reasons that bioimilars are falling behind. One of which is the is the FDA.
▶ 2:03:42So, if I could drill down a little bit more, ask you to explain, and then if you had a magic wand over the FDA, what would you do to address and solve that Yeah. So, thank you for the the Um, I I I'll start where we left it. Right. Over the next over the last 10 years, the science has evolved dramatically.
▶ 2:04:08what we what we knew about biosimilars 15 years ago when the pathway was first written into law um is nothing compared to what we know today. So for instance um today I I think the biggest uh regulatory hurdle that you run into that that adds both time and cost to development is the requirement to do phase three clinical efficacy studies.
▶ 2:04:33That's something again that was reasonable at the time but I think we are learning more and more that that is not necessarily the um best approach for all bioimilars. Now should FDA continue to have that in their toolbox? No doubt.
▶ 2:04:50Um but we but today there are um analytical methods um that allow us to predict with far greater uh certainty how a product will behave in a patient than we're going to get out of clinical efficacy studies.
▶ 2:05:05So that's one thing that um removing that as a requirement um is uh you know on the part of FDA is is something that would move things forward and it would also reduce the cost of development because a big chunk of the development cost is in that phase three simply buying enough of the branded product to do that comparison.
▶ 2:05:28um reducing that uh timing but also reducing that cost is going to make this market more accessible to biosimilar uh developers broadly. So Mr. Burton, one other thing you you brought up is uh barrier to marketing. So can you can you explain that and and what are possible solutions to the marketing barrier? Yes. um humir is kind of the poster child for this.
▶ 2:05:55Um I I will confess I've lost count. I know it's a 100 plus patents that the uh brand had on hum. Navigating that kind of a patent thicket is simply um daunting to say the least for a biosimilar.
▶ 2:06:13Um there are ways you can address that by uh uh addressing removing the ability of brands to build these patent states uh um that delay entry. Um I believe if you look at the adelimmaab market those biosimilars launched several years earlier in Europe.
▶ 2:06:34Now you know certainly we are supportive of intellectual property and and innovation but there there needs to be clarity for when a biosimilar can come to market and not getting stuck uh in a hundred patents uh endlessly. Secretary uh HHS Secretary Kennedy has talked about banning pharmaceutical ads on on television. Assuming he he does that and he's got that authority and they are banned.
▶ 2:07:05How does that affect To my knowledge, biosimilars do not uh do direct to consumer advertising. That is typically a brand uh piece. So uh yeah, I probably don't have much to say on that one. Well, does that considering that and brands can't advertise if if you play that out, does that does that help biosimilars or is it no effect or how would you characterize it? It's it's a good question.
▶ 2:07:33I don't what I don't know is how much that advertising continues post biosimilar entry and I think that's the question I would want to understand is um is that advertising continuing after a biosimilar entries? I I think you know what we see as the big challenge really is is the rebate of getting access in the first place. Um uh you know but I think you raise a good question that that merits uh some exploration. Thank you Mr.
▶ 2:08:03Burton and Mr. Chairman I'll yield back. Mr. Stewie you're recognized. Thank you Mr. Chairman. Generic and biosimilar medicines drive significant savings in the health care system. In fact, use of generics and biosimilars have driven nearly 3.1 trillion in savings over the past 10 years. America's robust IP systems balances innovation and affordability, providing US patients with more medicine choices than anywhere else in the world, while ensuring medicine's cost remains a small, stable 14% of total healthcare spending.
▶ 2:08:32Owing to the success of the system, not only do we lead the world in the development of medicines, but we have a much higher rate of generic utilization in the United States. And they are 33% cheaper on average in the United States than in other developed countries with stringent price controls. But now the so-called inflation reduction act is replacing this carefully crafted balance between innovation and competition with price controls. Dr.
▶ 2:08:53Pat, uh, can you explain from your perspective as a physician how the current reimbursement system under Medicare PartB discourages physicians from choosing and using biosimilars? uh so reimbursement structure on the current Medicare uh part B uh system uh uh doctors can use biosimilars but what's happening in the marketplace is um as the cost goes down and average sales price goes down as as they're competing
▶ 2:09:24on price it creates uh a lot of instability in the market where average sales price by its nature is an average and uh if uh uh um uh practices purchase drugs they can't sell them uh they can't you know that you're underwater um on some of those drugs that makes it a difficult choice for some of those biosimilars.
▶ 2:09:45It doesn't it's not viable for the practice to to serve patients and so it's a challenging reimbursement structure given the tremendous competition on price in today's biosimilar market. Uh Dr. Edggerton uh in your experience when have PBMs favored bioimilars over that happens frequently.
▶ 2:10:06Um, currently for one of the medications we use for rheumatoid arthritis, most commercial insurance plans that are served by a PBM are requiring one of two biosimilars as the first line agent for treating that condition um in the part B office setting. Unfortunately, both of those bioimilars are underwater.
▶ 2:10:30So we wind up with this kind of perverse situation where the preferred medication which should also be the lowest cost medication cannot be obtained because of this situation where the acquisition cost of the drug is higher than the reimbursement. So it's not helpful that those medications are um required by the PBM so to speak um in that setting because the acquisition has been undermined. Mr.
▶ 2:10:57Burton, uh, based on your experience, can you explain why even under the drug price negotiation provision of the IRA, a reference product or biologic might be preferred for formulary placement instead of the biosimilar? Thank you for the question.
▶ 2:11:13Under the IRA, when a brand drug is selected for negotiation, goes through that negotiation process, um as part of it, it is statutoily guaranteed Medicare coverage um for the applicable payment year. The challenge though again when you look at the timelines that IRA sets in place and and I'll use Stellar as an example for this.
▶ 2:11:41Stellara brand biologic was in the first round of uh selection for price negotiation um ended up with a price uh negotiated price of - 66% off list price. Subsequent to that earlier this year um uh five biosimilars entered at list prices of minus 80% or more. So, so higher discount, cheaper products, right?
▶ 2:12:07But statutoily next year in Medicare, um Medicare plans are going to be required to cover the brand product even though there are lower cost biosimilars available. Now, they may be they may choose to also cover those biosimilars, but they're not required to. They're required to cover the brand product. And so, ironically, uh, you could end up protecting some of the monopolies that IRA was intended to get at.
▶ 2:12:38Have biosimilars been demonstrated to lower costs more than the government has been able to You know, it's in baseball terms, it's a small sample size. Um but yes, you know, again using that Stellara example, um minus minus about 2/3 versus minus 80% and we're three months into the market, so absolutely. Thank you. Thank you all for being here today. Uh my time's expired. Mr. Horford, you're recognized.
▶ 2:13:07Thank you, Chair Buchanan and Ranking Member Dogget. Congressional Democrats made historic progress in lowering prescription drug costs through the passage of the Inflation Reduction Act. This legislation marked a major turning point in how we approach drug pricing in the United States. Among many things, the inflation reduction act enabled the federal government to negotiate the prices of prescription drugs for the first time.
▶ 2:13:34This change alone is projected to save taxpayers $6 billion and Medicare beneficiaries $1.5 billion in out-ofpocket cost just from the first round of negotiations alone. The law also capped the cost of insulin at no more than $35 per month for seniors.
▶ 2:13:55This one provision is expected to save more than 1 million people over $700 It also put a stop to unchecked price hikes. Now, when drug companies raise prices faster than the rate of inflation, they're required to pay rebates back to Medicare. That's already saving some beneficiaries about $4,600 a day.
▶ 2:14:22Last but not least, starting this year, out-of-pocket costs for prescription drugs are now capped at $2,000 annually for Medicare beneficiaries. That provision was based on a bill that I helped advance, the Capping Drug Cost for Seniors Act, and it's delivering real financial security to millions of older Americans. But I agree, we must go further.
▶ 2:14:48That's why last week I introduced two bills to extend some of these critical protections beyond Medicare and into the private health insurance market. The first, the lowering the lower drug cost for families act expands the Medicare drug inflation rebate program by including sales of prescription drugs to privately insured patients when calculating required rebates.
▶ 2:15:15All rebate payments would then be returned to Medicare, strengthening the program's long-term solveny. The second bill, the Capping drug cost Act, would cap out-ofpocket prescription drugs at $2,000 per year for individuals and 4,000 per year for families with private insurance. We've made progress, tremendous progress, but there's more work we can do.
▶ 2:15:43And while me and my colleagues remain committed to reducing costs for all families, sadly the Trump Vance administration appears focused on destabilizing both the economy and the federal workforce. As we've heard, the FDA now um has laid off 20% of its workforce. Dr. calcium.
▶ 2:16:05Is it accurate to say that bioimilar manufacturers need a stable marketplace and regulatory environment in order to confidently make long-term investments? Biosimilar manufacturers need a uh an effective a um a well resourced um an expert uh and an independent uh regulatory environment as well as a stable environment in order to uh in order to to get their in order to to make uh investments in their
▶ 2:16:35uh in their products and to bring those products to patients. And how might the erosion of institutional knowledge at the Food and Drug Administration impact the approval process for future bioimilars? Well, I think it's going to in fundamentally make that process um slower because there are fewer people there to be able to um support the work of the reviewers that are needed.
▶ 2:16:56Um and it's going to make it more complicated because uh if there if there are not uh sufficient people there and with sufficient expertise to develop the guidances and have you know drug companies do have have many meetings with the FDA along the way of the development. This is not just a a one-time event where where a drug company meets the FDA.
▶ 2:17:16And if those if people aren't available and don't have the expertise to bring to those meetings and to give guidance to companies as they're developing their products, um that will make it much uh that will make there will be a lot more um ambivalence around companies investing in in developing those products. Thank you.
▶ 2:17:36So over 15 years ago, congressional Democrats fundamentally reshaped the US health care system for the better with the passage of the patient protection and affordable care act. The ACA not only expanded health coverage to millions of Americans, but it also established a regulatory framework for the FDA to review and approve bioimilars. So again, Dr.
▶ 2:17:59Kelsey, can you explain how the proposed cuts to Medicaid and changes to the ACA marketplace might impact the biosimilars market? Well, I think that fundamentally we are going to see an enormous number of people uh stopped stop having insurance either through Medicaid or through the support that they need to buy insurance on the um on the ACA exchanges and as a result more and more people will not have insurance and they will not be able to afford the biosimilars that they need.
▶ 2:18:29We've been talking all day about how cheaper how much cheaper biosimilars are than biologic drugs. But you have to remember the cost of biologic drugs is 10 thousands tens of thousands of dollars a year. So even if a biosimilar is 40% cheaper, it's still tens of thousands of dollars a year. People still need insurance, fundamental good insurance in order to pay for the drugs that they need in in our current market. And if we take that away from them, they are just not going to be able to take their medications and they are going to have bad outcomes from it. Thank you. I know my time has expired.
▶ 2:18:59We have to protect Medicaid and the tax credit so that we make the Affordable Care Act uh continue to make it affordable for the people in Nevada and all across this country. I yield back. Thank you, Mr. Byer. You're recognized. Mr. Chairman, thank you very much. And ranking member Dog also. Thank you. And thank you very much for hanging in there. Um I particularly want to thank you for coming to talk to us about biosimilars.
▶ 2:19:24Um I just look at how much longer we are living, how much healthier we're living, the whole idea of of better living through chemistry and biology. Um but also know this just listening to the last couple of hours, how what a complex task it is and how concerned I am, I think all of us are that the Trump Musk administration is actively attacking virtually every part of that complex that makes it happen. The cuts at HHS have just been unbelievable.
▶ 2:19:54Last week, researchers HHS were standing outside the building, coming to work, swiping their badges to find out whether they were fired or not because they missed the 5:00 a.m. email that told them they were fired. When you fire 10,000 HHS employees, this is obviously a huge attack on the research to find the new cures. And then when even when they are developed, you get all kinds of new roadblocks from this administration. Approximately 3,500 employees were fired from the FDA last week.
▶ 2:20:22and many of them were lifelong experts who work with innovators to get the new treatments and the new cures to market and many requiring uniquely tailored pathways. They've also terminated hundreds, possibly thousands of grants at the NIH. I've had university president after university president coming in to talk about all the contracts that have been cancelled and what it's meaning to their research. Because of NIH, cancer mortality has fallen 34% over the last 30 years.
▶ 2:20:52HIV infections have fallen by twothirds since the height of the epidemic. And these are the researchers and projects who made the US the envy of health care around the world. I led a letter with many of my colleagues about the communications freeze. Trump um canled NIH advisory council meetings. That's the final step in getting the Alzheimer's disease research center grant approval process. And we know that 50% of Americans that reach 85 are going to have Alzheimer's.
▶ 2:21:22Um, this is incredibly critical important. Alzheimer's could eat up all of our our Medicare budget. Um, but they fired the necessary thing to get that done. They they killed an NIH grant on Corona virus antiviral meds. Um, and it's unheard of to kill funding that was contributing to understanding about the new cures. NIH is the largest single public funer of biomedical and behavioral research in the world.
▶ 2:21:48And all this means is that this incredible research and funding is going to go to Canada, to Germany, to UK, to France. This is the definition of America losing. Dr. Kessleheim, you're a Harvard Medical School professor. Can you possibly explain the thinking behind cancelling all these NIH grants or firing all these people at the FDA or HHS? Absolutely not. Makes no sense at all. Um, sorry. Do you want me to expand on that? It makes absolutely zero sense whatsoever.
▶ 2:22:19This is this is this kind of work is fundamental to the kind of to to the to the scientific enterprise to the cures of tomorrow and to just throw it all out the window with no um with no with with in some cases with no warning.
▶ 2:22:34um and to to treat scientists like this uh who are trying to to um to uncover um uh treatments for diseases that we don't currently have treatments for um to bring more uh therapies to patients that can that can benefit um is cruel and it makes no sense and it is self-destructive for our for a a scientific enterprise that is the envy of the world. Let me go one step further because so much of well not so much but much of what Musk has done has been DEI related.
▶ 2:23:04You know if you know if you're a woman got to go especially if you're a leading military figure if it's dedicated to somebody that's African-American or Hispanic that that research doesn't count. What's your concern about what's going to happen to Precision Medicine? um because we're finding once again that they they um lots of grants that were precision medicine because they had the word black in it or the word woman in it.
▶ 2:23:33And yet we know that there's been an enormous gap in the amount of research done on women as research subjects versus men and certainly on white Americans versus black Americans in terms of the disease research. I mean, you know, disparities exist in care and and disparities exist uh and and we, you know, it is really important that we recognize these disparities in the way that we deliver care to patients um and how patients benefit from from the drugs that are that are approved.
▶ 2:24:01Um and it is important that we try to work to make sure that everybody has access to um to the care that they need. And by uh you know, ignoring it doesn't make it go away. Um and I I think so I think that that it is uh it is ultimately um problematic to everyone if we don't pay attention to the realities that exist.
▶ 2:24:22And for things like for things like personalized uh you know personalized medicine um you know that kind of work is not nec if it's if it's even down to the individual personalized which is where some of the vanguards of science are going these days.
▶ 2:24:36that kind of work is is fundamentally uh supported by public funding uh until it is uh it is determined that it is scalable at a larger scale and at that point um large companies may be interested in getting involved in it and and without that kind of fundamental work that's get that's going on in our public institutions we are not going to get the treatments that that that the those individuals need. Thank you very much Mr. Chairman. I yield back. Yeah. I would like to thank our witnesses for appearing before us today.
▶ 2:25:05Please be advised that members have two weeks to submit written questions to be answered later in writing. Those questions and your answers will be made a part of the formal hearing record. And with that, the subcommittee stands adjourned.