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Sen. Grassley to Change Chairmanships, Focus on Health Care

January 2, 2019

Pending confirmation by the 116th Congress, Sen. Charles Grassley (R-IA) says he will fill the seat of retiring Senate Finance Committee Chairman Orrin Hatch (R-UT) and address health care affordability and high drug prices in his new role.

Grassley’s chairmanship of the Senate Judiciary Committee, which he was appointed to lead in 2015, is set to expire at the end of the current session.

Grassley called for “improving the affordability, quality, and accessibility of health care, including in rural America,” in a press statement announcing his intentions.

Third-Party Problem

The prevalence of third-party payment models—instead of models that encourage direct payment by patients—is pushing prices up in all areas of health care and is what lawmakers must address to slow cost increases, says Wayne Winegarden, a senior fellow at the Pacific Research Institute.

“Drug costs are often the most visible part [of health care costs], so consumers feel it more, but the lack of affordability is a problem that plagues the entire system, and those costs are rising,” Winegarden said. “There are all sorts of things we don’t know the cost of because we don’t see them. Even if you squeeze pharmaceutical prices, you’re not going to solve the problem people really care about, which is rising health care costs and declining health care quality. We don’t have proper competition and patients in charge of their own health care.”

Identifying the Real Concerns

Grassley knows the primary issue for most consumers is out-of-pocket drug costs, says Peter Pitts, president and cofounder of the Center for Medicine in the Public Interest.

“Sen. Grassley is a thoughtful guy, and I think he understands that the issue isn’t the price of drugs from a listprice perspective; the issue is the outof-pocket cost of drugs for patients,” Pitts said. “Drug access is an ecosystem which involves insurance companies [and] pharmacies. At the end of the day, the most important thing is lowering the price of drugs when [patients] go to pick them up at the pharmacy.

“I think there’s been increased attention to that,” Pitts said. “It requires much greater transparency.”

‘Chasing the Wrong Rabbit’

Lawmakers tend to take the wrong approach in attempting to arrest the rise of health care costs, says Winegarden.

“From a policy perspective, there’s two ways to address it,” Winegarden said. “Fundamentally, the problem with [those] trying to address it is they are chasing the wrong rabbit. Drug prices are high, but ... we could address the affordability issue better if we addressed the systemic issues instead of one individual segment targeted toward how the pricing structure works.”

Price transparency is a key consideration, Pitts says.

“Pharmaceutical companies are giving payers 30 to 50 percent discounts, so why are [consumers] paying more money at the pharmacy?” Pitts said. “How could players in the ecosystem make a profit while responsibly affecting the public health?” Optimistic About New Leader Grassley’s reputation makes him a good fit for the job, says Pitts. “Sen. Grassley and the staff are bright people, and he’s not known for grandstanding, so I think he has the opportunity to do it right,” Pitts said.

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Health Care
Author
Ashley Bateman writes from Alexandria, Virginia.
bateman.ae@googlemail.com