Sanford Bishop Asks FTC Chair Andrew Ferguson To Address High Costs Of Prescription Drugs

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During Thursday’s House Appropriations Committee hearing, Rep. Sanford Bishop (D-GA) questioned Federal Trade Commission Chairman Andrew Ferguson about the cost of prescription drugs.

Transcript

00:00The chair now recognizes the gentleman from Georgia, Mr. Bishop, for five

00:04minutes of his questions. Thank you very much, Mr. Chairman. Welcome, Chairman

00:10Ferguson. I've been hearing from my constituents numerous complaints about

00:14the practices of the pharmacy benefit managers, which they say are driving up

00:19the prices of drugs, making it harder for small independent pharmacies to stay

00:24open, particularly in rural areas where pharmacies are fewer and farther between.

00:29Over the past couple of decades, the FTC has allowed vertical integrations within

00:36health care, leaving only a few companies that not only own PBMs, but also own

00:41pharmacies and other health care facilities. These big companies have

00:47become powerful and they often threaten small independence with contract

00:52termination if they don't confirm to reimbursement models and rules. So I'm

00:56very pleased that the FTC has taken action to enforce the law on it and to

01:04address the PBM excesses. Does the FTC, in your judgment, have sufficient resources and

01:12will this budget give you sufficient resources to address what appears to be

01:16a large issue for the affordability of prescription drugs? I agree with you,

01:22especially on the concern about PBMs in rural communities. Just a couple months

01:26ago, I went and visited a decades-old independent pharmacy in rural central

01:31Virginia, very near where I grew up, and sat with the owner for about an hour and

01:36just listened to him explain the situation in which he finds himself. And

01:40independent pharmacies are super important to small towns. If you drive down the

01:44main street of a small town, post office, church, a restaurant or two, and the

01:48pharmacy, and independent pharmacies in particular for rural communities, that's

01:53often the gateway to health care. The pharmacist often participates in an

01:58individual citizen's health care decisions. So protecting independent

02:01pharmacies is critically important. As I discussed earlier, we have the ongoing

02:056B study to which I'm devoting substantial resources as well as law

02:09enforcement. We have the resources to complete the 6B study. We have the

02:13resources to carry on law enforcement. Part of that has to do with shifting

02:16resources away from rulemaking, which I don't think the FTC should generally be

02:20focusing on. But you're also engaged in litigation. And of course, I know you can't

02:23discuss the specifics of the litigation, but are you actively pursuing that

02:28litigation to make sure that... Absolutely, Congressman. Okay. Thank you very much on

02:32that. Let me try to reclaim my time and talk about grocers and our pharmacies.

02:39Under the helm of Chairman Kahn, the FTC filed the first Robinson-Patman Act

02:46enforcement action in decades. And I've heard from independent grocers in my

02:51district that have had a hard time competing in rural environments because

02:56of the spending power of their bigger competition. In far too many cases, grocery

03:01stores have had to close because of a lack of profitability, leaving behind broad

03:06swaths of food deserts in rural America. And 50% of my district is rural. Can you

03:13give me an update on the FTC's enforcement of the Robinson-Patman Act and what

03:17future plans you have for enforcement of this federal law and whether or not within

03:21the sphere of what you're asking for, for resources, you will have those? So we have

03:27two ongoing litigation and I can't obviously discuss the specifics of the

03:31litigation. I've written pretty extensively on the Robinson-Patman Act as a

03:35Minority Commissioner. I think that the decision that the government made in the

03:381970s to quit enforcing it was bad. It is a law. It is a law passed by Congress. The

03:43executive branch's job is to enforce the laws passed by Congress, even if there

03:47isn't full agreement on the policy underlying those laws. I do think, however, it is

03:51very important that when the FTC brings Robinson-Patman enforcement actions, that it

03:57doesn't do it in a way that could elevate the costs that consumers have to pay for

04:01goods, which is a risk when you bring Robinson-Patman enforcement cases. And so

04:05my view is that with the Commission should not bring Robinson-Patman Act cases

04:10unless we know that the beneficiaries of the discrimination have market power that

04:15they can use to hurt consumers. I think that's the time that the Commission should

04:19bring Robinson-Patman Act cases. So because my job is to enforce laws that you,

04:24this body has passed, I am open to bringing Robinson-Patman Act cases. But like I

04:28said in a previous dissent, we have to do it only in circumstances where we are very

04:33confident we will not be raising prices. So you're not confident that that's the

04:36case now? Well, I think it depends on particular markets and particular market

04:41participants. I'm open to bringing these cases, I'm open to using resources, but I'm

04:45not going to bring cases unless I'm very confident that that case will not

04:49increase the prices the consumers have to pay in the marketplace. There are some

04:53independent cases. Yes, we've got two going right now. Okay.

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Transcript

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