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TREATING THE OPIOID EPIDEMIC: 

THE STATE OF COMPETITION IN THE MARKETS 

FOR ADDICTION MEDICATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 22, 2016 

Serial No. 114–97 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

DOUG COLLINS, Georgia 

RON DeSANTIS, Florida 

MIMI WALTERS, California 

KEN BUCK, Colorado 

JOHN RATCLIFFE, Texas 

DAVE TROTT, Michigan 

MIKE BISHOP, Michigan 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SCOTT PETERS, California 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

TOM MARINO, Pennsylvania, Chairman 

BLAKE FARENTHOLD, Texas, Vice-Chairman 

DARRELL E. ISSA, California 

DOUG COLLINS, Georgia 

MIMI WALTERS, California 

JOHN RATCLIFFE, Texas 

DAVE TROTT, Michigan 

MIKE BISHOP, Michigan 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

SUZAN DelBENE, Washington 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SCOTT PETERS, California 

DANIEL FLORES, Chief Counsel 

SLADE BOND, Minority Counsel 
(III) 

C O N T E N T S 

SEPTEMBER 22, 2016 

Page 

OPENING STATEMENTS 

The Honorable Tom Marino, a Representative in Congress from the State 

of Pennsylvania, and Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law .................................................................................. 1 

The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress 

from the State of Georgia, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ................................................. 2 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Ranking Member, Committee on the Judiciary ......... 3 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Committee on the Judiciary ................................. 59 

WITNESSES 

Anne McDonald Pritchett, Ph.D, Vice President, Policy and Research, Pharmaceutical Research and Manufacturers of America (PhRMA) 

Oral Testimony ..................................................................................................... 6 

Prepared Statement ............................................................................................. 9 

David R. Gaugh, R.Ph., Senior Vice President for Science and Regulatory 

Affairs, Generic Pharmaceutical Association 

Oral Testimony ..................................................................................................... 20 

Prepared Statement ............................................................................................. 22 

Mark Merritt, President and Chief Executive Officer, Pharmaceutical Care 

Management Association 

Oral Testimony ..................................................................................................... 31 

Prepared Statement ............................................................................................. 33 

Eric Ketcham, M.D., American College of Emergency Physicians (ACEP), 

Medical Director, Emergency Department and Urgent Care, Co-Medical 

Director, EMS San Juan Regional Medical Center 

Oral Testimony ..................................................................................................... 40 

Prepared Statement ............................................................................................. 42 

Robin Feldman, Esq., Harry and Lillian Hastings Professor of Law, Director 

of the Institute for Innovation Law, UC Hastings College of the Law 

Oral Testimony ..................................................................................................... 55 

Prepared Statement ............................................................................................. 57 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Material submitted by the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Ranking Member, 

Subcommittee on Regulatory Reform, Commercial and Antitrust Law .......... 64 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Questions for the Record from Anne McDonald Pritchett, Ph.D, 

Vice President, Policy and Research, Pharmaceutical Research and Manufacturers of America (PhRMA) ............................................................................ 80 
Page

IV 

Response to Questions for the Record from David R. Gaugh, R.Ph., Senior 

Vice President for Science and Regulatory Affairs, Generic Pharmaceutical 

Association ............................................................................................................ 83 

Response to Questions for the Record from Mark Merritt, President and 

Chief Executive Officer, Pharmaceutical Care Management Association ....... 85 

Response to Questions for the Record from Robin Feldman, Esq., Harry 

and Lillian Hastings Professor of Law, Director of the Institute for Innovation Law, UC Hastings College of the Law ........................................................ 87 

Review—‘‘From morphine clinics to Buprenorphine: regulating opiod agonist 

treatment of addiction in the United States’’ .................................................... 92 

Prepared Statement of Property Casualty Insurers (PCI) Association of America .......................................................................................................................... 101 

OFFICIAL HEARING RECORD 

UNPRINTED MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of Louis J. Milione, Deputy Assistant Administrator, Office of 

Diversion Control, Drug Enforcement Administration. This material is available 

at the Subcommittee and can also be accessed at: 

http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=105353 

Memorandum from Charles O’Keeffe, Professor, School of Medicine, Department of 

Pharmacology and Toxicology, Virginia Commonwealth University. This material 

is available at the Subcommittee and can also be accessed at: 

http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=105353 
(1) 

TREATING THE OPIOID EPIDEMIC: THE 

STATE OF COMPETITION IN THE MARKETS 

FOR ADDICTION MEDICATION 

THURSDAY, SEPTEMBER 22, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 2 p.m., in room 2237, 

Rayburn House Office Building, the Honorable Tom Marino, 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Marino, Goodlatte, Collins, Ratcliffe, 

Bishop, Johnson, Conyers, DelBene, Cicilline, and Peters. 

Staff Present: (Majority) Anthony Grossi, Counsel; Andrea 

Woodard, Clerk: and (Minority) Slade Bond, Minority Counsel. 

Mr. MARINO. The Subcommittee on Regulatory Reform, Commercial and Antitrust Law will come to order. Without objection, the 

Chair is authorized to declare recesses of the Committee at any 

time. And I would like to make clear for our guests that are here, 

votes have been moved up and another series has been put in. 

We have about 2 hours, maybe a little less, before they are going 

to call votes and I have asked my colleagues, and they agree we 

are going to stick to the 5-minute rule on questions. So, when we 

break, it will be the end of the hearing because I do not want to 

keep you people here for an hour and a half to 2 hours. 

We welcome everyone to today’s hearing on ‘‘Treating the Opioid 

Epidemic: The State of Competition in the Markets for Addiction 

Medicine,’’ and I now recognize myself for my opening statement. 

Sadly, the opioid epidemic facing our country is an issue that we 

are all too familiar with. In 2014, drug overdoses overtook car 

crashes as the leading cause of accidental death for the first time 

in history. 

In response to this growing epidemic Congress passed a ‘‘Comprehensive Addiction and Recovery Act of 2016’’ which was signed 

into law on July 22 of this year. This legislation, which included 

several bills that originated in the Judiciary Committee, is an important measure that will help aid State and Federal authorities 

in fighting opioid abuse and addiction. However, one aspect on the 

opioid epidemic that has not received significant attention, is the 

market for the drugs that treat opioid overdoses and addiction. 
2 

Today’s hearing will focus on this issue and explore the state of 

competition in these important markets. There are a number of 

drugs that are used to treat opioid overdoses and addiction, but two 

of these drugs have become prominent and will be the principal 

focus on our hearing. The first is Naloxone and the second is 

Buprenorphine. Did I have that correct, doctors? Fine, because 

from now on it is just going to be BUP. 

Recently, its primary use has been to treat opioid overdoses in 

an emergency setting. The next drug that we will touch a little bit 

on in addition to BUP, as I said earlier, will be Naloxone. Naloxone 

is a drug that’s been around since the 1970s. 

Its effect is swift and dramatic, and it can literally bring an 

overdosed person back to life. BUP has also existed for decades and 

is a drug that is used in the treatment of opioid addiction. BUP 

generally is used as part of an ‘‘opioid substitution treatment plan’’ 

where it replaces a more potent and harmful opioid. The goal of 

this type of treatment is tapering the patient completely off of all 

opioids, including BUP. The period that a patient is prescribed the 

drug can vary greatly, from a little as a few weeks to years. Because BUP is an opioid, it is a regulated and controlled substance 

by the United States Drug Enforcement Agency, otherwise known 

as the DEA. Further owning to its abuse potential, BUP oftentimes 

is combined Naloxone to mitigate the possible misuse of the drugs. 

In recent years, demand for these drugs has increased sharply. 

As a result, there have been reports that they have become hard 

to obtain, and in some instances prices for these drugs have risen 

during this period of increased demand. At the same time, innovative new applications of long developed drugs present first responders and family members with the ability to address overdose and 

addiction. As a strong support of the free markets, I believe that 

the best remedy to address scarcity and high prices is increased 

competition. 

And so, today we will explore the complex factors that influence 

competition in the market for addiction medicine. Specifically, we 

will hear details about whether prices are in fact increasing for 

these drugs, the level of competition that exists in these markets, 

how Federal regulation influences competition, whether the antitrust laws are equipped to address any anticompetitive conduct, 

and whether the Antitrust Enforcement Agencies are appropriately 

policing unlawful behavior in these markets. We have an excellent 

panel of witnesses that will provide invaluable insight to these important issues, and I look forward to hearing their testimony. 

The Chair now recognizes the Ranking Member of the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, 

Mr. Johnson of Georgia, for his opening statement. 

Mr. JOHNSON. Thank you, Mr. Chairman. Today’s hearing is an 

important and welcome opportunity to discuss drug price competition in the market for treating opioid addiction. Opioid addiction is 

a devastating public health emergency in many of our communities. Strongly linked to the prescription of opioid pain killers, the 

Center for Disease Control reports that opioids contributed to the 

deaths of 28,647 Americans in 2014. While there are many factors 

that have contributed to this crisis concerns have been raised that 

common treatments for opioid addiction have become more costly. 
3 

In November 2014, the New York Times reported that 

Naloxone—— 

Mr. MARINO. There are several ways to say that, believe me. I 

checked it on the Internet there are multiple ways to say it. 

Mr. JOHNSON. Naloxone, okay. It has been reported that this 

drug, a common treatment for opioid addiction and overdoses, had 

experienced severe price spikes. Alarmingly in my home State of 

Georgia police departments report that the price of drug kits containing Naloxone have increased from $22 to $40. I am concerned 

that in addition to costing States millions of dollars, these spikes 

have decreased access and undermined the ability of law enforcement agencies and local health responders to combat exploding 

opioid crisis. 

Unfortunately, for many, these concerns extend to the markets 

for other lifesaving treatments as well. For example, I am personally concerned about the high cost of the new treatment for Hepatitis C, a virus that affects more than 4 million Americans and 

which costs nearly $75,000. 

While this form of treatment is a significant advancement, particularly for patients with a form of the disease that is difficult to 

treat, there is little doubt that Americans should not have to 

choose between liver disease and extreme financial hardship when 

making healthcare choices. As millions of American struggle in the 

fight against this silent epidemic, treatments must be accessible 

and affordable. 

According to a study by Dr. Aaron Kesselheim and others recently published in the Journal of American Medical Association, 

one of the driving forces in high drug prices is protection from competition through market exclusivity. Our patent system is designed 

to promote innovation by conferring a limited monopoly on inventions that are novel, useful, and non-obvious. It is critical that our 

polices continue to place a high value on innovation. As the Department of Health and Human Services found in 2012, leading research indicates that the economics literature generally indicates 

that innovation in medical products has produced tremendous benefits for U.S. consumers lead longer and healthier lives. 

But it is equally important that patent extension applications are 

carefully scrutinized to ensure competition in drug markets 

through generic drug availability. As Dr. Kesselheim’s study noted, 

there is little evidence that pro-competitive policies will hamper innovation. In fact, they may even drive new therapies to market. I 

look forward to today’s hearing. We have a truly excellent panel of 

witnesses and I yield back the balance of my time. 

Mr. MARINO. Thank you. The Chair now recognizes the Ranking 

Member of the full Judiciary Committee, Mr. Conyers of Michigan, 

for his opening statement. 

Mr. CONYERS. Thank you, Mr. Chairman. Welcome to our distinguished panel, particularly Professor Feldman of the Hastings College of Law. Sudden and sharp increases in the cost of lifesaving 

prescription medications have caused much public outcry. Most recently regarding substantial spike in the price of EpiPen which is 

used to treat life threatening allergic reactions. 

Although today’s hearing focuses on competition in the markets 

for a particular set of lifesaving drugs, namely those that treat 
4 

opioid addiction, I hope that there are some broader lessons that 

we can draw from our discussion today. 

To that end, I would like our witnesses to address, if they can, 

the following issues. The witnesses should discuss the real life consequences of the opioid addiction epidemic and the impact of rising 

prices for medications that treat opioid addiction. According to the 

Centers for Disease Control and Prevention, there are more than 

28,000 deaths in 2014 resulting from opioid overdoses. In fact, 6 

out of 10 drug overdose deaths that year resulted from opioid 

overdoses. 

Medications like Naloxone revive an opioid overdose victim in the 

critical moments after he or she stops breathing as the result of an 

overdose. Yet, the price of this drug, in both its generic and branded forms, has skyrocketed in recent years. According to public 

health and police officials, prices for the drug have increased by 50 

percent or more according to some reports. 

As a result, the ability of emergency responders and individuals 

to purchase this critical lifesaving medication is being jeopardized. 

Other generic and branded medicines that are designed to gradually ween addicts from their opioid use have also seen similar price 

increases. As the statistics demonstrate, addressing the consequences of these price increases is no mere academic matter. It 

is beyond the dispute that such price increases have had a devastating impact on patients, their families, insures, first responders, and healthcare providers. 

In addition, I would like the witnesses to consider the current 

law whether the current law strikes a proper balance between incentivizing investment in new pharmaceutical products and ensuring vigorous competition. 

Under both our patent and regulatory systems manufactures of 

brand name drugs are entitled to temporary exclusivity periods for 

their products, during which other firms are prevented from offering competing products. These exclusivity periods are designed to 

provide an economic incentive for manufacturers to invest in developing new products. But the result is that prices for brand name 

drugs remain high. After the exclusivity periods end, competition 

in the form of the introduction of generic versions of the brand 

name drug is supposed to lead to decreases in drug prices. 

Indeed, the availability of generics is the primary means of insuring competition in low prices in pharmaceutical markets. Nevertheless, there is a concern that some brand name manufacturers 

have manipulated the current patent and regulatory regimes to extend what our supposed to be their time-limited monopolies. We 

ought to explore whether there should be a better balance. 

And finally, the witnesses should, if they can, address the factors 

responsible for the skyrocketing cost of generic opioid addiction 

drugs and the actions that Congress should take in response. 

Prices for almost all opioid addiction medicines have risen, not just 

for those for brand name products. This situation undermines the 

competition based rational for encouraging generics to enter the 

market in the first place. We and Congress need to focus on constructive ways to respond to this problem. 
5 

And so accordingly I look forward to hearing the thoughtful suggestions that I know will come from our witnesses today. Thank 

them for their participation and thank the Chairman. 

Mr. MARINO. Thank you. The Chairman of the full Committee, 

Mr. Goodlatte, will be here shortly so we will reserve time for his 

opening statement. But without objection, other Members’ opening 

statements will be made part of the record. 

I will begin by swearing in our witnesses before introducing 

them. Would you please stand and raise your right hand? 

Do you swear that the testimony that you are about to give before this Committee is the truth, the whole truth, and nothing but 

the truth, so help you God? Let the record reflect that the witnesses have responded in the affirmative. Please be seated. 

Dr. Anne McDonald Pritchett is the vice president of Policy and 

Research at the Pharmaceutical Research Manufacturers of America. Prior to joining PhRMA, she worked in the Office of National 

Drug Control Policy for almost 8 years. 

Dr. Pritchett earned her bachelor’s degree in English and Graphic Design from Virginia Tech, her master’s in Public Policy from 

George Mason University, and her doctorate in Public Policy and 

Public Affairs from Virginia Tech. Welcome, doctor. 

Mr. David Gaugh is the senior vice president of Science and Regulatory Affairs for the Generic Pharmaceutical Association. Prior to 

joining GPhA, Mr. Gaugh was the vice president and general manager of Bedford Laboratories and has otherwise been engaged in 

the pharmaceutical industry for years. Mr. Gaugh is a registered 

pharmacist and a graduate of the University of Wyoming School of 

Pharmacy. Welcome. 

Mr. Mark Merritt has served as the president and CEO of the 

Pharmaceutical Care Management Association, PCMA, since 2003, 

which is the National Association representing America’s Pharmacy Benefit Managers, or known as PBMs, that collective administrative prescription drug plan for more than 266 million Americans. 

Prior to joining PCMA Mr. Merritt served as a senior strategist 

with America’s Health Insurance Plan and PhRMA. Mr. Merritt received both his bachelor’s degree and his master’s degree from 

Georgetown University. Welcome, sir. 

Dr. Eric Ketcham, M.D., is the current president of the New 

Mexico Chapter of the American College of Emergency Physicians. 

Dr. Ketcham is also the medical director of the Emergency Department and Urgent Care and the Co-Medical Director of the EMS at 

the San Juan Regional Medical Center in New Mexico. 

Dr. Ketcham also served our country in the U.S. Navy as a second-class petty officer, aviation ordnanceman in the Strike Fighter 

Squadron 11 and later in the Naval Reserve as a first-class petty 

officer. 

Dr. Ketcham earned his bachelor’s degree in economics and Russian studies from the University of Colorado; his MBA from the 

University of Texas at Dallas; and his medical degree from the 

University of Colorado School of Medicine. He completed his residency at the University of Michigan Hospital and Saint Joseph’s 

Mercy Hospital. Welcome, sir. 
6 

Professor Robin Feldman holds the Harry and Lillian Hastings 

chair and is also the director of the UC Hastings Institute for Innovation Law. Professor Feldman is a prolific author on among other 

things, intellectual property, antitrust and pharmaceutical issues. 

She has provided testimony and commentary for other congressional Committees, the Federal Trade Commission, the Department 

of Justice, the Patent and Trademark Office, and the National 

Academy of Sciences. 

Professor Feldman earned her bachelor’s degree from Stanford 

University and her J.D. from Stanford Law School where she graduated Order of the Coif. Welcome. 

Each of the witnesses’ statements will be entered into the record 

in its entirety. I ask that each witness summarize his or her testimony in the 5 minutes or less. And to help you stay within that 

time, there is a timing light in front of you. The light will switch 

from green to yellow indicating that you have 1 minute to conclude 

your testimony. When the light turns red, it indicates that the witness’ 5 minutes have expired. 

Again, I want to thank you for being here and I diplomatically 

will pick up the gavel here if you are running over your 5 minutes. 

I will not hit anything; it is just a little polite indication to you, 

would you please wrap up because I do not look at the lights when 

I know I have 5 minutes. I am thinking about what I am asking 

or saying, and I know you may do the same thing. So there will 

just be a polite little gesture. I have not thrown this yet. Dr. 

Pritchett, will you please make your opening statement? 

TESTIMONY OF ANNE McDONALD PRITCHETT, Ph.D, VICE 

PRESIDENT, POLICY AND RESEARCH, PHARMACEUTICAL 

RESEARCH AND MANUFACTURERS OF AMERICA (PhRMA) 

Ms. PRITCHETT. Good afternoon Chairman Marino, Ranking 

Member Johnson, and Members of the Subcommittee. As mentioned, my name is Anne Pritchett. I am the vice president of Policy and Research at the Pharmaceutical Research and Manufacturers of America, also known as PhRMA. We represent the Nation’s 

leading biopharmaceutical research companies which are dedicated 

to making new treatment and cures for some of the most of our 

most challenging diseases. Our members have invested half a trillion dollars in R&D since 2000 alone, and about $58.8 billion in the 

last year alone. 

PhRMA is committed to supporting the appropriate use of prescription medicines and to making the R&D investments needed to 

develop new therapies including new medications to treat addiction 

and overdose reversal agents. Before speaking specifically to addiction treatments, I wanted to give a sense of what we see as the key 

policies necessary to address this overall epidemic. 

First, we feel that prescribers immediately undergo ongoing education and training on the appropriate prescribing of controlled 

substances and effective pain management. They need training on 

how to identify those at risk for prescription drug abuse, for overdose, and those in need of treatment. We need more prescribers to 

be using evidence based clinical guidelines to inform opioid selection dosage and duration of treatment. Second, we feel that State 

prescription drug monitoring programs have been demonstrated 
7 

through peer review research to be one of the most effective tools 

in detecting potential doctor shoppers. 

But, they are only useful if their being used. We need to mandate 

training in the use of PDMPs and we need to adjust those barriers 

to their use. Third, we need to encourage the development of abuse 

to current formulations not opioid pain medications and medications to treat addictions and prevent overdose. 

Given more than 90 percent of the most abused medicines are generic opioids; we think it is critically important that the FDA finalize its guidance to assist generic manufactures in the development 

of abuse deterrent formulations products as well. And we need coverage and access polices that reflect the public health benefits of 

these products. 

And finally, we need to expand access to the full range of treatment and recovery services needed to break the cycle of addiction. 

A couple of key points. Despite the fact that a large body of research is documented the cost effectiveness of medication assisted 

treatments for addictions, and despite the fact that opioid abuse is 

widely recognized as a chronic disease, prescription drug benefit 

designs often include prior off step therapy, or as I call it, fail first. 

The consequences of which in this case can be deadly and a number of State Medicaid programs impose lifetime limits on the use 

of addiction treatments. These polices are in direct conflict with the 

public health goal of expanding access and breaking the cycle of addiction. 

Now, I wanted to take just a moment to talk about the nature 

of competition in the biopharmaceutical market, overall. I would 

say in contrast to Mr. Kesselheim, respectfully, the competitive 

market is structured to take maximum advantage of savings from 

brand competition. 

We have brand medicines facing competition before they come to 

market. About 88 percent of medicines that are deemed first in 

class had competitors in development at the time of launch. In 

Hepatitis C, we saw multiple competitors within less than a year 

with payers negotiating discounts between 40 and 65 percent. We 

do to continue, though, to have challenges related to coverage and 

access to these critical medicines. 

In following generic entry, payers quickly shift utilization to 

generics. The reality is, more than 90 percent of all medicines prescribed in the U.S. are generics, and once a drug loses its exclusivity, within less than a year 93 percent of market share is generic 

based. But, we have a drug cycle that balances the need for incentives innovation with a desire for increased competition. 

I would note that with the coming loss of IP protection between 

now and 2020, were going to have about 93 billion U.S. brand sales 

that will be facing generic competition. In the case of addiction 

treatments, we have a substantial number of generic medicines 

available in these well-established classes. But we have also seen 

a number of new drug applications that are providing significant 

medical advances for addressing opioid abuse and addiction in 

terms of more convenient delivery systems. 

In recent years, the market has signaled a need for new treatment options in this space that can improve patient adherence and 

quality of life by providing more convenient dosing and delivery 
8 

methods. And companies are beginning to respond as we have seen 

from the recent approvals, and from what we have seen in the 

pipeline. 

When you look at the pipeline we have 31 abuse deterrent determinations in development of pain so that we avoid ever getting to 

this point. There are 35 addiction medicines in development and 49 

opioid pain medications in development potentially providing important treatment alternatives to what is currently on the market. 

But the demand for treatment in the addiction spaces has dramatically increased. It has increased unfortunately because opioid overdose rates have increased the growing burden on communities and 

families around the country. 

On the positive, we have seen increased awareness in education 

removing some of the stigma related to addiction. In addition, we 

have seen State and Federal policy changes, the Care Act was mentioned as critical to expanding access. I would say that we think 

there is robust competition in this space one of the key barriers we 

have seen when we look at products in this space is the challenges 

related to ensuring coverage and access to these. When we have 

lifetime limits and we have Fail First, that creates tremendous 

challenges and one of our concerns is how the dynamics of coverage 

and access policies impact incentives to enter the market. Thank 

you. 

[The prepared statement of Ms. Pritchett follows:] 
9 
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14 
15 
16 
17 
18 
19 
20 

Mr. MARINO. Thank you. Mr. Gaugh. 

TESTIMONY OF DAVID R. GAUGH, R.Ph., SENIOR VICE PRESIDENT FOR SCIENCE AND REGULATORY AFFAIRS, GENERIC 

PHARMACEUTICAL ASSOCIATION 

Mr. GAUGH. Thank you. Good morning, Chairman Marino—afternoon excuse me—Ranking Member Johnson, and Members of the 

Subcommittee. I would like to first begin by commending the Committee for your continued focus on these important issues that we 

are going to discuss today. The Generic Pharmaceutical Association 

is the Nation’s leading trade association for manufactures and distributors of generic medicines. 

GPhA’s mission is to improve the lives of patients in the U.S. 

healthcare system through access to affordable generic medicines. 

Eighty-eight percent of all prescriptions dispensed in the United 

States are generic; however, generics account for only 28 percent 

of the totals of drugs span. GPhA is strongly committed to addressing the improving treatment options for patients suffering from addiction. This includes combating drug abuse by supporting community anti-drug coalitions, encouraging safe disposal of unused 

drugs, and through the development of abuse deterrent drug formulations. 

As part of this response, including ensuring the availability of 

high quality low cost generics. I am here to discuss the GPhA conviction that the best way to achieve the goals of patient access to 

use lifesaving treatments is through the development of policies to 

promote robust competitive markets. As GPhA represents multiple 

competing generic manufactures, we are not privileged to member 

company information about individual products or any pricing decisions around those projects. 

We can; however, provide some insight to what we believe is a 

proven solution to rapidly inflating drug prices. Competition. Competition from generic drugs savings is access and not cost. In fact, 

a variety of healthcare stakeholders have found a trend of overall 

price decreases for generics. Last week, the government accountability office publishes a report examining drugs in Medicare, part 

D. That report echoes the findings of multiple previous independent reports. That generic drug prices continue to decrease. 

Specifically, the GAO report that between 2010 and 2015, drug 

prices for Medicare part D declined by 59 percent. In January 

2016, the Department of Health and Human Services released a 

comprehensive study which concluded, and I quote, ‘‘Our view of 

evidence strongly supports the conclusion that generic drug prices 

are not an important part of the drug cost problem facing the Nation.’’ Taken with other important studies, these data show the 

competition in pharmaceutical markets is effective. The Drug Price 

Competition and Patent Term Restoration Act, commonly known as 

the Hatch-Waxman Act, created the abbreviated regulatory approval pathway for generics, while simultaneously providing lucrative incentives for brand manufactures to continue to bring new 

treatments to the market. 

The overwhelming success of Hatch-Waxman led to the approval 

of over 14,000 generic applications. But, that incredible volume 

brought complications in the FDA’s ability to effectively and effi-
21 

ciently review them. By 2011, there where over 2.700 generic applications pending at the FDA and the average approval time for 

these products or these applications exceeded 30 months. To alleviate the burden on FDA and expedite generic approvals, the Generic 

Drug User Fee Program, or GDUFA, was improved and implemented in 2012. 

Unfortunately, 4 years later the number of pending generic applications has ballooned to over 4,000 while the median approval time 

now exceeds over 45 months. Nonetheless, FDA has, under 

GDUFA, hired and trained over a 1,000 new employees and increased its efficiency in reviewing applications. As these are important steps forward, we will continue to work with the FDA to ensure it meets its GDUFA goals. 

Generic manufacturers make complex and highly confidential 

analysis when selecting which products to pursue. This analysis 

can include assessing the complexity of reverse engineering, the 

state of the intellectual property, the size of the market, the likely 

number of competitors, the product development and manufacturing capabilities and costs. 

Once the generic manufacturers make the decision to develop a 

product, they often face significant delay tactics from brand manufacturers, including the Risk Evaluation Mitigation Strategies or 

REMS program. And exempting themselves from scrutiny or their 

intellectual property covered by the U.S. Patent and Trade Office. 

While current law forbids brand companies from using REMS to 

delay competition, they are nonetheless denying generic manufacturers access to samples of their products. These samples are required to conduct the bioequivalent studies necessary for FDA approval of the generic application. They have even begun applying 

restricted access programs to drugs for which FDA has not required a REMS program in order to delay generic entry. 

Presently, two pieces of legislation are pending before Congress 

that would address this situation. The Fast Generic Act and the 

CREATES Act. The GPhA has encouraged that each of these addresses the barriers to success. 

This Committee has also played a key role in recognizing The Interim Parties Review, the IPR, as a critical consumer protection 

against abusive patens. The IPR holds great promise in reducing 

anti-competitive evergreening practices that drive-up healthcare 

costs. 

In conclusion, Mr. Chairman, GPhA believes that the best way 

to control drug costs, generally, whether in the drug addiction 

treatment market or otherwise is through policies that incentivize 

competition. Thank you very much. 

[The prepared statement of Mr. Gaugh follows:] 
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Mr. MARINO. Thank you. Mr. Merritt. 

TESTIMONY OF MARK MERRITT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, PHARMACEUTICAL CARE MANAGEMENT 

ASSOCIATION 

Mr. MERRITT. Good afternoon Chairman Marino, Ranking Member Johnson, other Members of the Subcommittee. My name is 

Mark Merritt, president and CEO of the Pharmaceutical Care 

Management Association. I appreciate this opportunity to appear 

before the Committee examining sudden price spikes in opioid antagonists. 

PCMA is a national trade association representing America’s 

Pharmacy benefits managers which administer prescription drug 

plans for more than 266 million Americans with health care provided by Fortune 500 companies, health insurers, labor unions, 

Medicare part D, Medicaid, FEHPB, ACA, and other arenas. PBM’s 

offer a wide variety of services aimed at making prescription drug 

benefit programs offered safely, efficiently, and affordably for their 

clients. PBM’s are projected to save $654 billion on drug benefit 

costs over the next decade alone. 

For today’s discussion, we have seen far too many heartbreaking 

stories come out of nearly every corner of America about the destruction of lives due to opioid addiction. According to the Centers 

for Disease Control and Prevention overdose deaths involving prescription opioids have quadrupled since 1999. Over the last 15 

years, more than a 165,000 people have died in the U.S. from 

overdoses related to opioids. The same period has seen a quadrupling of deaths due to overdoses specifically of illicit heroin including over 10,500 deaths in 2014 alone. 

Addiction treatments and recovery medications are critical, but 

an important first step is overall prevention. That is why we commend Congress for passing the Comprehensive Addiction and Recovery Act, CARA. PCMA and its member company supported this 

legislation which among other provisions created a Medicare part 

D Lock in Program to curb substance abuse at the pharmacy 

counter. 

The legislation will help stop drugstore shopping by allowing 

Medicare part D Plans to restrict known abusers to select pharmacies for certain medications, such as opioids. The law also expands the availability of Naloxone to law enforcement agencies and 

other first responders to reverse overdoses and save lives. 

Unfortunately, as opioid antagonists have gotten more widely 

available, there have also been unprecedented price spikes. We encourage policy makers to consider the following recommendations 

to stem the rising tide of abuse and reduce cost. 

First, we think it should be mandatory that prescribers use Eprescribing for controlled substances. Second, State governments 

should make their prescription drug management program databases more easily accessible, more user friendly, and better integrated across the country to make that data accurate and in real 

time. Medicare part D Plans should be allowed to suspend payments of suspicious claims just as is allowed throughout the rest 

of Medicare. This would effectively eliminate pay and chase activities which increase cost and make fraud detection more difficult. 
32 

We also recommend the following policy changes to enhance competition and reduce drug costs. First, address the generic drug 

backlog at FDA. As has been mentioned before me, improvements 

have been made but much more needs to be done. 

Second, accelerate FDA approval of drugs with little or no competition. Third, limit delaying tactics and patent abuses that prevent competitors from coming to market. Fourth, unlock more innovative value based pricing arrangements by removing the existing 

barriers such as the Medicaid best price requirement. While this is 

certainly well intended, it acts as an artificial price war that discourages drug companies from steeper discounts in a commercial 

market. And finally, eliminate any or all Medicare part D protective classes which significantly weakens the power of PBM’s to negotiate rebates and lower prices. Again, I appreciate this opportunity to be here today and look forward to answering any questions you might have. 

[The prepared statement of Mr. Merritt follows:] 
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Mr. MARINO. Thank you. Dr. Ketcham. 

TESTIMONY OF ERIC KETCHAM, M.D., AMERICAN COLLEGE OF 

EMERGENCY PHYSICIANS (ACEP), MEDICAL DIRECTOR, 

EMERGENCY DEPARTMENT AND URGENT CARE, CO-MEDICAL DIRECTOR, EMS SAN JUAN REGIONAL MEDICAL CENTER 

Dr. KETCHAM. Thank you, Mr. Chairman. My name is Dr. Eric 

Ketcham. I am an emergency department medical director and 

EMS Medical Director and a medical director for an Opioid Addiction Treatment Clinic. On behalf of the 37,000 members of the 

American College of Emergency Physicians, I would like to thank 

you for this opportunity to testify today about this important issue. 

The unnecessarily high price of these medications obstructs access to treatment for opioid addiction and overdose in America. And 

thus prolongs the scourge of heroin prescription opioid addiction 

and puts American lives at risk. Access to Buprenorphine, which 

should be a low cost medication, must be expanded so that more 

Americans can be successfully treated for the affliction of opioid dependence. 

Secondly, access to Naloxone which also should be a low cost 

medication, must be increased. This is truly a lifesaving drug that 

when used properly can reverse opioid overdoses and save lives. In 

its current, most commonly used form, Buprenorphine has been 

FDA approved for 30 years. Because of its unique properties it produces much less euphoria and respiratory depression than traditional opioids, such as oxycodone, heroin, and methadone. 

When properly prescribed, this medication is a very safe alternative to Methadone and thus can be effectively utilized to treat 

opioid abuse and addiction by a variety of physicians in a variety 

of settings, as opposed to Methadone which must be administered 

in a licensed opioid addiction treatment clinic, such as one that I 

run. 

One would think that a lifesaving and life transforming medication such as Buprenorphine, which has a well-established safety 

profile, would be accessible to hundreds of thousands more opioid 

dependent patients. Unfortunately, that is not the case. In my written testimony, I provide specific examples of the rising prices associated with Buprenorphine and the related Buprenorphine 

Naloxone combination medications, including their generic counterparts. 

For example, based on surveys I have conducted of local pharmacies affiliated with national chains in my region, the cost for a 

30-day supply of Buprenorphine—that is two 8 mg tablets per day, 

the usual dose, is now $334 compared to a $142 just 6 months ago. 

And a month of the Suboxone brand name Buprenorphine 

Naloxone combination filmstrips, is $532. Shockingly, the generic 

version of the combination tablets is even more than the brand 

name prescription film strips this week and cost $625 for a 30-day 

supply. 

The critical medication we use to treat acute opioid overdose is 

Naloxone. It has been utilized in hospitals and by fire EMS personal for decades. More recently, there has been an organized effort 

expand direct access to Naloxone and in some regions it can al-
41 

ready be purchased from a pharmacy even without a prescription. 

However, these efforts to expand availability of Naloxone have surprisingly not caused the price of this medication to decrease. In 

fact, the price of Naloxone in nearly all forms of packaging has 

been steadily climbing. 

In my community, the cost of a one-millimeter syringe of 0.4 milligrams of Naloxone went from about $12 in 2012 to $30 in 2016. 

Without a hospital or municipal volume discount for fire or EMS 

service, the preloaded two milligram syringe used by many first responders is now priced at approximately $49 a dose. That same 

dose was $17 in 2014 and reportedly as low as a $1 in 2001. 

The consequence of these rising prices may force Naloxone out of 

the budget for the rural fire or EMS service that does not have the 

buying power of a hospital or a larger municipal agency. Furthermore, in my region, Naloxone products designed for the layperson 

are the most expensive of all. 

For example, the cash price for the four-milligram nasal spray 

has increased to a $150 for the package of two doses. This simple 

device does not present a form of revolutionary technology, and it 

includes a generic, and until recently, very inexpensive medication. 

What is truly astounding is the price for the single dose Naloxone 

autoinjector, which can be more than $2,200 and is often not a sufficient rescue dose. 

Another topic not yet addressed on this greater topic is the expanding Good Samaritan Laws are an important aspect of increasing Naloxone availability. These efforts must be paired with legislation that would make healthcare providers and lay users immune 

from liability for failure or misuse of the product by bystanders. 

Moreover, administration of Naloxone is often not as simple as 

providing a single dose for various reasons. That is why ASEP 

strongly recommends that whenever Naloxone is administered by 

a bystander, to treat an opioid overdose, EMS must be called, and 

ideally, that patient would then be transported to the nearest 

emergency department for evaluation. 

In conclusion, we urge Congress to help make Buprenorphine 

and Naloxone more readily available to those suffering from opioid 

addiction. These critical drugs cannot only save countless lives, but 

help alleviate a great burden on society by reducing crime, incarceration, and healthcare expenses including complications from intravenous drug use such as spreading HIV and Hepatitis C. Most 

important, access to Buprenorphine and Naloxone means potentially deadly overdose deaths could be avoided. 

If Congress wants to help increase access to these drugs, then 

something must be done to curtail the cost of these lifesaving medications. Thank you, and I look forward to answering any questions 

you may have. 

[The prepared statement of Dr. Ketcham follows:] 
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Mr. MARINO. Thank you. Professor Feldman. 

TESTIMONY OF ROBIN FELDMAN, ESQ., HARRY AND LILLIAN 

HASTINGS PROFESSOR OF LAW, DIRECTOR OF THE INSTITUTE FOR INNOVATION LAW, UC HASTINGS COLLEGE OF 

THE LAW 

Ms. FELDMAN. Mr. Chairman and esteemed Subcommittee members, I am honored to address competition issues in the market for 

addiction medicine. Open and vigorous competition is the backbone 

of U.S. markets, but we are not seeing that in the market for addiction medicine. Rather, drug companies are engaging in regulatory games, stringing these out one after another while competition languishes on the sidelines. 

These games come in two baskets. One set involves manipulating 

Hatch-Waxman, which is the system for quick approval of generic 

drugs when the patents on the main drug expires. The other basket 

of games relates to the system for non-patent exclusivities known 

as regulatory exclusivities. 

Some of these games just blatantly delay entry of competition. 

With addiction medicine, for example, we have seen petitions asking the FDA to deny approval of any generic versions. Among many 

of the demands, one addiction medicine company asked the FDA to 

require things for generic Suboxone that the FDA did not have the 

authority to do and that we would not want them to do in the first 

place. Now, the agency denies 80 percent of these petitions, as it 

denied this one, but the process takes time, even for silly petitions. 

In the case of the Suboxone petition, the FDA was so disturbed by 

the petitioning behavior that it referred the company’s behavior to 

the Federal Trade Commission. 

In other games, companies block competitors from getting access 

to the samples they need to get approval. Generics have to show 

that their drug is the same as the branded, and some brand companies just flatly refuse to sell samples to generic companies or to cooperate with generic companies to write safety plans. With addiction medicine, the FDA so despaired of getting one brand name 

company to cooperate that it took the unprecedented step of granting a waiver so that the generic company could just go forward on 

its own. Again, competition languished for another stretch in the 

addiction medicine market. 

In other games, companies make slight modifications to the dosage or the delivery systems, and then encourage doctors to prescribe the new version, or even withdraw the old version completely. If that is successful, there is no market for the old version. 

There is just a new market for the new version that is protected 

by shiny new patents. We have seen this in the addiction medicine 

market as well where a company switched from tablets to 

meltaways just before the patents expired. 

Now these modification patents are quite weak. And in fact, 

when generics challenge these patents, they win three quarters of 

the time. But again, these challenges can take years and competition is thwarted, and prices stay high. 

In addition to gaming, Hatch-Waxman companies carve out competition free zones in ways that have nothing to do with patents. 

There are 13 forms of regulatory exclusivities that companies can 
56 

obtain by doing things like new clinical studies or pediatric studies. 

And with these, companies can keep competitors out even if the 

patent has expired. 

Now these zones were created for very appealing reasons, but 

they are being exploited now to block competition in ways that 

were never intended. As a side note, the key drug in the addiction 

medicine market came through the most powerful of these, the orphan drug exclusivity. 

The spotlight today is on the market for addiction medicine, but 

the game playing is epidemic throughout the pharmaceutical industry. Companies pile these games on, one after another, exploiting 

the laws and regulations that are in place. As always, society pays 

the price with higher taxes to pay for soaring Medicare costs, higher insurance premiums, higher treatment costs, and more suffering 

for those who cannot afford treatment. Nowhere is this terrible 

combination more apparent than in the market for addiction medicine. Thank you very much. 

[The prepared statement of Ms. Feldman follows:] 
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Mr. MARINO. Thank you. Now, as I stated earlier, the Chair now 

recognizes the Chairman of the full Judiciary Committee, Mr. Bob 

Goodlatte from Virginia. 

Mr. GOODLATTE. Thank you Mr. Chairman, and I apologize for 

stepping out of turn. It has been a very busy day, and I was held 

up in the last meeting; also I am going to have to leave for another 

one pretty soon. But I do want to offer some thoughts on this important subject. Today’s preceding marks the fourth in our series 

of hearings focused on competition in the healthcare marketplace. 

Now, the Committee turns its attention to the pharmaceutical industry and the drugs that are used in the treatment of opioid overdose and addiction. 

Competition in the addiction medicine markets, like the pharmaceutical market as a whole, involves a delicate balance. On the one 

hand, we want to encourage pharmaceutical companies to invest in 

expensive research and development in order to bring innovative 

and life-saving drugs to market. On the other hand, we also want 

to encourage sufficient competition to ensure that there is an appropriate check on consumer prices. Today’s hearing will explore 

what polices help to maintain this balance and whether it has been 

upset. 

Like other drugs in the market, addiction medicine has been the 

subject of media reports detailing steady and sometimes dramatic 

price increases. Oftentimes, however, these reports can be misleading, glossing over nuance to achieve a sensational headline. Today’s hearing will allow us to explore whether prices have indeed 

increased material, and what competitive factors impact the ultimate cost to consumers. 

The issues that have been raised in connection with the addiction 

medicine market parallel the issues facing the pharmaceutical market at large. For example, two of the most predominant drugs used 

in the treatment of the opioid epidemic have existed for over 50 

years. Yet, new variations of these old drugs and increasingly inventive applications to administer the drugs continue to come to 

market often accompanied by high prices tags. Persistent innovation is one of the hallmarks of a free market and should be celebrated. 

However, there have been allegations that some companies may 

be using this innovation as a disguise to cover-up the manipulation 

of regulations to preclude competitors from coming to market. 

Clearly, this is anti-competitive conduct that should be swiftly and 

harshly punished. I look forward to hearing the witnesses’ views on 

this issue and whether our existing antitrust laws are equipped to 

address any such behavior. 

I also look forward to hearing what policies influence competition 

in the addiction medicine market including the impact on competition on regulatory oversight by the Drug Enforcement Agency, the 

Food and Drug Administration, and the Department of Health and 

Human Services. To the extent regulation is necessary, we should 

ensure that the addiction medicine market and the entire pharmaceutical market includes proper incentives that foster a competitive 

environment. 

No one wishes for a friend, family member, or a loved one to succumb to addiction. For those that are forced to face the opioid epi-
60 

demic head on, we should strive to encourage a competitive market 

for the drugs that can help them back on the path toward recovery. 

I also want to mention that I think the government plays a role 

in this that needs to be examined more closely. We, I think, invited 

the Drug Enforcement Administration to participate in this hearing, and for various reasons they are not here today. But a number 

of issues related to their work need to be addressed as a part of 

making sure that our consumers, our physicians, and our first 

pharmaceutical companies, are able to operate in a manner that effectively brings the drugs to the right people at the right time and 

I think sometimes government regulations are interfering with 

that. 

Therefore, we should continue to expect further public examination of this, and have the DEA here before us in the future to address this and some other of their regulatory issues. 

So, thank you Mr. Chairman for your forbearance, and I look forward to hearing the questions of the other Members of the Committee. 

Mr. MARINO. Thank you. We will now move into the questioning 

of the panel. The panel did such a good job in keeping within their 

5 minutes, now we will see how well we Congress Members do. 

Dr. Pritchett, I am especially interested in innovative new options to treat overdose. As an 18-year prosecutor, I have seen hundreds if not thousands. When I think of this space, I look to the 

loved ones and first responders who are often the first to address 

addiction and potential overdose. Your testimony mentions that 

there are innovative drugs in new therapeutic areas. 

My two questions are, would you expand on this and explain how 

branded pharmaceuticals are investing and researching new ways 

to address increase need in recent years, as well as different applications that would be used by first responders, emergency medical 

personal, and family? And anytime you want me to repeat these, 

please ask me. 

Ms. PRITCHETT. In terms of looking at the Naloxone space, yes, 

there has been a substantial range of generic products available for 

a long period of time. As I mentioned in my testimony, what we 

have seen change in the past couple of years is the market has sent 

different signals to our industry. So what we have seen is a need 

for expanded options in terms of convenient delivery forms, and we 

have seen a substantial change in State laws, making Naloxone 

more widely available. 

One of the key dynamics here is that now most States have 

changed their laws allowing Naloxone to be available at the retail 

level via standing orders, meaning without a prescription. So, it is 

hard to say in terms of the pricing issues, what is occurring there 

in terms of whether in different elements as a supply chain how 

that is affecting pricing at the retail level. But, in terms of the fact 

that these products are being made more readily available to first 

responders and others, that speaks to the increased demand for 

convenient delivery systems. 

And what we have seen over the past few years, we have seen 

the introduction of an autoinjector but we have also seen most recently the approval of a nasal spray. At the same time, another 

nasal spray was in development that was not approved by the 
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FDA. But in terms of our review of the pipeline, there are about 

35 drugs in development to treat addiction treatment. Some of 

them are in this space, some of them are in the Buprenorphine 

space, but I think what is critically important though is that the 

market has to send signals that there is an incentive to enter this 

market. 

So, when a company is looking at entering this space, they are 

looking at is there going to be demand, are they going to be able 

to make a significant benefit to patients compared to existing 

therapies? And, in this case, that is what driving the introduction 

of new brand competition in this area. 

Mr. MARINO. Thank you. Mr. Gaugh, Dr. Ketcham states in his 

written testimony that the cost of the generic version of 

Buprenorphine had doubled despite a number of competitors in the 

market. Can you explain why that is the case concerning the BUP 

market, and why prices increase generally in the market with a 

number of generic competitors?0 

Mr. GAUGH. Thank you. So, to your question, there are a number 

of different situations that a company has to look at and face when 

they are in a market, and I am assuming in this case these companies are already in the market. So, you have API sources that can 

change and go up in price. You have mergers and acquisitions that 

occur, as I think you well know throughout the supply chain. 

So, when API companies merge, a lot of times that takes one or 

two of the players out of the market and that may increase the 

price of the API. The components that the products use whether it 

is an injectable, tablet, capsule, inhalation, or autoinjector, those 

components have a price point to them as well. And so these many 

factors are taken into account into what causes the price to go up. 

Why a specific company made that decision, I do not know the answer to that. 

Mr. MARINO. Then in 35 seconds, Dr. Ketcham, your testimony 

lays out that there are many barriers experienced by first responders and medical professionals in an effort to respond to these 

overdoses. Can you speak to the belief within the medical community as the best methods and science to approach? 

Dr. KETCHAM. I want to make sure I understand your question. 

So, barriers to getting addiction treatment or treatment for overdose? 

Mr. MARINO. Treatment for overdose. 

Dr. KETCHAM. So, right now, the issue with getting a timely 

treatment for overdose is really having access to Naloxone and the 

people who are around the patient. Just remember that a patient 

never treats himself for an overdose. So, unlike an autoinjector 

such as an EpiPen, where somebody will treat themselves for their 

allergic reaction, getting treatment for your opioid overdose requires there is a bystander who is ready to administer that medication and or a prompt response from law enforcement who hopefully 

can be able to carry that medication which is not necessarily done 

by all law enforcement agencies. This is becoming a bigger part of 

law enforcement’s budgets now, as well, of course traditional EMS 

and fire agencies. 

Mr. MARINO. Thank you. Time is expired. The Chair now recognizes the Ranking Member, Mr. Johnson. 
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Mr. JOHNSON. Thank you, Dr. Pritchett. Professor Feldman testified that drug companies have engaged in legal and regulatory 

games to block entry into the market for opioid addiction treatments, including the practice of evergreening and product hopping, 

brand products whose patents are about to expire. What is your response? 

Ms. PRITCHETT. I do not particularly care for the terms ‘‘product 

hopping’’ or ‘‘evergreening.’’ I think when we are looking particularly at the addiction medications base and we look at the new delivery reforms that have been introduced, these are significant 

medical advances in this very challenging area. One of the most 

challenging aspects of successfully treating addiction is compliant 

patient compliance. And it is not a minimal tweak to develop a new 

delivery system to conduct a relevant clinical trials and make the 

case to the FDA that this is a significant benefit and that this 

should be approved and that it can be easily used. 

So, I think that the innovations that we have seen have been incredibly valuable in increasing our arsenal in the treatment of addiction. If you think about these two spaces what we have seen is, 

we have had standard care in Naloxone has been in vial form for 

decades. And we have had standard treatments in Buprenorphine 

in pill form for decades. But what we are seeing now is a great expansion in the use of the delivery methods. 

Mr. JOHNSON. Okay, all right, thank you. Mr. Gaugh, in your 

written testimony you state that Senate bill 3056, The CREATES 

Act would address abuses of patient safety programs like the Risk, 

Evaluation, and Mitigation Strategies Program. And in a letter opposing the CREATES Act, PhRMA president, Stephen Ubl, recently 

argued that it provides considerable incentives for generic manufactures to litigate, rather than arrive at agreements with 

innovators. What is your response? 

Mr. GAUGH. Under the current situation, as a company comes to 

the market dynamic and the market decision, when they come to 

market, the first thing they have to do is get samples so they can 

develop that product. The only way they can get that sample in a 

REM situation is from the company, directly. So, we do this all the 

time but in a non-REM situation you go to a wholesaler distributor 

to buy that product. Under REMs, it is in a strict distribution and 

you cannot do that. 

So you have to go to the company and once we supply a letter 

to the FDA saying that we want to develop this product, the FDA 

has to determine that we are a company in good standing, they will 

present a letter to us on that, we present that letter to the innovator company and they are to sale the products. But there is no 

factor today that requires them to do that. Other than, we can take 

them to court under antitrust laws. 

Mr. JOHNSON. All right, I understand. Thank you. Mr. Merritt, 

in your written testimony you state that the generic approval backlog is currently at 36 months, undermining competition in the 

brand drug market. What recommendations do you have for reducing the backlog? 

Mr. MERRITT. Well, we would ask for better staffing, better resources there; not better staffing because of quality, but more staffing and so forth. It is a very serious issue and if there is a backlog 
63 

there needs to be maybe better capacity there. We would also ask 

for the FDA to look at situations where for instance there is a generic that does not have competition or an off patent brand that 

does not have competition and accelerate approvals for drugs that 

can compete in those spaces too. 

Representing the payers for these medicines, the unions, lawyers, 

insurers, and so forth, obviously we just want lower costs. But, 

lower costs only happen when there is competition. And the more 

competition there is, the lower the costs that there are. And the 

FDA, I think, is doing a good job they have a lot of volume but they 

need to do more. And I think the situation in America is changing 

where they may need to ramp things up maybe than they anticipated. 

Mr. JOHNSON. Thank you. Dr. Ketcham, have other areas of 

treatment suffered as the result of the necessary response and the 

expense associated with that response to opioid overdoses and addiction treatment? 

Dr. KETCHAM. I am trying to make sure I understand the question. 

Mr. JOHNSON. Yeah, because of the costs associated or the increased costs associated with opioid overdoses and addiction treatment, have other areas of treatment suffered? 

Dr. KETCHAM. So, specifically, many patients that I would see in 

the emergency department who are wanting to get started on treatment for their addiction: Their single most common barrier is being 

able to afford the medication; the same thing upon release of prisoners, of those incarcerated upon reentry into society, which is a 

very important time to begin treatment. The cost of medication is 

the single biggest barrier. 

Therefore, it is the process, even when working with social workers in the emergency department, to try to help the patient now 

get onto Medicaid. There is a time delay between when they can 

get Medicaid acceptance, then to submit and get preapproval for 

Buprenorphine. I can give them a dose in the emergency department to get them started, but really getting a prescription filled 

and then have a place for them to follow up, that is the significant 

barrier for addiction. 

Mr. JOHNSON. All right, thank you. Mr. Chairman, I would ask 

that a letter dated September 22, 2016 from Consumers Union on 

this issue be admitted into the record, without objection. 

Mr. MARINO. Without objection, so ordered. 

[The information referred to follows:] 
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Mr. JOHNSON. Thank you. 

Mr. MARINO. The Chair now recognizes the Chairman, Mr. Goodlatte. 

Mr. GOODLATTE. Thank you, Mr. Chairman. Dr. Ketcham, there 

have been allegations that threats by the Drug Enforcement Administration, the DEA, have resulted in pharmacies removing 

Buprenorphine products from their inventory. Are you familiar 

with these allegations, and can you comment on the alleged conduct? 

Dr. KETCHAM. I cannot verify that that is necessarily the case. 

I do know that pharmacies in my region try to keep only a limited 

amount of Buprenorphine in stock, try to preserve that for when 

a patient shows up with a prescription in hand. 

I will say, however, that, regarding the DEA, and I think their 

general view of treating addiction with Buprenorphine and officebased practice; that after you have been a licensed Buprenorphine 

prescriber for 3 years, at some point you are supposed to have a 

random meeting with the DEA, in which they are going to interview you, go over your patient logs, your prescriptions, et cetera. 

When they do this, they do interrogate you and make you feel 

like you are a criminal, and this really is a significant factor that 

causes physicians not to want to participate in addiction treatment. 

Let me also add that there is, however, a significant amount of 

diversion of Buprenorphine, you know, in almost every community, 

and I believe that the DEA has a very founded interest in why 

there is such a tremendous amount of diversion of Buprenorphine 

in most communities. 

Mr. GOODLATTE. But do you think that if that is indeed leading 

to local pharmacies carrying limited supplies, is that leading to the 

inconsistency that patients are finding? They will get a prescription. They will go get it filled, and then the next month or whenever they go back again, that pharmacy does not honor their prescription? 

Dr. KETCHAM. I think the issue is that the cost of the medication 

is high, and in pharmacies that I have spoken to, when working 

with Medicaid, for example, they are selling the Buprenorphine to 

patients at the same cost for which they are paying for the medication, and usually they pay through a wholesaler such as McKesson, 

let’s say. 

So, if your pharmacy is buying it at that price, that is exactly the 

price they are turning around and selling it to patients for, with 

usually a minimal fee of about a dollar or so for packaging. So 

there is no market. There is no, you know, profit for them anywhere in this. 

Mr. GOODLATTE. I get the profit side of it. 

Dr. KETCHAM. Yeah. 

Mr. GOODLATTE. We definitely want to hear more about why 

these prices cannot be lowered through competition, but I also 

would suspect that if you are treating a patient for addiction, consistency and being able to stay on the regimen prescribed by the 

physician would be extremely important, and the inconsistency 

with which that physician can rely on local pharmacies to have the 

product available would make a big difference in the success of 

treating the patients. 
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Dr. KETCHAM. I completely agree, and that is definitely a problem that our patients face. I will also add to that that there appears to be varying quality amongst the generic product, and when 

the generic product changes within a pharmacy, patients then are 

often trying to look for a different pharmacy that carries a different 

generic version of the drug. 

Mr. GOODLATTE. So the physician wants them to take a specific 

formulation, and expect that it is going to be at the same place 

where that patient is used to going. This consistency of carrying 

the same product over a period of time is very important, and pharmacies should work with the DEA and work with their suppliers 

to make sure that they can be more consistent than they are in 

some areas. 

Dr. KETCHAM. Absolutely. 

Mr. GOODLATTE. Thank you. Dr. Pritchett, your testimony outlines what appears to be a relatively competitive market for both 

Buprenorphine and Naloxone products. Given its competitive state, 

can you explain the media accounts and testimony today that suggests rising prices in each of these markets? 

Ms. PRITCHETT. So I would just say that I represent a trade association. My representative from GPhA is not privy to actual pricing 

information of any of these products. We did have IMS just take 

a look at the overall trends and, for example, for Buprenorphine related medications IMS data shows that pricing for both the generic 

and innovator products have similar pricing; that it has remained 

generally stable since 2011. 

Now, one of the challenges related to Naloxone, as I mentioned 

in my testimony, is that we have had a shift in that now many 

States are having standing orders where Naloxone products are 

available without a prescription at the pharmacy level. We do not 

have insight into what pricing may be occurring at the retail level. 

So, that is one of the challenges inherent there. 

But I would say what we have seen in terms of—not looking at 

sales, but looking at volume, is that in both of these spaces that 

you have substantial generic competition. We have recently had an 

influx of innovative products. If you look at Naloxone, we have had 

an autoinjector form that has been introduced, and then we have 

had a nasal form introduced, and I think now you have two brands 

competing on the delivery system method, so that is a sign of positive competition and, given what we are seeing in the pipeline, we 

expect to see more competition there. But, again, I cannot speak to 

the price reports that have been reported in the media. 

Mr. GOODLATTE. Let me just say—— 

Ms. PRITCHETT. IMS data just does not seem to be bearing that 

out. 

Mr. GOODLATTE [continuing]. As a member of the trade association that many pharmaceutical companies belong to, I hope you 

will convey back to them our concern, that the Congress has just 

passed CARA legislation, designed to try to deal with the addiction 

epidemic in our country, and that one of the aspects of being successful—we passed about 17 bills, some out of this Committee, 

some out of the Energy and Commerce Committee, that are going 

to help, I think, a lot in this area, but they are not going to help 

as much as they could unless the product, for people who obviously 
72 

are not, taken as a whole, the most likely to be able to pay whatever the market demands. 

They are going to need to be able to have an affordable product; 

that that is an important thing for your industry to consider, as we 

take on this national challenge of dealing with addiction. 

Ms. PRITCHETT. Thank you for that. One thing I would note, IMS 

just released a report this morning that found that the annual 

growth rates in the number of prescriptions for Buprenorphine 

medicines slowed from 22 percent in 2012 to about 6.4 percent in 

2016, and IMS found that the states with the highest rates of heroin and other opioid use had below average levels of Buprenorphine 

use and public funding, suggesting a disconnect between the need 

for treatment and access and coverage of treatment. And what we 

have seen is that a lot of these medications require, as mentioned 

by Dr. Ketcham, require a step therapy. So, you have to fail on 

multiple other options before you get to some of these medications. 

Some of these are not even covered. For example, Vivitrol, which 

is an innovative medication in terms of it is a once monthly 

injectable that just does not just treat withdrawal symptoms, but 

treats opioid dependence; that you have three State Medicaid programs that require substantial step therapy and prior auth before 

you can even have an opportunity for that. And the Arkansas State 

Medicaid program does not even allow access to it. 

So, agree that we need more competition, but we also need to ensure that, as we are introducing competition, that there is the potential that there is going to be uptake of these products. As 

innovators are looking at entering a market, they do need to know 

that this is going to be valued by payers and patients. So that is 

an important dynamic as well, but appreciate the thoughts. 

Mr. GOODLATTE. Well, thank you, and if you would submit that 

study to the Committee, we would be more than anxious to have 

the benefit of it. 

Ms. PRITCHETT. Certainly, will do so. 

Mr. GOODLATTE. Thank you. Mr. Chairman, my time has long 

since expired. 

Mr. MARINO. Thank you. The Chair now recognizes Mr. Conyers, 

the Ranking Member of the full Judiciary Committee. 

Mr. CONYERS. Thank you very much. I thank the witnesses. Professor Feldman, what are some of the ways that drug manufacturers manipulate the existing patent and regulatory schemes to extend their monopolies on brand drugs? 

Ms. FELDMAN. Understanding the life cycle in the pharmaceutical industry is a matter of understanding how the games get 

piled on one after each other. With each of them, they got a small 

amount of additional exclusivity; 5 months here, 6 months there, 

a couple of years. But you add them together and they add up. So, 

a 5-month extension in a blockbuster drug can be worth half a billion dollars or more. You add a billion here, a billion there, that 

adds up to real money, and the taxpayers are paying. So it is not 

the individual game. It is the way that games are strung out, one 

after another. 

Mr. CONYERS. Is this true of generic manufacturers as well? 

Ms. FELDMAN. The best and most competitive market is when 

you have lots of competitors directly in that market. When there 
73 

is only one generic competitor, the price generally drops by only 

about 15 percent. When you have multiple generics, you often see 

price drops in the 85 to 90 percent. So there are definitely incentives for first generics, also who wish to keep others out as well. 

Mr. CONYERS. Thank you. Do you support S3056, the CREATES 

Act, which, as you know, among other things, allows a generic drug 

developer to sue a brand manufacturer to obtain the necessary 

samples to create a bio-equivalent product? 

Ms. FELDMAN. I had the honor of testifying on the Senate side 

about the CREATES Act a couple of months ago. I do support that 

type of approach, particularly taking the competition policing out 

of the FDA, and into agencies and courts that are better at doing 

that. The FDA is great at policing safety; not so great at policing 

competition. 

Mr. CONYERS. Thank you. Mr. Merritt, you suggest that one of 

the factors keeping the price of the Naloxone high is the fact that 

many States require insurance coverage for it, hampering the ability of pharmacy benefit managers to negotiate discounts and rebates. Do you support that? 

Mr. MERRITT. Well, insurance does cover that, just to clarify that, 

sir. Insurance and insurers generally cover these products. The 

challenge is when there is a mandate to cover one particular generic, if there are competitors available, or one particular brand, 

for that matter. Because when there is a mandate to cover that, it 

gives all the pricing power back to PhRMA because they do not 

need to compete on price to get on a formulary or to get on a formulary with a lower co-pay. 

So that was the intent of that particular statement, but these are 

broadly covered, although I will add that many, many times, although I do not have the percentage in front of me, these are not 

processed through insurance. They are products that have been 

given away. Different drugs have been given away. People come 

and sometimes they do not want to process it through insurance, 

sometimes they are uninsured themselves, and so that is just another clarifying factor. 

Mr. CONYERS. Dr. Ketcham, what is the impact of the spiking 

price of opioid addiction treatments on the ability of healthcare providers to address addiction long term? 

Dr. KETCHAM. Sir, the rising price essentially means that patients will not fill their prescriptions, and without filling the prescription, it means they discontinue getting their addiction treatment. What invariably often happens in this situation, which is 

very unfortunate, is that patients, when they cannot afford the 

medication, will often do their own sort of self-tapering. 

Many patients are self-managing with Buprenorphine; either 

that they have been prescribed for that they are running out of, or 

that they are obtaining in a secondary market, and very often 

when we see them tapering very quickly, much faster than we 

would recommend that they do, there is a very high rate of relapse, 

and then proceeding back to using heroin or other black-market 

opiates. 

Mr. CONYERS. Thank you, Mr. Chairman, for permitting me to 

ask these questions. 
74 

Mr. MARINO. Mr. Ranking Member, you came under everyone 

else today. So, kudos. The Chair now recognizes the gentleman 

from Georgia, Congressman Collins. 

Mr. COLLINS. Thank you Mr. Chairman, and the Ranking Member said I could have his time, his extra. There you go. We will 

split it; that is what we will do. No, I appreciate the time, Mr. 

Chairman. We will be submitting questions for four of the witnesses today on different wells, but I have some other issues that 

I would like to address because I do not get the opportunity often 

to do so. Mr. Merritt, thank you for being here today. 

I have an opportunity to say something here that, for many in 

this room, is going to find they may fall out of their chairs because 

I am going to agree with you on some parts of your testimony. I 

agree that opioid epidemic and opioid addiction is heartbreaking. I 

have seen it tragically up close and personal, and agree that the 

Comprehensive Addiction Recovery Act was a good first step toward combating this problem. That is why I was a part of that act. 

I think we can agree there needs to be competition in the addiction medication market, but when we talk about general pricing, 

there are some points that I want to raise that concern me, and 

I think you know we have a different opinion on the value of PBMs 

to the healthcare marketplace. You say in your written testimony 

that PBMs help bring down prices of prescription drugs across the 

market by harnessing competition and among manufacturers. You 

go on to say that the one way the PBM lower prices for prescription 

drugs is through taking advantage of all the efficiency of mail service pharmacies. 

Mr. Merritt, is there not an inherent conflict of interest when a 

PBM mandates or heavily incentivizes patients to use their own 

specialty or mail order pharmacy? Can you please explain how 

steering patients to a PBM owned specialty or mail channel allows 

for greater competition in the marketplace? 

Also, help me understand how it is beneficial for a patient to obtain expensive, complex medications, some of which need to be selfinjected, in the mail, where they have zero opportunity to show inperson how to properly use the medication for maximum benefit? 

Mr. MERRITT. Sure, well, first of all, the Federal Trade Commission has looked into this, in terms of the mail and if there is a conflict of interest, and found that there is not. And I think probably 

the way to think about it—— 

Mr. COLLINS. That is not a real helpful analogy, given their track 

record in some of the trade. 

Mr. MERRITT. No, I have—— 

Mr. COLLINS. We are going down a wrong road to start with here. 

Mr. MERRITT. Okay, well, I think the FTC is a respected agency, 

but we can disagree on that. I would say this. Maybe a simpler way 

to think about it, because all this is so complex, with so many different layers, even for people who really know a lot about health 

care. Think about it like Amazon.com. They have Prime, which a 

lot of us use for home delivery. Amazon is its own deliverer. 

Would it be smart to force them to use Federal Express or UPS 

or some other higher cost carrier to deliver their goods? Would that 

be better for consumers? Would that take advantage of scale? No, 

I think it would cost more. It would not add any value to con-
75 

sumers, and the fact that we work with mail service pharmacies 

often that we partner with or own adds value because we can deliver those products cheaply and more effectively to consumers. 

Mr. COLLINS. Well, I think that is even under question because 

even a study was done from TRICARE says that you are 83 percent 

higher than most community pharmacies serving through mail 

order. So I mean, these are the problems that I have. I understand 

the PBMs will usually pay the pharmacy one amount for dispensing a drug, but charge a payer a different amount, referring 

to this as the spread. 

CMS is aware of this and have changed part of the rules to account for this practice, which is inflating patient costs. Can you explain to me, and the rest, the often large differential in the spread 

between what PBMs reimburse pharmacies, versus what you 

charge health plans, and could you not save the system dollars, 

which is actually what your own website says that you supposedly 

do by lowering that spread? 

Mr. MERRITT. Well, first of all, we do not work for the pharmacies. We work for the employers and the consumers who go 

there, right? 

Mr. COLLINS. Most of your members own pharmacies. 

Mr. MERRITT. No, but we do not work—— 

Mr. COLLINS. Let’s at least get this straight. 

Mr. MERRITT. We do not work for drugstores. Our job is negotiating—— 

Mr. COLLINS. No, you own them. 

Mr. MERRITT. No, that is a different story. We—— 

Mr. COLLINS. Yeah, we do not want to talk about that story. It 

is vertical integration that is a problem here. 

Mr. MERRITT. Well, if you give me just a second, I will talk about 

it and answer your question. PBMs are hired by employers to negotiate against and with drug companies and drugstores to make 

sure that people get access to the medications and drugstores they 

need, but that we also use the competition in those spaces, for instance, where there are numerous brands or brands and generics 

that treat the same conditions. We want to encourage people to use 

the least expensive one. The same is true with drugstores. Some 

local drugstores are more expensive than others. We want to encourage people to use the more affordable drugstores. 

In terms of spread pricing and so forth, that is something that 

the plan designs. That is something that the employer decides. 

They are fully aware of that, and if they want to provide incentives 

for us to get better deals with drugstores by doing that, they will 

go ahead and do that but, as you said, Medicare and a lot of other 

programs and payers do not want that. That is fine too. It is totally 

up to the payer. 

Mr. COLLINS. Look, TRICARE’s own study said if they got rid of 

PBMs, they would save $1.3 billion in 2013. You cannot tell me, 

and sit here and tell me that your groups, which you represent, 

many of which have testified before this Committee and been untruthful with this Committee can say—— 

Mr. MERRITT. No. 

Mr. COLLINS [continuing]. No, I would not go there with me on 

that one. You did not testify. One of your members did. 
76 

Mr. MERRITT. Okay. 

Mr. COLLINS. And this is the problem we have. And do you want 

to look at it over all, not only the opioid addiction issues we have 

got here, but the pharmacy prescription. I have one more Mr. 

Chairman, because this is out of his own testimony. It says, ‘‘Allow 

them stronger measures to remove disciplined or rogue pharmacies 

from plan networks,’’ as one of your solutions. 

I do not think you need any more power because right now you 

are removing pharmacies that actually try to compete in their marketplace and serve on regular means. You do not need more power 

to go after them. You have got plenty right now, controlling 83 percent of the market. Your business model that suffers and forces 

customers to have problems; not the other way around. The last 

thing we need to do is give PBMs more power. Thank you, Mr. 

Chairman, I yield back. 

Mr. MARINO. Mr. Merritt, you can respond if you choose to. 

Mr. MERRITT. Well, I would just say that, as Dr. Ketcham pointed out, there is a problem with diversion. There is a problem with 

fraud in health care, in general. We see it at the pharmacies. We 

see it in other places in health care as well. Some drugstores are 

better than others, and so we want to make sure the highest quality, most affordable drugstores are ones that people are encouraged 

to go to. We may have a disagreement on this, but this is the way 

that we see it, and I think facts back that up. 

Mr. COLLINS. Mr. Chairman, all that is in these pharmacies were 

actually doing something—— 

Mr. MARINO. Gentleman—— 

Mr. COLLINS. Are we going to get a second round, because that 

statement right there is false. 

Mr. MARINO. No, we are not, because before I got here because 

of votes and not keeping this panel, you certainly can submit written questions too. This the business to be answered. The Chair now 

recognizes the gentlelady from the State of Washington, Congresswoman DelBene. 

Ms. DELBENE. Thank you, Mr. Chairman, and thanks to all the 

witnesses for being with us today. Today, we are considering the 

intersection of two important policy priorities; addressing the cost 

of prescription drugs, and combatting the opioid crisis. As everyone 

knows, the epidemic of opioid abuse is having a devastating effect 

on Americans’ health and safety, both in my home State of Washington, and across the country. With more than 120 deaths occurring from drug overdoses every day, more than half from prescription drugs, it is clearer than ever that Congress must take action 

to treat addiction and save lives. 

Addressing this epidemic will require a multi-pronged approach, 

and one piece of the solution must be ensuring access to addiction 

treatment medicines, and overdose reversal drugs. That is why the 

Comprehensive Addiction and Recovery Act, or CARA, authorized 

important new funding for the expansion of medication assisted 

treatment. But that support could be severely diminished if our 

constituents cannot afford the cost of these medications, not to 

mention law enforcement agencies and State, local, and tribal governments. And CARA cannot solve this crisis alone. We are also 
77 

going to depend on the manufacturers of addiction medicines, and 

the regulatory structure that governs them. 

So, as someone who started her career in the life sciences, I know 

how important it is to strike the right balance between incentivizing medical innovation, and ensuring access to affordable medicines. But some companies have rightfully drawn criticism for increasing drug prices to generate profits, rather than support the 

development of life-saving therapies, and I have heard from hundreds of constituents who are outraged by what they have heard 

on the news. 

So, as we work together to fight the opioid crisis, it is appropriate to examine the state of this marketplace, and ensure that it 

is working as it was intended. 

Dr. Ketcham, in negotiations over CARA, Congress failed to provide the President’s request for $1.1 billion in emergency funding 

to immediately fund new addiction treatment efforts. Instead, funding decisions were left to the annual appropriations process, and 

now we hear there might be $37 million in a continuing resolution. 

So, do you believe that emergency funding would have helped 

Americans with the substance use disorder; help them to seek 

treatment, complete treatment, or sustain their recovery? 

Dr. KETCHAM. Well, absolutely. In any way that funding filters 

down to the patient being able to obtain that medication, as well 

as in any path that funding proceeds to help keep open and open 

more addiction treatment centers or other mental health centers, 

where addiction medicine is handled. 

Ms. DELBENE. How do you believe those funds would best be 

used to help first responders and healthcare providers fight the 

opioid epidemic. I mean, you have talked a little bit about keeping 

treatment centers open, but where do you think those funds are 

most critically needed? 

Dr. KETCHAM. I do think that a multi-pronged approach is necessary. I am worried that, particularly as I stated earlier, the 

smaller fire departments, EMS agencies that are starting to really 

look at the price of Naloxone as a significant budget item in their 

pharmaceuticals. I think this needs to be addressed, and this is one 

area where I think funding should be directed. 

However, funding can be used to lower the overall price and 

evaluate the whole competition issue. That would, I think, go a 

long way as well. But also, again, we certainly need more access 

by patients, you know, to the mental health care so they can start 

getting their addiction treatment. 

Ms. DELBENE. Thank you. Regarding competition, Professor 

Feldman, we talked a little bit about the competitive marketplace 

in this area. Are there other factors we have not talked about yet 

today that you think are critical that we should be aware of that 

are impacting pricing? 

Ms. FELDMAN. I think I would put it this way. In a well-functioning market, if someone charges eye-popping prices, a bright 

young company will come in and compete and the price will come 

down. So if we are not seeing that—and we are not seeing that— 

then we have to ask, ‘‘What is going on, and what is functioning 

improperly in the market?’’ We have lots of carving out of little ter-
78 

ritories there, but we do not have the type of robust competition 

that we would like to see in this market. 

Ms. DELBENE. Thank you. Thank you, Mr. Chair, and I yield 

back. 

Mr. MARINO. Thank you. Seeing no other Members, this concludes today’s hearing. I really want to take the time to thank you 

for being here. I am glad we did not have to hold you over, nor 

would I have held you over, but I appreciate what you had to tell 

us today. We have learned from it, and all of us in this room, from 

the family members, to the businesses, to Congress. We have to 

pay particular attention to this and react, because it is only going 

to get worse. Without objection, all Members will have 5 legislative 

days to submit additional written questions for the witnesses or additional materials for the record. This hearing is adjourned. 

[Whereupon, at 3:29 p.m., the Subcommittee adjourned subject to 

the call of the Chair.] 
(79) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD
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Response to Questions for the Record from Anne McDonald Pritchett, Ph.D, 

Vice President, Policy and Research, Pharmaceutical Research and Manufacturers of America (PhRMA) 
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Response to Questions for the Record from David R. Gaugh, R.Ph., Senior 

Vice President for Science and Regulatory Affairs, Generic Pharmaceutical Association 
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Response to Questions for the Record from Mark Merritt, President and 

Chief Executive Officer, Pharmaceutical Care Management Association 
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Response to Questions for the Record from Robin Feldman, Esq., Harry and 

Lillian Hastings Professor of Law, Director of the Institute for Innovation 

Law, UC Hastings College of the Law 
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