OPINION:
American families are gathering around the dining room table, trying to figure out how to tighten their belts while the federal government looks for new ways to spend their tax dollars.
With nearly one-third of the total $6.4 trillion in federal government spending this year on health care, it is time Congress follows the lead of American families and acts to get Washington’s health care spending under control. Today marks the inaugural meeting of the House Budget Committee Health Care Task Force, which aims to shed light on the pressing issue of rising health care costs and their implications on our nation’s budget.
With nearly three decades of experience practicing medicine in North Texas, I’ve developed an understanding of the complex challenges within the American health care system. Since being elected to Congress in 2003, I’ve been a stalwart member of the Energy and Commerce Committee, which has wide-reaching jurisdiction over healthcare-related matters. I currently serve on the Rules Committee, where all legislation vying for a place on the House floor is scrutinized.
I am grateful for the trust placed in me by Chairman Arrington to execute our mission: To find ways to improve health outcomes while reducing federal spending. Our task force started with a Request for Information (RFI), where we cast a wide net, soliciting ideas that have garnered an overwhelming response signaling pent-up demand for the work of the task force—over 180 submissions. This wealth of input from stakeholders, ranging from large medical centers to small practices, will be the cornerstone upon which we build our priorities and future discussions.
The House Budget Committee holds primary jurisdiction over the Congressional Budget Office (CBO). It is our duty to ensure that CBO equips our legislators with the most accurate and up-to-date information possible. This will form the bedrock of informed policy decisions as it relates to health care, especially considering the critical issues at hand.
Today, we consider one of those issues - the Inflation Reduction Act’s (IRA) Medicare drug price control scheme. We have already seen its profound impact on medical innovation, with fewer life-saving medications making it to patients. The initial CBO estimates projected a marginal reduction in drug introductions, but independent analyses present a picture that is much more dire. Many foresee a higher number of patients being denied access to vital medicines, and some drug manufacturers have already halted innovative research and development.
In the discussion surrounding the reduction of health care costs, it is imperative to strike a balance that preserves innovation, as it plays a pivotal role in long-term cost containment by alleviating the burden of chronic diseases. Acknowledging the Congressional Budget Office’s (CBO) role in shaping policy, the CBO’s improved scoring of IRA’s drug pricing provisions is crucial. Notably, the CBO itself has recognized the cost-reducing impact of medical innovation and novel medicines in a recent letter to Senate Budget Committee Chairman Whitehouse. By facilitating innovative drug development and encouraging the creation of new treatments, we can not only reduce long-term health care expenses but also envision potential cost savings from curing debilitating diseases such as Alzheimer’s, highlighting the strong correlation between health care innovation and costs.
The concerning overreach doesn’t stop there. Currently, there is a push to expand these drug price controls. President Biden’s Fiscal Year 2024 Budget includes provisions for such expansion, and Congressional Democrats have introduced bills echoing this sentiment. We must, therefore, ensure that policymakers are fully aware of the potential consequences that could ripple through the American health care system.
Today’s roundtable is a platform for a constructive dialogue. We aim to understand how CBO assesses a policy’s impact on drug development and identify areas where improvements might be needed. This discussion is pivotal for shaping well-informed health care policies that will preserve cures for patients who desperately need them.
Our panel boasts a lineup of experts who will share their insights. We will begin with CBO Director Swagel, who will shed light on the agency’s analysis of drug price controls under the IRA, including the Drug Development Model. We’ll then hear from former CBO Director Doug Holtz Eakin, who will share ideas on how Congress can effectively collaborate with CBO for such analyses. Duane Schulthess, representing Vital Transformation, a health care economics firm, will discuss their work on modeling the impact of IRA drug price controls on new drug development. Finally, Peter Kolchinsky, a seasoned venture capital investor, will delve into the IRA’s influence on the biopharmaceutical investment ecosystem.
The work of the Health Care Task Force reflects the needs of our country as we examine these issues at the federal level. Today, we take our first step using this platform to spark constructive dialogue and propel our federal government toward a more accurate and intentional approach to health care spending.
Although the American bottom line matters, this effort is not just about numbers; it’s about shaping the future of health care and ensuring the well-being of American patients.
• Rep. Michael Burgess is an American physician and politician representing Texas’s 26th congressional district in the United States House of Representatives.
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