Executives from seven drugmakers laid out their ideas for lowering drug prices to the Senate Finance Committee on Tuesday. One idea was noticeably absent: lowering drug prices.
The companies — AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer and Sanofi — threw their support behind a number of Trump administration proposals and pitched some of their own ideas in written testimony submitted ahead of the hearing. Executives championed the investments their companies make and the lives they save, while acknowledging patients cannot benefit if they can’t afford medication.
They criticized middlemen, including pharma’s favorite target, pharmacy benefit managers, for pocketing discounts instead of passing them along to patients. They suggested changes to Medicare, including capping the amount seniors would pay for on their own at the pharmacy counter every year.
But none of the seven drugmakers committed to, or even suggested, lowering the list prices of their drugs. Some referenced these prices as simply the price that’s advertised, not what consumers actually pay.
AbbVie has nearly doubled the price since 2014 of Humira, which is used to treat arthritis, plaque psoriasis and Crohn’s disease, among other diseases, according to a review of data provided by Rx Savings Solutions. The drug now carries a list price of more than $60,000 per year. Sanofi has similarly increased the price of its long-acting insulin Lanctus 48 percent since 2014, according to data from Rx Savings Solutions.
“We’ve all seen the finger pointing,” Chairman Chuck Grassley, R-Iowa, said in his prepared remarks. “Every link in the supply chain has gotten skilled at that. But, like most Americans, I’m sick and tired of the blame game. It’s time for solutions.”
High drug costs have become a rare bipartisan issue with lawmakers on both sides of the aisle demanding something be done. President Donald Trump has made lowering prices one of the key issues of his administration. Democrats are jockeying to prove they can lead reform.
Senators are expected to press executives during Tuesday’s hearing about recent drug price increases. AbbVie CEO Richard Gonzalez, AstraZeneca CEO Pascal Soriot, Bristol-Myers Squibb CEO Giovanni Caforio, Johnson & Johnson’s Janssen unit Executive Vice President Jennifer Taubert, Merck CEO Ken Frazier, Pfizer CEO Albert Bourla and Sanofi CEO Olivier Brandicourt are scheduled to testify.
Executives threw their support around a Trump administration proposal that would pass an estimated $29 billion in rebates paid to pharmacy benefit managers to consumers. Drug manufacturers pay PBMs the rebates for getting their drugs covered by Medicare’s Part D prescription plan.
“Today’s current drug rebate system is good for two things: driving up both drug list prices and consumer out-of-pocket costs,” Pfizer’s Bourla said, according a transcript of his prepared remarks.
A day before the hearing, JC Scott, CEO of the Pharmaceutical Care Management Association, the PBM lobbying group, said PBMs “are the primary advocate for consumers in the fight to lower prescription drug costs.”
The health insurance lobby on Monday blasted drugmakers, saying, “many drug treatments now come with six-figure price tags.”
“Drug prices are out of control, and drug manufacturers are working relentlessly to eliminate the mechanisms in our system that hold down costs for patients,” America’s Health Insurance Plans spokeswoman Kristine Grow said in an email. “The problem is the price.”
The pharmaceutical executives said they were not in favor of another Trump administration proposal that would permit Medicare to create a new payment model that would bring drug prices in line with what other nations pay. Drugmakers are not required to negotiate prices with the federal government like in other countries, and some believe that has led to “sky high” prices.