Pharma execs testify before senate on high drug prices


#1

On Tuesday February 26, executives from seven pharmaceutical companies were called on to testify before the Senate Finance Committee to explain the soaring cost of prescription drug prices in the United States.

Executives representing AbbVie, AstraZeneca, Bristol-Myers Squibb, Janssen, Merck, Pfizer and Sanofi were called on to defend their role in the cost of drug prices. Notably absent from the hearing were representatives from Eli Lilly and Novo Nordisk, who along with Sanofi control roughly 90 percent of the global insulin market.

Senator Chuck Grassley (R-Iowa) opened the hearing lamenting the fact that Americans are rationing their medication, or in some instances simply foregoing it all together due to cost. He went on to say “We’re all trying to understand the sticker shock that many drugs generate — especially when some of these drugs have been around for a long long time.”

Grassley acknowledged from the start the “finger-pointing” that goes on between manufacturers and the various middlemen — Pharmacy Benefit Managers (PBMs) and insurance companies. “Like most Americans, I’m sick and tired of the blame game. It’s time for solutions.” Grassley said.

The majority of the hearing focused on list prices. Sanofi CEO Olivier Brandicourt pointed out that list prices are rarely paid in full, with PBMs negotiating discounts and rebates on behalf of employers and insurers. Brandicourt told senators that “under the current system, savings from rebates are not consistently passed through to patients in the form of lower deductibles, co-payments or coinsurance amounts … Addressing list prices alone will not be sufficient for solving the problem of patients’ out-of-pocket costs.”

Senator Ron Wyden (D-Ore) pushed back on the idea that list prices were insignificant. “I think you and others in the industry are stonewalling on the key issue, which is actually lowering list prices,” he said. “Lowering those list prices is the easiest way for consumers to pay less at the pharmacy counter.”

Several of the executives voiced support for a proposed change from the Trump administration that would see rebates offered directly to the patient at the pharmacy counter, rather than being negotiated in secret with PBMs. Some execs even stated that they would lower their list price if the proposal is finalized.

Representatives from the drug companies pushed back on the idea that their prices should be more in line with those in other developed countries. When asked why his company’s drugs cost 40 percent less on average in France and Germany, Richard Gonzalez, CEO of AbbVie, acknowledged that his company still profited in those countries, even with lower prices.

Gonzalez defended the higher list prices in the U.S. citing research and development, saying that “If a market the size of the U.S. were to collapse to the lower end of that pricing model… AbbVie would not be able to invest in the level of R & D that it invests in today”.

The Senate Finance Committee launched a separate investigation last week into insulin pricing, sending letters to the “Big Three” insulin manufacturers requesting information on the process used to determine list prices. The bipartisan investigation also requested “details on the cost of research and development, production and marketing and advertising, revenues and gross margins from selling insulin, as well as the companies’ funding of patient assistance programs and third-party tax-exempt organizations.”

Published originally HERE


#2

A few minutes ago I read a news article on how the execs blamed everyone else. Typical.


#3

667.00 for 2 vials of Novolog. Ridiculous

minus coupon of 100.00 still ridiculous


#4

I remember the days when some of my insulin was $12 retail.


#5

Hopefully with all of the recent attention about this issue, mainly insulin prices, there will be some actual change. It is really encouraging how main stream this issue has become. Politics aside the Hasan Minhaj show Patriot act on Netflix did an entire episode on insulin drug prices alone, and did an excellent job of explaining what diabetes is and the difference between type 1 and type 2.


#6

I watched this hearing on CSPAN yesterday. When AbbVie CEO Mr. Gonzalez made this statement, it suggests to me that under the status quo, US patients subsidize Pharma R&D for the entire world market. If R&D costs need to be recouped, then it makes sense that all countries share in this. I fear, however, that the Pharma execs are using R&D costs as a way to distract consumers as they pursue extreme and unjustified profits.

I do not fault the regulatory control that other industrialized governments exert to keep a lid on the unabashed avarice of multi-national pharmaceutical corporations. It’s time that the US government take action to extinguish this wholesale legal thievery.


#7

Couldn’t agree more.


#8

And one of my first questions to that statement would be, “Can you show me where the excess profits you earn is re-invested into R&D?”

Followed by, “Are the new drugs created by the R&D that is being paid for by American consumers only available in America, or do you sell them to the rest of the world?”

Followed by, “How many of the new drugs were actually discovered and developed using funds from the US Government’s NIH (and other grants)?”


#9

That point was explicitly made by at least one member of the committee. The Pharma reps were not persuaded by that point.


#10

I’m just getting a little tired with the threats that sound so magnanimous “Without this _____, we won’t be able to have innovation/high-paying jobs, etc, etc.”

How much is too much?


#11

Finally back on insurance and I was shocked at what my 40% copay would be for Dexcom using my insurance only Dexcom supplier EdgePark. Dividing the quoted copay amount by 0.4 resulted in indicated costs for G6 Receiver and Transmitter at twice what I can buy directly from Dexcom. And indicated price for a box of sensors is $364.50 while Dexcom’s price is $349 (or if on autoship program - any type sensors are $299). You know that as a high quantity buyer, EdgePark moves at least a thousand times the amount of sensors than any individual will purchase and therefore should be purchasing at much less than $300 per box.

As if we needed any confirmation - we are funding R&D for the benefit of the entire world


#12

oooh, I missed this one. Heres the video. https://www.c-span.org/video/?458198-1/lawmakers-press-pharma-ceos-rising-drug-prices&live=

@Terry4, that’s your state at work up there!!! Good work.


#13

I buy my Novolog from Canadian Pharmacy @ $48 per vile!!! Insulin is sent to my home in PA via Canada Post/UPS


#14

@Bob41 Are you sure it’s vile? :slight_smile: My insulin is pretty decent.


#15

Thanks for this post. I made a comment about the hearing in response on another topic before I saw this post.

I never seem to be in the right place at the right time.


#16

I see now that Lilly is going to sell a generic form of Humalog for half the price of the brand-name variety. I can’t understand how they can sell both the generic and brand name of the same insulin, but that’s for clearer minds than me. What worries me is whether Medicare will take Novokog and FIASP off of their reimbursable list and mandate that generic Humalog is all they will pay for. I just changed from Novolog to FIASP for my t:Flex pump and don’t want to go back to Humalog. For me, Novolog requires 50% of the amount of insulin than Humalog and FIASP requires about 85% of Novolog. I don’t want Medicare to tell me what type of insulin I can use.

Of course, if generic Humalog forces Novo to follow suit with a cheaper product, that would be a good thing. But it is unlikely that there will be a generic FIASP.


#17

Well I would certainly hope that this would happen, for all payers… because then novolog etc would have to lower their prices to be competitive (Although under the current system they instead increase their rebates, which causes their list price to raise as well)


#18

I’ve shared this before, but worth repeating in this topic

I take a GSK epilepsy med (Lamictal). I can’t use the generic. Last year my insurance removed it from their formulary and won’t supply unless I pay full price, even with doctor’s request. So now I’m buying from a Canadian pharmacy, recommended by my neurologist, that sources in Canada and other countries. Here’s the price differences -

US - full price $35,000/year
Via Canada from GSK Canada or GSK EU - $4100/year
Via Canada from GSK Turkey - $1200/year

The drug has been on the market for 20 years. You can’t convince me they still need to charge this price in the US to recoup R&D costs.


#19

That is a good illustration of what is wrong with the USA system. Behind the scenes though after rebates, your insurance had likely been paying less for the med than you can buy it for in Canada…

The people who pay cash for the meds unfortunately don’t seem to be considered a significant consideration in the market ruled by insurance here in the USA…


#20

Diabetics and epileptics should always stick together.