Senate Finance Committee

Yesterday – Tuesday 26th February – saw senators grilling CEOs of no less than seven pharma-giants on high prescription drug prices that are a burden on Medicare, Medicaid and millions of Americans – but what exactly was learnt, and will there be any tangible changes such as price cuts?

Law makers sat down at a hearing of the Senate Finance Committee for three hours and condemned the pharma companies of putting profits before patients. However the pharmaceutical company leaders acknowledging that their prices were high, began deferring blame onto the government, insurance companies and middlemen known as pharmacy benefit managers.

The pharma leaders  also evidenced their multibillion-dollar investments in research and development as a defence, and additionally highlighted advances in treatments for cancer, hepatitis C, schizophrenia and other autoimmune diseases.

Alongside AstraZeneca, which makes the cholesterol drug Crestor, other companies represented at the hearing were AbbVie, maker of Humira for rheumatoid arthritis and other immune-system conditions; Bristol-Myers Squibb, maker of the blood thinner Eliquis;  Merck, maker of Januvia to treat diabetes; Johnson & Johnson, maker of Xarelto to prevent blood clots; Pfizer, maker of Lyrica for nerve pain; and Sanofi, a leading manufacturer of insulin, including the Lantus brand.

AbbVie came under strong fire in the questioning, with Democrat senator Ron Wyden attacking the company’s ‘price gouging’ and ‘patent thicket’ tactics.

He delineated how the company had doubled the price of a year’s supply of Humira (adalimumab) from $19,000 to $38,000 from over a period of six years, and compared AbbVie to the creature Gollum in Lord of the Rings, whose mind had been completely overtaken and corrupted by his obsession for an all powerful ring.

“Can the patients opt for a less expensive alternative? They can’t, because AbbVie protects the exclusivity of Humira like Gollum with his ring. Thick cobwebs of patents and shadowy deals with drugmakers, all of them are in place to keep the cash flowing.” said Wyden.

Furthermore the committee highlighted how Humira – which generates $18bn a year in sales for AbbVie – costs 40% less on average in France and Germany.

Unlike past years in which the American media would target ‘acting’ individuals, such as former pharma executive Martin Shkreli, who raised the price of a decades-old infection treatment by more than 5,000 percent, Chairman Charles Grassley said he is not interested in ‘scapegoating’ but he alongside congress aims to respond to these drug prices in a ‘measured and effective’ way.

Having laid blame onto ‘pharmacy benefit managers’ or the middlemen, some of the pharma companies insisted they support the Trump administration’s proposal to change the current system in which drug prices are set using secret rebates negotiated by these pharmacy benefit managers.

Oliver Brandicourt, CEO of Sanofi, said: “We want these rebates, which lower net prices, to benefit patients.

“Unfortunately, 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.”

His words come in spite of the fact that the list price of Sanofi’s Lantus – one of the highest priced brands of insulin – has risen from $241 in 2013 to $431 today.

There was however an agreed consensus from most of the pharmaceutical representatives that backed plans to ban rebates to insurers and instead pass them onto patients. The total sum of these rebates is estimated at $29bn.

Additionally there were calls for faster biosimilar uptakes, a cap on Medicare out of pocket payments, and support for value-based payments as potential future pricing models. It has been argued for years however that the U.S. system for pricing drugs is far too complex with the National Academy of Medicine concluding in 2017 that “it is extremely difficult, if not impossible, for outsiders to ‘follow the money.'”

Although there weren’t any definitive decisions yesterday, now very well may be the time that momentum for change in the American healthcare system gathers enough support to actually follow through with significant alterations to political and healthcare policy, ultimately benefiting patients who need it the most.