7 frente "drug costs and potential policy solutions"...

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On Tuesday, February 26, 2019, the Senate Finance Committee held a hearing on drug costs and potential policy solutions to bring prices down. 

The hearing, second in a series, featured testimony from CEOs from seven drug companies including

• AbbVie,   
• AstraZeneca,  
• Bristol-Myers Squibb,  
• Johnson & Johnson,  
• Merck,  
• Pfizer, and  
• Sanofi.

Opening Statements

During opening statements, Committee Chairman Chuck Grassley cited the Constitutional responsibility Congress has to be a check on the prices Americans are paying for their products and alluded to a belief that the pharmaceutical industry had lost the balance between innovation incentives and affordable prices. He called for increased transparency in the drug supply chain and said that the system should not be so complex that any one player could hide behind complexities to shield high costs.

Committee Ranking Member Ron Wyden used the bulk of his opening statement to call out testifying companies by name, citing to actions they had taken to raise prices and referring to “two-faced scheming.” He too mentioned the ongoing argument that it isn’t the pharmaceutical companies that are raising the prices, but instead, rising prices are a result of another link in the supply chain. He closed his relatively combative opening statement by saying, 
“Your profits are outsized compared to others in the industry, you receive a massive portion of your revenue from American taxpayers, and you bear none of the consequences of high drug prices. It’s past time to get beyond the excuses and make prescription drugs affordable.”

Witness Statements

As is typical in hearings like this, each executive had the chance to give a brief statement of their own before the back and forth questioning began.


AbbVie Inc.: Richard Gonzalez

Gonzalez testified that AbbVie had spent $50 billion in R&D since 2013 and that while there was no one-size-fits-all solution to high drug costs, Medicare Part D may be an area to target, including high out of pocket costs based on list prices and not reflecting rebates.

AstraZeneca: Pascal Soriot

Soriot also mentioned his company’s R&D amounts in his testimony, including $6 billion in 2018 alone. When discussing his ideas for reducing drug prices, he called for a move away from the current rebate system, stating it is not sustainable, but that eliminating rebates in the Medicare and commercial markets would allow his company to lower list prices. He pointed to value-based pricing as having the potential to transform how drugs are priced. He also mentioned biosimilar competition, noting that biosimilars gained 85 percent of the market share in Europe where fewer anticompetitive and commercial barriers exist.

Bristol-Myers Squibb: Giovanni Caforio, M.D.

Caforio defended his company in his statement, noting that the average net pricing of his company increased five percent or less in the last few years and that prices did not increase at all in 2018, and that 2019 would not likely see increases either. He expressed his support for the rebate reform rule from the Trump Administration, greater use of generics, and value-based purchasing agreements.

Johnson & Johnson: Jennifer Taubert

Taubert reported that J&J spent $8.4 billion on R&D in 2018, far exceeding what was spent in marketing. She also stated her belief that innovative drugs help lower overall health costs by keeping people healthier and reducing hospitalizations, and called drug list prices a “starting point” in negotiations. She posited that it is the increased enrollment in health plans that required consumers to pay more for prescriptions that created many of the rising prices and came up with some possible solutions.

Merck: Kenneth Frazier

Frazier reported an investment of $10 billion in R&D last year as well as $5 billion in capital investments in the United States over the last couple of years. He explained his belief that the current market incentives favor products with higher list prices and that the solutions to rising drug prices lies in encouraging a viable biosimilar market in the United States, among other things.

Pfizer: Albert Bourla, DVM, Ph.D.

Bourla focused on rebates, reporting that the company paid $12 billion in rebates last year, and proposed passing all rebates on to patients via a transparent system. In addition to other solutions, he asked Congress to reduce barriers to biosimilar competition.

Sanofi: Dr. Olivier Brandicourt, M.D.

Brandicourt touched on the gap in prices with Sanofi last year, with a 4.6 percent increase in prices last year compared to the 8 percent decline in net price. He used insulin as an example of the growing divide between list and net prices, noting that list prices alone will not be sufficient to lower out-of-pocket costs for patients.(Más)