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Analysis

What to Expect at the Senate Drug Pricing Hearing

By Jack O'Brien  
   February 25, 2019

Tuesday's highly anticipated Senate Finance Committee hearing on drug pricing will feature the CEOs of all seven major drug manufacturers.

At the Senate Finance Committee hearing on prescription drug pricing last month, none of the invited leaders of the major prescription drug companies appeared before the committee.

However, the CEOs of AbbVie Inc., AstraZeneca, Bristol-Myers Squibb Co., Johnson & Johnson, Merck & Co., Inc., Pfizer, and Sanofi will publicly testify Tuesday about the high cost of prescription drugs in America.  

Committee Chairman Sen. Chuck Grassley, R-Iowa, was visibly agitated by the collective no-show last month and Ranking Member Sen. Ron Wyden, D-Ore., tweeted out his invitation soon after with the caveat that the leaders would appear before the committee "one way or another."

Lowering the cost of high prescription drugs has become an unexpected bipartisan lightning rod on Capitol Hill, galvanizing support in both chambers of Congress as well as turning into one of the Trump administration's primary healthcare missions. 

This comes at a time when the pharmaceutical industry has dealt with growing opposition and criticism in Washington, D.C., as longtime industry supporter Orrin Hatch retired from the Senate this year, replaced by equally longtime critic Chuck Grassley, while industry-friendly Democrats like Sen. Cory Booker have sustained critiques for being too cozy with the lobby.   

Tuesday's hearing will be an early indication of how the new Congress plans to pursue action to effectively lower drug prices and what roles the pharmaceutical manufacturers see themselves playing in the process going forward.

The blame game

Earlier this month, HHS announced a proposal to eliminate PBM rebates, which received a divided reaction among industry players but earned praise from the Pharmaceutical Research and Manufacturers of America (PhRMA). 

Some have seen pharmaceutical companies following a strategy of passing the blame for higher drug prices to other involved players, such as PBMs or the health insurers. It's to be expected that this line of defense will appear during Tuesday's hearing, as drugmakers pin the responsibility for high drug prices on the rebate proposal insurance executives oppose. 

In a recent statement to The Washington Post, Sanofi argued that savings are not always passed down to patients "in the form of lower co-pays or insurance." Additionally, a PhRMA spokesperson said the status quo in drug pricing needed to change but urged the need to "address the right problem."

Related: Drug Pricing Proposals Put Pharma at Greater Financial Risk

Now, focus shifts to what pharmaceutical executives will do to assist in the fight towards reducing the heightening financial burden placed on American consumers seeking to get their prescriptions filled.

President Trump called on drugmakers to list the prices of medicines in television ads as a way to promote price transparency, which was heeded by Johnson & Johnson earlier this month after industry-wide hesitation.

Chris Jennings, a former health policy adviser in the Clinton and Obama administrations, emphasizing the importance of Tuesday's hearing by telling Politico Monday that it's "finally pharma's turn."

Related: Drug Pricing is Secretive. Fix That First.

Shared goals, differing approaches

Late last week, Grassley and Wyden initiated an investigation of the three major insulin producers, looking into information related to substantial price increases.

But while both Republicans and Democrats have expressed a common interest in reducing prescription drug prices, the favored tactics between the two sides remain near polar opposites.

Earlier this month, Democrats unveiled a bill which would allow Medicare to directly negotiate drug prices, a move not broadly supported by Republicans on Capitol Hill. 

During his second State of the Union address, Trump expressed a desire to end "global freeloading" of prescription drugs, a signal of support for Grassley's drug importation bill. This is a stance that has traditionally been shot down by Senate Republicans but has earned the endorsement of a sitting president and one of the most influential senators in the chamber.

Related: Sen. Chuck Grassley Backs Drug Importation Bill

Trump's focus on ending "global freeloading" also earned public praise from his two top health officials, HHS Secretary Alex Azar and CMS Administrator Seema Verma.

Despite the Trump administration's repeated calls for action on the pharmaceutical industry and tough stance on PBMs for their role as "middlemen" in the equation, Democrats have roundly stated that the efforts have not gone far enough to adequately address the issue.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: WASHINGTON - JULY 18: A sign at the entrance to a Senate Finance Committee hearing room in Washington, DC on July 18, 2017. The United States Senate is the upper chamber of the United States Congress. - Image / Editorial credit: Katherine Welles / Shutter


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