THE PROGNOSIS
Drug industry executives testify before the Senate Finance Committee. (Pablo Martinez Monsivais/AP)
Seven pharmaceutical executives sat down in a row before the Senate Finance Committee on Tuesday morning. Three hours later, they emerged from the hearing room relatively unscathed.
In the hearing on drug prices — billed as one of the biggest Congress-vs.-industry showdowns since the tobacco hearings of the 1990s — exchanges between the lawmakers and the CEOs were remarkably unremarkable.
Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking Democrat Ron Wyden (Ore.) tried to kick the hearing off energetically, both warning the executives they shouldn’t try to redirect blame to other parts of the health-care industry for skyrocketing drug prices in the United States.
“Like most Americans, I’m sick and tired of the blame game,” Grassley told the panel.
Wyden recounted the tobacco hearings. “I was there when seven Big Tobacco CEOs testified in a committee room like this one, and they lied,” he said. “The chairman and I expect better this morning.”
But while senators on the committee asked the executives a range of questions about the drug pipeline, there were few true “gotcha” moments. The witnesses frequently recited well-worn arguments for why insurers and pharmacy middlemen (called pharmacy benefit managers, or PBMs) should share more of the blame for the high cos of prescription drugs. The senators largely refrained from insisting on direct answers as to why these companies have massively inflated prices for specific medications.
Here are your Health 202 takeaways form the hearing:
1. Drugmakers were reluctant to make firm commitments to lowering list prices even under their best-case scenario.
Grassley pointed to a recent proposal from the Trump administration to ban the rebates drugmakers give to pharmacy benefit managers — an idea enthusiastically backed by the drug industry and decried by PBMs. Grassley asked the executives whether they would agree to lower their own list prices if they were freed of paying rebates.
“Should the administration finalize this rule, will you commit to lowering your drug prices?” Grassley asked.
The executives expressed openness to the idea but stressed the rebate ban should apply broadly to drugs covered in commercial plans and not just government-run programs — and hinted that insurers should still feel a responsibility to charge smaller co-payments to customers.
“If the rebates were removed from the commercial sector as well, we would definitely reduce our list prices,” AstraZeneca’s Pascal Soriot said.
Sanofi’s Olivier Brandicourt responded: “Lowering list price has to be linked to better access and affordability at the counter for the patients.”
David Mitchell, president and founder of Patients for Affordable Drugs:
2. Executives did plenty of blame-shifting.
Johnson Johnson’s Jennifer Taubert repeated several times that insurers and PBMs excel at extracting lower prices from drugmakers, insinuating they cut into the industry’s profits without necessarily passing those savings along to consumers.
“We strongly advocate for rebate reforms that would allow us to lower our list prices,” Taubert said.
Merck’s Kenneth Frazier urged the senators to “recognize the system itself is complex and it’s interdependent.” “No one company can unilaterally lower list prices without running into disadvantages that make it hard to do that,” Frazier said.
Said Soriot: “It’s one of those situations where no one can fix it by themselves.”
Wyden accused drugmakers of “stonewalling” on the key issue of list prices. “Reducing those list prices are the easiest ways for American consumers to pay less at the pharmacy counter,” he said.
Patients for Affordable Drugs executive director Ben Wakana:
3. Drugmakers expressed opposition to any type of government price-setting.
Several senators brought up the idea of an international drug price index suggested by the Trump administration for lowering what Medicare pays for prescription drugs distributed by doctors. The executives hit back against that idea, as well as a more far-reaching proposal to allow the government to directly negotiate lower prices in Medicare’s prescription drug program.
“I don’t think that would be good policy,” Brandicourt said, in response to a line of questioning from Sen. Bill Cassidy (R-La.). He added that government “price controls” wouldn’t be sufficient to make medications affordable for consumers.
Kaiser Family Foundation senior vice president Larry Levitt:
Drug makers are politically powerful because of the money they spend on lobbying and campaigns. But, they also do make products that save lives and help people, which is a compelling message, and one that the drug CEOs are leaning on heavily today.
— Larry Levitt (@larry_levitt) February 26, 2019
4. They all said they support the CREATES Act.
All the executives claimed their companies don’t try to block generic developers by withholding samples of their medications — an industry practice that would be ended by the bipartisan CREATES Act. The measure, which we’ve written about here, is a top candidate for drug pricing legislation that Congress could pass this year.
Yet, as Stat News noted, a database run by the Food and Drug Administration shows Pfizer and AstraZeneca have been accused of this very practice.
Sen. Patrick Leahy (D-Vt.):
5. Humira was the redheaded stepchild of the day.
The skyrocketing costs of insulin came up several times, but it was really Humira, AbbVie’s arthritis drug, that lawmakers chose to pummel. Humira, which is on track to the be the most profitable medication in history, now costs about $38,000 for a year’s worth of treatment.
Wyden, along with Sens. Debbie Stabenow (D-Mich.) and John Cornyn (R-Tex.), focused on Humira as a prime example of how companies price gouge consumers, noting that AbbVie has dozens of patents on the drug to protect the company’s exclusive right to produce it.
Cornyn said he supports the patent system because it incentivizes companies to invest in research and development of new drugs, but he suggested AbbVie is gaming the system to protect its monopoly on Humira much longer than should be allowed. Stabenow pressured AbbVie CEO Richard Gonzalez to admit the medicine’s chemical makeup hasn’t changed despite the company’s multiple patents.
And Wyden said the company “protects the exclusivity of Humira like Gollum with his ring.” “Thick cobwebs of patents, legal tricks and shadowy deals with other drugmakers, all to keep the cash flowing,” Wyden said.
Senators highlighted some other hearing moments:
“If lower prices would diminish RD, why don’t costly dividends? Why don’t stock buybacks?”
“What could justify arbitrary prices increases year after year, long after the RD spending is done?”
—@RonWyden on drug companies’ excuses for high costs of prescription drugs pic.twitter.com/ZZYiZMztJv
— Senate Democrats (@SenateDems) February 26, 2019
Sen. Tom Carper (D-Del.):
The Hill reporter Peter Sullivan:
Grassley tells reporters he was happy with the hearing, CEOs didn’t shift blame as much as he thought they would. Hasn’t talked to McConnell about Creates but hopes there’s momentum for it/won’t have to be marked up again
— Peter Sullivan (@PeterSullivan4) February 26, 2019
The Campaign for Sustainable Rx Pricing:
Rep. Pramila Jayapal (D-Wash.), co-chair of the Congressional Progressive Caucus. (Salwan Georges/The Washington Post)
AHH: Rep. Pramila Jayapal (D-Wash.) is expected to unveil a much-anticipated new Medicare-for-all plan later today that goes even further than what Sen. Bernie Sanders (I-Vt.) proposed in 2017, our Post colleague Jeff Stein reports in this sneak peek at the bill.
Here are some highlights from the plan, which has more than 100 House Democratic co-sponsors, and how it differs from Sanders’s Senate bill. (Jeff also reports Sanders is currently working on an update to his bill.)
- It will provide everyone no-cost medical, vision, dental and long-term care.
- It would move all Americans onto a government-run insurance plan in two years, compared with the four year phase-in in Sanders’s Senate bill.
- Similar to the Sanders bill, Jayapal’s plan would leave just a minimal role for private health insurance.
- The bill includes a proposal from Rep. Lloyd Doggett (D-Tex.) to lower drug costs by authorizing Medicare to negotiate prices and let the government issue generic licenses if negotiations fail.
- It also includes a provision for government-run long-term care for people with disabilities.
Jayapal’s bill does not specify how it would pay for the new legislation.
“We have a plan. We have a real plan,” Jayapal told reporters. “Americans are literally dying because they cannot afford insulin and can’t get the cancer treatments they need . . . I think this Medicare-for-all bill makes it clear what we mean by health care for all. We mean a complete transformation of our health-care system.”
“The bill has 106 co-sponsors but essentially no chance of passing the House or Republican-controlled Senate this term,” Jeff writes. “It comes amid a wider debate about the meaning of Medicare-for-all in Democratic policy circles, as some presidential candidates and center-left think tanks have said they support both Medicare-for-all while also aiming to preserve private insurance that currently enrolls about 150 million Americans.”
Rep. Ilhan Omar (D-Minn.):
Sen. Bill Cassidy (R-La.) weighed in on the proposal:
Unfortunately, Democrats’ so-called “Medicare for all” plan would actually mean Medicare for none. It would require taxes on families to double or triple.
— U.S. Senator Bill Cassidy, M.D. (@SenBillCassidy) February 26, 2019
OOF: Parents are disappearing from the workforce, currently making up a smaller share of the labor force in the United States than at any other point in at least a century, our Post colleague Andrew Van Dam writes.
It’s not that parents aren’t working, but that those in the workforce aren’t becoming parents, he writes. That’s where Democrats’ childcare proposals, like the one released by Sen. Elizabeth Warren (D-Mass.), could come in. “Democratic presidential candidates are targeting the substantial group of Americans who avoid having children because they can’t afford the estimated $233,610 it would take to raise a child to age 18,” he writes.
“The number of working parents isn’t falling just because parents have decided to stay home,” he continues. “Instead, it’s likely that working Americans are having fewer children or avoiding parenthood altogether. Birthrates and fertility rates, which account for the number of women of childbearing age, are at their lowest levels on record, according to the National Center for Health Statistics.”
Meanwhile, research suggests universal childcare could encourage people to have children. Andrew writes: “By removing one of the biggest obstacles for working parents, a universal child-care policy might encourage more parents to rejoin the labor force, [American University’s Gray Kimbrough] said.”
The U.S. Food and Drug Administration building is seen behind a bus stop on the agency’s campus in Silver Spring, Md. (Jacquelyn Martin/AP)
OUCH: The Food and Drug Administration is looking at new approaches to address opioid abuse, with measures such as small-quantity packaging and new research requirements for drug companies, the Wall Street Journal’s Thomas M. Burton reports.
“One step the FDA plans for 2019 is requiring the packaging of pills in small amounts, such as for a day or two of medication following surgery, to reduce the amount of drugs that can be misused or diverted to resale after being dispensed,” Thomas writes.
“The agency has been criticized from multiple directions for not having done enough to stem the pain-pill addiction epidemic, and for the ways it allegedly enabled it in the first place by approving dangerously powerful painkillers for widespread use,” he adds. The FDA has responded to criticisms by teasing further measures, such as additions to painkiller-safety programs that aim to reduce fentanyl prescriptions.
Our Post colleagues Lenny Bernstein and Laurie McGinley wrote earlier this week about the agency’s plans to require drug companies to study opioid effectiveness.
Sen. John Cornyn (R-Tex.). (AP Photo/Alex Brandon)
— After yesterday’s drug-pricing hearing, Cornyn told reporters he spoke with Senate Judiciary Committee Chairman Lindsey Graham (R-S.C.) about concerns raised during the hearing and said the panel plans to probe how drugmakers work the patent system, the Hill’s Peter Sullivan reports.
“He said he would work with me in the Judiciary Committee, which would have jurisdiction over that, to both investigate it and come up with any curative legislation, if warranted,” Cornyn said.
Rep. Elijah E. Cummings (D-Md.). (Salwan Georges/The Washington Post)
— The House Oversight Committee voted to authorize Chairman Elijah Cummings (D-Md.) to subpoena three Trump administration officials for records on the “zero tolerance” policy that led to the separation of families at the border with Mexico.
In a bipartisan 25-to-11 vote — Republican Reps. Chip Roy (Tex.) and Justin Amash (Mich.) joined the panel’s Democrats — the committee voted to subpoena Attorney General William P. Barr, Homeland Security Secretary Kirstjen Nielsen, and Health and Human Services Secretary Alex Azar for records related to the policy, our Post colleagues Felicia, Nick Miroff and Maria Sacchetti report.
“These subpoenas will be the first issued by the committee in the 116th Congress,” Cummings said. “I did not make this decision lightly. As many of you know, I have been passionate about this issue since it first became public last year, and I believe it is a true national emergency.”
HHS spokeswoman Caitlin Oakley said in a statement the agency “understands and appreciates the important role of Congressional oversight and has communicated regularly and in good faith” with the committee. She added officials “have transparently provided 792 pages of documents related to the Committee’s request and offered their staff a review of the Office of Refugee Resettlement portal at the Department.”
— At another hearing on Capitol Hill, Trump officials being grilled by members of the House Judiciary Committee acknowledged they did not speak up to supervisors despite warnings that the family separations could traumatize children, our Post colleagues Felicia, Nick and Maria report.
Jonathan White, commander of the Public Health Service Commissioned Corps and child welfare expert, told lawmakers he warned HHS officials in spring 2017 that the “zero tolerance” policy would traumatize children and inflict long-term harm. Scott Lloyd, then-director of the Office of Refugee Resettlement, the HHS agency in charge of caring for separated children, was one of the officials White warned.
But Lloyd told lawmakers yesterday that he didn’t relay those warnings.
“Did you ever say to the administration: ‘This is a bad idea’?” Rep. Jayapal asked Lloyd in one exchange. “Here’s what my child welfare experts have told us: ‘We need to stop this policy.’ Did you once say this to anybody above you?”
“I did not say those words,” Lloyd answered.
— And here are a few more good reads:
Today
- The House Energy and Commerce Subcommittee on Oversight and Investigations holds a hearing on the current measles outbreak in the United States.
- The House Education and Labor Subcommittee on Workforce Protections holds a hearing on health care and social service workers and workplace violence.
- The House Appropriations Subcommittee on Labor, Health and Human Services and Related Agencies holds a hearing on the administration’s unaccompanied children program.
- Rep. Greg Walden (R-Ore.) is scheduled to speak at an American Enterprise Institute event on the evolving opioid crisis.
- The Atlantic holds an event on health care and the new Congress.
Coming Up
- The House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related Agencies holds a hearing on female veterans access to VA on Thursday.
- The Alliance for Health Policy holds a briefing on Capitol Hill on biosimilars on Thursday.
From the Fact Checker: Did Ivanka Trump create ‘millions’ of jobs?: