In a few hours’ time pharma CEOs will be cross-examined by US Senators in a hearing that could be a watershed moment for the drug pricing debate in the US.
The Senate Finance Committee hearing on the issue gets underway at 10:15 in Washington D.C. (15:15 UK time, 16:15 in Europe) and will see the CEOs from AbbVie, AstraZeneca, Bristol-Myers Squibb, Merck & Co, Pfizer, and Sanofi (plus the head of J&J’s pharma division) debate drug prices with lawmakers at a time when major legislative reform seems to be looming.
Having most of big pharma’s CEOs grilled in Washington is an unprecedented situation, but only came about after the committee threatened to use its powers to compel them after they had all declined to appear at an earlier hearing.
Senator Chuck Grassley
The chair of the committee, Republican Charles Grassley, is a long-time critic of pharma pricing policies, so the questions are likely to be combative and focus on why drug prices in the US are the highest in the world. Analyst Jeff Jonas of Gabelli Funds told Reuters: “I don’t think any actual policy is going to be implemented, but I think the rhetoric is going to be an overhang.”
The pharma CEOs are expected to try to strike a balance between contrition over the issue, whilst pointing to the benefits of their products and the cost of their development and the role of profit-taking by ‘middlemen’ in the supply chain such as pharmacy benefit managers in keeping prices high.
Grassley has however already warned them against trying to pass the buck, tweeting yesterday that this hearing is about what the companies can do to lower costs for patients and taxpayers.
It’s notable also that the biggest companies in the industry are in the hot seat on this occasion, as earlier congressional investigations have tended to focus on outlier incidents such as Martin Shkreli’s former company Turing Pharma racking up the price of an old antibiotic and Mylan with its steep price increases for EpiPen, a life-saving treatment for severe allergic reactions.
The hearing comes against the backdrop of a recent probe into insulin pricing introduced by Grassley and his Democrat counterpart on the committee, Ron Wyden, as well as President Trump’s ‘blueprint’ on medicine pricing. Wyden tweeted yesterday that drug companies have been getting away with “highway robbery” on insulin pricing.
Trump’s blueprint contains some fairly unpalatable elements for the drug industry, most notably a plan to tie some Medicare drug payments to lower prices charged for medicines in a reference group of overseas markets, and banning drug rebates between pharma companies and PBMs.
Meanwhile, with the 2020 presidential race starting to move up a gear there is a concern among drug industry executives that pricing will once again become a hotly-contested political issues, as it was in the 2016 campaign.
There’s no question drug pricing is a topic that is front and centre for many in the pharma industry, with a survey last month suggesting that more than half (51%) of industry respondents thought that pricing will have the greatest negative impact on the sector this year.