WASHINGTON — Drug makers and their middlemen counterparts spent the first three months of the 116th Congress successfully dodging hard blows from members of Congress over the high cost of prescription drugs. That all changed Wednesday.

Insulin makers and drug industry middlemen faced hours of hard questions Wednesday from an irate panel of lawmakers, many of whom appeared far more interested in threatening to blow up the entire drug pricing system than in hearing from the pharma company or pharmacy benefit manager executives who testified.

“I don’t know how you people sleep at night,” Rep. Jan Schakowsky (D-Ill.) told the assembled panel. “You’re in trouble … if you think you can just out talk us without any transparency, without any accountability, I just want you to know your days are numbered.”


Wednesday’s hearing, held by the oversight arm of the Energy & Commerce Committee, began with an admonition from the committee’s chair, Rep. Diana DeGette (D-Colo.), that witnesses — which included Eli Lilly, Novo Nordisk (NVO), Sanofi (SNY), Cigna’s Express Scripts, United Healthcare’s Optum, and CVS (CVS) — should focus on finding solutions, and not finger pointing. Within minutes, that pretense went out the window.

The drama began with a seemingly benign, albeit contentious, question: Why do list prices keep increasing? The insulin makers pointed at the PBMs, the PBMs pointed at the drug makers. And those answers, it seemed, were the breaking point.

For the next three hours, Democratic lawmakers in particular hammered drug makers and PBMs with questions, accusations, and screeds. Republicans volleyed their own, slightly tempered attacks. No one rose to defend either industry.

And the threats from powerful lawmakers about reworking the entire system rang out the loudest of all.

Chairman Frank Pallone (D-N.J.) told the panel that his constituents want Congress to begin setting list prices.

“I’m reluctant to do that because I believe in a market-based system, but this is what I hear,” Pallone added.

PBMs, too, were not immune from the threats.

“Just to get the lobbyists in the room to shudder a little bit, I think the PBMs should be utilities, or converted to nonprofits, or something,” Rep. John Sarbanes (D-Md.) said.

Each of the executives came armed with data point after data point to make the case that they are working to ensure insulin is affordable — highlighting everything from patient assistance and charity programs to data showing net prices for insulins keep dropping. But lawmakers were unconvinced.

When Eli Lilly Senior Vice President Mike Mason tried to point to the fact that his company had launched a half-priced authorized generic version of its insulin Humalog, Rep. Joe Kennedy (D-Mass.) retorted: “So it took 15 years and global outcry on this to do it?”

Sanofi’s announcement, made just hours before the hearing, that it would cap insulin prices for patients, was similarly met with contempt.

Time after time, irate lawmakers cut off the executives, visibly exasperated.

Exactly what legislation the committee might pursue, however, is less clear. Neither lawmakers nor the witnesses testifying brought up clear solutions. And even DeGette acknowledged some of the bolder ideas — like having Congress directly set drug prices — were more rhetorical than actionable.

“You should look at some of those statements as real expressions of frustration,” she told STAT, when asked how seriously industry should take some of lawmakers’ more sweeping threats.

DeGette and Rep. Tom Reed (R-N.Y.), in their roles as chairs of the Congressional Diabetes Caucus, put out a slew of bipartisan legislative ideas late last year, which could serve as a blueprint for legislation to pursue this Congress.

The ideas, which include requiring insulin makers to disclose how they set their list price and linking what patients pay out of pocket to negotiated drug prices rather than sticker prices, however, are a far cry from government price setting, or regulating PBMs out of business.

DeGette, who hopes to have concrete progress on insulin affordability “in July or in September,” told reporters she remains “100 percent” sure any solution on insulin affordability will have bipartisan support.

And while Republicans seemed less intent on Wednesday to throw knockout punches at drug makers, or their PBM counterparts, they too appeared intent on doing something on the issue.

“I want to congratulate all of you because you have done something here today that we have been trying to do in Congress,” said Rep. Buddy Carter (R-Ga.) “And that is to create bipartisanship.”

“This,” he added, “is going to end.”

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  • A simple start: mandate that any advertising of any drug must prominently display the LIST PRICE throughout the ad.

    No “discount” price, no “we can help” nonsense – just the “MSRP” equivalent, the price that is the cost to the payer, whether that payer is an insurer, the government, the patient, a charity, a discounter, or any combination of these.

    Free-market advocates insist that the market will solve this. Fine. Let the market work. But the market has to know what the costs are, and the public usually is blind to these costs because they are not out-of-pocket.

    If Humira costs $6,500 per month, or $13,000 per month, say so. Out loud, so we can hear it.

  • A very simple start would be to give Medicare the right (and duty) to negotiate pricing just like any fiscally responsible authority. Isn’t that the basic right and tenet of Capitalism?

    • “A very simple start would be to give Medicare the right (and duty) to negotiate pricing just like any fiscally responsible authority. Isn’t that the basic right and tenet of Capitalism?” No. First off – since when is Government Negotiation a basic right and tenet of Capitalism?, Secondly, “government negotiation” is an oxymoron – the government doesn’t “negotiate” … it dictates (and this dictation already exists in FSS and Medicaid with guaranteed price ceilings among many other aspects of FSS and Medicaid and “the Big 4”).

    • No. Government negotiation is not dictation. Contracting happens all the time, and prices are negotiated. And medicare isn’t allowed to negotiate price due to Medicare part d. I mean we should just stop paying social security and medicare/medicaid anyway. If people can’t take care of themselves thats their problem. Right?

    • The US Healthcare system is a complex thing – and any “simple” solution will likely be both damaging and ineffectual – Single payer is not the answer in this country if one hopes to keep innovation, choice, and quality.

    • Simple answer for your simple solution of single payer – no. Bad idea if one wants to keep healthcare innovation and choice along with a variety of other positive aspects of the present, albeit imperfect system

    • Yeah. Single payer would fail here. Look at the UK and Canada. See their failing economies? No one from the UK ever invented anything anyway.

  • It is a travesty what we struggle to pay for drugs that are orders of magnitude cheaper in Canada and Mexico. Insulin is 10x more expensive here. PBMs should be non-profits and our drug prices should be in-line with other developed countries.

    • The pharmaceutical industry in this country, and the system in general, subsidizes the ‘other developed countries’ so to the extent one cares about innovation – removing the reward for risk taking on the part of R&D efforts will likely have negative downstream effects. Regarding your call for PBMs to be non-profits – since when is non-profit a synonym for “efficient” or “altruistic”? There are a number of instances where non-profits in all sectors have been guilty of financial mismanagement – including in the healthcare sector (BCBS is non-profit for example and I know of a few BCBS plans where they were “non-profit” but “retained earnings” were found to be used by executives for perks and by the organization for “lavish” sales, marketing, and executive meetings. Finally, according to CMS NHE data for 2017, retail Rx drugs accounted for 10% of the total US healthcare expenditure of $3.5 trillion. Hospital care accounted for 33%, and Physician and clinical services 20% – both greater cost drivers than drug spend. Generics account for 90% of the Rx. Though I know this article is focused on Drugs and the drug distribution system – the hew and cry and hand-wringing of congress and others is largely an exercise in grandstanding while majoring in minors. Is the US healthcare system perfect? No – but if you want to fix what is wrong with it, a good place to start is where most of the money is being spent – and it’s not in the pharma delivery and supply chain. As with any large group – there are good and bad actors in pharma – and there are plenty of good people focused on patient health. Likewise there are plenty of good people in the supply chain focused on member health – continued attempts to beat them down and blame them for working in and responding to the healthcare system as created by US government statutes and regulatory interpretations are misguided and wrong.

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