Senate Finance Committee Grills Drug Executives on Rising Prices, Criticizes Them For Terrible Pract

Yesterday, on February 26th, the Senate Finance Committee held a second hearing on rising prescription drug costs. During the three hour hearing, Senators attacked the drug company executives for their immoral and anticompetitive business practices, told moving stories of patients who could not afford medicines, and dismissed attempts to shift the blame.

The witnesses at the hearing were the CEOs of seven of the world's most important and powerful pharmaceutical manufacturers. They were Richard Gonzalez of AbbVie, Pascal Soriot of AstraZeneca, Giovanni Caforio of Bristol-Myers Squibb, Jennifer Taubert of Johnson & Johnson, Kenneth Frazier of Merck & Co., Albert Bourla of Pfizer, and Oliver Brandicourt of Sanofi.

Senator Chuck Grassley (R-IA) opened by saying that America has a problem with high prescription drug prices, that a balance can be struck between innovation and affordability, and that the Committee was here to discuss solutions. He and Senator Wyden have launched a bipartisan investigation into the high price of insulin. Drug pricing, he remarked, is a complex issue, but we cannot allow anyone to hide their bad behavior behind that complexity. Secretary Alex Azar, FDA Commissioner Scott Gottlieb, and other experts have identified anticompetitive practices such as withholding samples, pay for delay agreements, product hopping, and rebate walls that delay access to affordable drugs and that should be prohibited.

Senator Ron Wyden (D-OR) delivered a blistering attack on the assembled CEOs. He bluntly said that drugs did not become outrageously high by accident, and that drug prices are high because that is where pharmaceutical companies and their executives want them. It is outrageous that patients are being forced to ration their medicine or choose between paying for prescription drugs and paying for food and rent.

Wyden especially criticized AbbVie for raising the price of its arthritis medication Humira, the top selling drug in the country (which has risen from $19,000 to $38,000 over six years). "Can patients opt for a less expensive alternative?" he demanded. "They can't, because AbbVie protects the exclusivity of Humira like Gollum with his ring!" Humira has used a great many patents on every stage of Humira's development to create a 'patent thicket' that thwarts competition and enables the company to charge whatever it chooses.

The executives attempted to shift the blame for rising costs, but Wyden refused to let them off the hook. "I have said for years," he remarked, "that PBMs [pharmacy benefit managers] are wasteful and secretive. They will have their day before this Committee too. But PBMs don't set list prices. Manufacturers do." And list prices are directly tied to the amounts patients pay out of pocket.

Other Senators pointed out that much of the medical research and development is subsidized by taxpayers. Senator Debbie Stabenow (D-MI) criticized AbbVie's patent shenanigans to keep Humira's prices high, and observed that funding from the National Institutes of Health (NIH) contributed to all of the 210 new drugs approved by the Food and Drug Administration between 2010 and 2016. And American taxpayers contributed over $200 billion in grants to these companies! Senator John Cornyn (R-TX) asked AbbVie why it had 136 patents on Humira, and if it was their position that they should have an exclusive monopoly on the drug for thirty one years. Richard Gonzalez of AbbVie tried to evade the question, and claimed that the patents were really for several different drugs (which is nonsense).

However, there were several missed opportunities where Senators asked questions but were unable to follow up. Partly this was due to the time limits-each Committee member had only five minutes for questions and answers. Still, while this hearing was an excellent step forward, much work remains to be done on drug prices.

We look forward to the next Senate Finance Committee hearing on prescription drug costs, and urge the Committee to examine different areas and actors of this issue in detail.