Many ques­tions, few an­swers in Sen­ate hear­ing on opaque US drug pric­ing sys­tem

The Sen­ate Health, Ed­u­ca­tion, La­bor & Pen­sions com­mit­tee on Tues­day dis­cussed with rep­re­sen­ta­tives of the phar­ma­ceu­ti­cal sup­ply chain how the drug de­liv­ery sys­tem af­fects what pa­tients pay.

Al­though none of the com­ments and ar­gu­ments for re­duc­ing the price of phar­ma­ceu­ti­cals were new, pan­elists and sen­a­tors even seemed to dis­agree on what ex­act­ly is caus­ing prices in the US to be so much high­er than the rest of the world.

Lori Reil­ly

Mark Mer­ritt, pres­i­dent of the Phar­ma­ceu­ti­cal Care Man­age­ment As­so­ci­a­tion, point­ed his fin­ger at phar­ma­ceu­ti­cal man­u­fac­tur­ers, while PhRMA’s EVP Lori Reil­ly point­ed to hos­pi­tals, PBMs and in­sur­ance plans.

Mark Mer­ritt

The hear­ing al­so in­clud­ed tes­ti­mo­ny from As­so­ci­a­tion for Ac­ces­si­ble Med­i­cines (AAM and for­mer­ly the Gener­ic Phar­ma­ceu­ti­cal As­so­ci­a­tion), the Health­care Dis­tri­b­u­tion Al­liance and the Amer­i­can Phar­ma­cists As­so­ci­a­tion, though most of the ques­tions were di­rect­ed at PhRMA.

Re­bates, Im­ports and More Ne­go­ti­a­tion?

Lamar Alexan­der (R-TN) ques­tioned the pan­el on why re­bates are nec­es­sary and whether they can be re­moved to sim­pli­fy the sys­tem.

Mer­ritt told Alexan­der, “We would be OK with that,” and even PhRMA’s Reil­ly said that would be one op­tion, though she not­ed that PBMs and health plans would be op­posed to such a move.

Alexan­der al­so float­ed the idea of al­low­ing drugs to be im­port­ed from oth­er coun­tries with cheap­er prices, to in­crease US com­pe­ti­tion, though all the wit­ness­es said they op­pose the use of im­ports to low­er prices.

Oth­er sen­a­tors took is­sue with the com­pli­cat­ed drug pay­ment sys­tem and sup­ply chain, though sug­gest­ed changes brought up by both De­moc­rats and Re­pub­li­cans were not well re­ceived by the pan­elists.

Tam­my Bald­win (D-WI) sug­gest­ed more trans­paren­cy on phar­ma­ceu­ti­cal com­pa­nies and re­search and de­vel­op­ment spend­ing, which Reil­ly said is nec­es­sary for the en­tire sup­ply chain.

Bill Cas­sidy (R-LA) sin­gled out price in­creas­es for cer­tain med­i­cines, such as in­sulins, that oc­cur near the end of a com­pa­ny’s mo­nop­oly, though Reil­ly coun­tered that the in­creas­es are meant to help boost com­pa­nies’ bot­tom lines so they can in­vest in de­vel­op­ing the next gen­er­a­tion of med­i­cines.

Eliz­a­beth War­ren (D-MA) brought up the fact that phar­ma­ceu­ti­cal com­pa­nies’ mo­nop­o­lies on cer­tain drugs can de­crease ac­cess be­cause the prices are so high and she ques­tioned Reil­ly on whether the US gov­ern­ment should be al­lowed to fur­ther ne­go­ti­ate drug prices (as Pres­i­dent Don­ald Trump has sug­gest­ed).

But Reil­ly said that any fur­ther gov­ern­ment ne­go­ti­a­tion would be con­sid­ered “price con­trols,” and al­though every oth­er coun­try in the world us­es price con­trols, Reil­ly said oth­er coun­tries lack the ac­cess to in­no­v­a­tive med­i­cines that Amer­i­cans en­joy.

Al Franken (D-MN) ques­tioned the pan­elists on why Amer­i­cans pay more than near­ly any oth­er coun­try for med­i­cines and Reil­ly said that mak­ing oth­er coun­tries pay more might low­er costs in the US, though it’s un­clear how that would work.

First pub­lished here. Reg­u­la­to­ry Fo­cus is the flag­ship on­line pub­li­ca­tion of the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety (RAPS), the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care and re­lat­ed prod­ucts, in­clud­ing med­ical de­vices, phar­ma­ceu­ti­cals, bi­o­log­ics and nu­tri­tion­al prod­ucts. Email for more in­for­ma­tion.


Zachary Brennan

managing editor, RAPS

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