On Tuesday morning, executives from seven pharmaceutical companies will face the Senate Committee on Finance for round two of a hearing on drug pricing.
Chairman Chuck Grassley and Ranking Member Ron Wyden are expected to ask CEOs from AstraZeneca, Bristol-Myers Squibb, Merck, Pfizer and others how they set drug prices and what can be done about rising costs, as they did in a letter Friday to the manufacturers of insulin.
"The probe is part of the committee's broader effort to examine drug pricing in the United States and rising costs for consumers and taxpayers," Grassley said by statement.
Drug prices are seen as one of the biggest reasons for rising healthcare costs. Prescription drugs are the number one utilized health insurance benefit by plan members, outpacing their doctor visits.
There's been a lot of finger pointing as to who is to blame.
Don't be confused by the pharmaceutical companies talking about the money being returned as discounts or rebates or the amount going to middlemen, said Matt Eyles, CEO and president of AHIP.
"Ultimately, we would like to see legislation that would cover the entire market on price transparency," Eyles said. "In advance of taking a price increase, what the level would be."
There were a lot of price increases on January 1, he said, asking, what this just because the calendar year rolled from one year into another?
"How are they justifying that?" Eyles said.
The American Hospital Association's Erik Rasmussen, vice president, Government Affairs, said, "The problem is the drug company sets the price as high as they can get away with. That's why they're going to get the scrutiny they deserve."
On January 29, the Finance Committee held a hearing on drug pricing without the big pharmaceutical companies present. At that hearing, witness Kathy Sego testified that her son began rationing treatment due to the monthly $1,700 cost of insulin.
On Friday, Grassley and Wyden began a bipartisan investigation into insulin prices, by sending letters to leading manufacturers Eli Lilly, Novo Nordisk and Sanofi.
Grassley said they wanted information regarding price increases of up to 500 percent or more for products that have been on the market for close to 100 years. They want to know the processes used to determine list prices and those that lead to net prices resulting from negotiations with pharmacy benefit managers and large commercial plans.
The letters also request information about the cost of research and development, production, marketing and advertising, revenues and gross margins from selling insulin.
The price of Eli Lilly's Humalog increased from $35 to $234 between 2001 and 2015, a 585 percent increase, according to Grassley. The price of Novo Nordisk's Novolog increased from $289 to $540 between 2013 and 2019, an approximately 87 percent increase. The price of Sanofi's Lantus increased from $244 to $431 between 2013 and 2019, an approximately 77 percent increase.
Olivier Brandicourt, CEO of Sanofi, will be at Tuesday's hearing, which starts at 10:15 a.m.
Also scheduled to testify are Richard A. Gonzalez, chairman and CEO of AbbVie; Pascal Soriot, executive director and CEO of AstraZeneca; Giovanni Caforio, chairman of the board and CEO of Bristol-Myers Squibb; Jennifer Taubert, executive vice president, Worldwide Chairman of Janssen Pharmaceuticals Johnson & Johnson; Kenneth Frazier, chairman and CEO of Merck & Co.; and Albert Bourla, CEO of Pfizer.
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