Grassley to Big Pharma: ‘I’m sick and tired of the blame game’
Sen. Chuck Grassley opened a hearing into the rising costs of prescription medicine on Tuesday by blasting Big Pharma, saying the skyrocketing prices are hurting Americans and that the time has come for a reckoning.
“We’ve all seen the finger pointing. Every link in the supply chain has gotten skilled at that,” said Grassley, the chairman of the Senate Finance Committee. “But, like most Americans, I’m sick and tired of the blame game. It’s time for solutions.”
Grassley’s comments were the first fireworks in what promised to be a grilling of some of the nation’s most important pharmaceutical executives about the exorbitant prices of America’s medications.
Seven drug executives were set to testify before the committee, the largest gathering in decades of pharmaceutical executives before a congressional panel. The rising costs of drugs have become a hot political issue, with President Donald Trump vowing to take action to bring down prices and lawmakers on both sides of the aisle making similar pledges.
“America has a problem with the high cost of prescription medicines,” Grassley said. “We’re all trying to understand the sticker shock that many drugs generate — especially when some of those drugs have been around for a long time.”
He said he’d heard from people who leave their prescriptions on the pharmacy counter because the meds costs too much and others who skip “doses of their prescription drugs to make them last until the next paycheck.”
“I’m not a doctor, but rationing one’s medicine doesn’t sound like a safe prescription for health and wellness,” Grassley said.
He acknowledged drug pricing is a complex issue, then said: “But I think we should all be asking: Should it be so complex?
“We cannot allow anyone to hide behind the current complexities to shield the true cost of a drug,” he said. “And, we shouldn’t turn a blind eye to industry practices that thwart the laws and regulations designed to promote competition and generic drug entry in the market.”
Grassley, a Republican from Iowa, wrote an opinion piece that published Tuesday in the Des Moines Register. He said he wanted answers to a simple question: “Why do prescription drug prices keep rising?”
Sen. Ron Wyden, the ranking member of the committee, called soaring drug prices “morally repugnant” and he derided the pharmaceutical executives in attendance as conducting business in an “unacceptable” way.
“Drug prices are astronomically high because that’s where pharmaceutical companies and their investors want them,” said Wyden, a Democrat from Oregon.
Grassley and Wyden last week began an investigation into insulin prices, sending letters to leading manufacturers Eli Lilly, Novo Nordisk and Sanofi about their recent price increases of up to 500%.
At the start of the hearing, Wyden said he was present decades ago when tobacco executives were called before Congress to explain themselves. “They lied that day,” Wyden said. “This chairman and I expect better than that today.”
Sanofi CEO Olivier Brandicourt was among the executives on hand for the hearing. In prepared remarks, Brandicourt was set to tell lawmakers that “there is no single root cause to the problems of rising patient out-of-pocket costs” and that it’s time to “take a comprehensive look at what is driving rising costs for patients.”
“Affordability of medicines is a real and growing challenge for too many Americans,” Brandicourt said, according to a transcript of his prepared remarks released ahead of the hearing. “We understand the anger of patients who cannot afford the medicines they or their loved ones need due to rising out-of-pocket drug costs.”
Other executives called to testify include Richard A. Gonzalez, chairman and CEO of AbbVie; Pascal Soriot, executive director and CEO of AstraZeneca; Giovanni Caforio, chairman and CEO of Bristol-Myers Squibb; Jennifer Taubert, chairman and executive vice president of Johnson & Johnson; Kenneth C. Frazier, chairman and CEO of Merck; and Albert Bourla, CEO of Pfizer.
Each company has had at least one of their drugs climb dramatically in price in recent years, resulting in significant profits for the companies.
More than 650 products have seen price hikes this year, through early February, according to Rx Savings Solutions, which sells software to employers and insurers to reduce drug costs. The industry justifies the moves as essential for investing in research and development. Drug makers often point out they see very little of the increases because of the big rebates they distribute to others in the supply chain, including insurers and pharmacy benefit managers, who in turn blame pharma for setting high list prices.
Among cost-saving ideas from the Trump administration, one suggests setting the reimbursement level for certain drugs administered in doctors’ offices and hospital outpatient centers based on their cost in other countries, which typically pay far less. The so-called International Pricing Index model has already faced blowback from many quarters, including some Republican lawmakers.
Democrats have begun pushing a plan to allow the government to directly negotiate the prices of Medicare prescription drugs, saying such a move could save billions of dollars. The pharmaceutical industry has long resisted such a change.
Pfizer CEO Bourla said his company was committed to reform, but that “any reform should apply to all market segments as this will also lead to further reduction in list prices.”
“We will work with other leaders in the healthcare sector to advance these reforms, and we’re committed to lowering list prices if the rebate rule applies to the commercial market,” Bourla said in his prepared remarks.