On Tuesday, the Senate Finance Committee held a much-anticipated hearing, Drug Pricing in America: A Prescription for Change, Part II, during which lawmakers grilled top executives from major pharmaceutical companies—including AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson's Janssen Pharmaceuticals unit, Merck, Pfizer, and Sanofi—on their pricing and business practices.
The hearing was the second in a series focused on the addressing the issue of high prescription drugs costs, and Finance Committee Chairman Chuck Grassley (R-IA) made it clear in his opening remarks that he has seen too much finger-pointing by the various links in the drug supply chain: “I'm sick and tired of the blame game. It's time for solutions,” he told the witnesses.
Despite Chairman Grassley’s tough stance, however, the industry leaders deflected blame for their list prices to insurance companies, indicating that they are forced to set prices higher in order to cover large rebates paid to insurance companies and pharmacy benefit managers (PBMs). They proposed that the answer to more affordable prices at the pharmacy counter does not lie in government price controls on drugs or Medicare negotiation of drug prices, but in eliminating rebates entirely—not just in Medicare and Medicaid, as recently proposed by the Trump administration, but also for commercial health insurance—to lower the costs for consumers. The Trump administration’s proposal would create new legal safe harbors for discounts given directly to patients purchasing drugs at the pharmacy, as well as for fixed-fee agreements between manufacturers and PBMs.
The high cost of prescription drug prices is a priority of the new Congress, with Democrats and Republicans, as well as the Trump administration, all proposing solutions, such as permitting prescription drug importation from Canada, further Medicare Part D negotiations, setting international reference pricing, and reducing barriers to competition.
More information on the hearing, including witness statements and video of the proceedings, can be found on the Senate Finance website.