Seven drug executives head to Capitol Hill tomorrow for a much-anticipated hearing on the booming costs of prescription drugs in the United States. It’s the largest panel of pharmaceutical CEOs in decades to sit before a congressional committee, so expect sharp confrontations and pointed questions from lawmakers about why these companies have hiked the price of their medicines so dramatically.
The companies that will be represented at the Senate Finance Committee hearing certainly aren't the only one responsible for big price increases over the last two decades. But the list prices on many of their top-selling medications have drawn ire on and off Capitol Hill, prompting vows by President Trump and top committee leaders in Congress -- including top Finance Chairman Chuck Grassley (R-Iowa) and the committee's top Democrat Ron Wyden (D-Ore.) -- to investigate and intervene.
The last thing these executives want to hear from lawmakers is any reference to what they regard as government price fixing, either through a Medicare experiment promised by Health and Human Services Secretary Alex Azar or a more drastic policy pushed by Democrats to allow the government to directly negotiate the prices of Medicare prescription drugs.
So as the executives are confronted by the lawmakers, they may stress a need for better policies to promote "biosimilar" drugs (drugs that closely mirror already approved medicines) as a way of introducing more competition. Here are the executives who will sit before the Finance Committee – and some specific prescription drugs they could be asked to defend:
—Albert Bourla, CEO of Pfizer
You've probably seen television ads for Lyrica — a medication for nerve pain used by patients with fibromyalgia, diabetes and spinal cord injuries. Its list price -- now around $650 for a bottle of 90 pills -- has increased 163 percent since 2012.
Pfizer has been allowed to sell the medication exclusively since 2004, and last year was granted an additional six months of exclusivity after getting the drug approved to treat seizures in kids. That got the attention of Wyden, who wrote to the company in December, demanding an explanation of how much money Lyrica generates and why the company says more price increases are necessary.
—Richard Gonzalez, CEO of AbbVie
There's one massively profitable drug Gonzalez likely will be asked to defend, and that is AbbVie's Humira. The arthritis drug, which comprises 63 percent of the company's net revenues, has more than doubled in price over the last six years, from about $19,000 annually in 2012 to more than $38,000 now. AbbVie raised Humira's price another 6.2 percent last month.
Lawmakers have increasingly singled out Humira and Lyrica as prime examples of unreasonable price hikes. Now-House Oversight Chair Elijah Cummings (D-Md.) named them as the two top-selling drugs with the steepest price increases for 2017 in a May 2018 report from committee Democrats on drug prices in the first year of the Trump administration.
—Pascal Soriot, CEO of AstraZeneca
The high cholesterol drug Crestor, also named in the Democratic report, is an example of how makers of branded drugs will often increase prices right before a generic competitor is introduced. Crestor cost about $300 in 2016 but has undergone several price hikes since then, including a 15 percent increase right before a generic version came out.
—Kenneth Frazier, CEO of Merck
Merck has taken great pains with its public image, announcing last year it would cut list prices by at least 10 percent for several of its drugs and promising the net price of its medicines wouldn't grow faster than inflation. Yet, as the Wall Street Journal has noted, the company hasn't lowered prices for some of its top-selling drugs, including its immunotherapy cancer drug Keytruda (whose list price is $13,500 per month) and Januvia, a non-insulin drug that helps lower the blood sugar of Type 2 diabetic patients.
—Olivier Brandicourt, CEO of Sanofi
Insulin -- a drug that's essential to the survival of diabetic patients, particularly those with Type 1 diabetes -- is getting increasing attention in the cost debate, considering prices for this medication have skyrocketed by more than 500 percent in some cases. Sanofi will be the only one of the big three insulin makers represented at the hearing, so Brandicourt is likely to get a lot of targeted questions.
Sanofi increased the price for its long-acting insulin, Lantus, 77 percent from 2013 to 2019, Grassley and Wyden wrote in a letter to the company on Friday announcing a bipartisan investigation into insulin prices. The lawmakers also noted that the price of two widely used short-acting insulins -- Eli Lilly's Humalog and Novo Nordisk's Novolog -- increased 585 percent and 87 percent, respectively, during the same time period.
“These hardships can lead to serious medical complications that are entirely preventable and completely unacceptable for the world’s wealthiest country,” the senators wrote. “In addition, the increased price of insulin has caused federal programs to pay more for diabetes care…When one insulin product costs the taxpayer more than a billion dollars in one year, the American people ought to know how the company prices its product."
—Giovanni Caforio, CEO of Bristol-Myers Squibb
Lawmakers could raise concerns about Bristol-Myers Squibb's acquisition of Celgene, which would mark one of the largest ever pharmaceutical mergers. Under the deal, Bristol-Myers Squibb would gain access to several cancer drugs, including the multiple myeloma treatment Revlimid. Revlimid's price has risen 79 percent since 2012.
—Jennifer Taubert, executive vice president of Janssen Pharmaceuticals owned by Johnson & Johnson (CEO Alex Gorsky was invited but won’t be present)
Johnson & Johnson is one of the companies that drew negative attention by announcing a number of price hikes around the beginning of the year. Some of the company's best-selling products -- including blood thinner Xarelto, psoriasis treatment Stelara and Zytiga, a prostate cancer drug -- will be subject to price increases.
And Janssen Pharmaceuticals, owned by Johnson & Johnson, was crafting a strategy last year to change the size of tablets for a blood-cancer drug called Imbruvica that typically costs $148,000 annually. The new pricing scheme would ensure taking lower doses wouldn't save patients money or cut into Janssen's revenue, as my colleague Carolyn Johnson reported.
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AHH: The pharmaceutical companies testifying before Congress are spending big on lawyers and strategic communications experts "who specialize in teaching unpopular corporate figures how to survive a Capitol Hill grilling," Stat News's Lev Facher and Nicholas Florko report.
"STAT spoke with more than a dozen corporate lobbyists, lawyers, and public relations consultants who laid out the extensive preparations that go into avoiding a cable-news catastrophe," Lev and Nicholas write. "Their advice’s central themes: appear contrite and willing to work with lawmakers. Remain humble, even with senators who attack your compensation or lifestyle. And even in the face of aggressive questioning, never — never! — push back with force."
“It’s a dark and elaborate art, preparing an executive for this kind of setting,” Matt Herrington, a partner at the Washington law firm Steptoe & Johnson, told Lev and Nicholas. He said the strategy hinges on “being appropriately deferential and not a soundbite.“
OOF: The Department of Health and Human Services won’t provide witnesses for a scheduled hearing on the administration’s handling of children crossing the border into the United States.
In a statement, the agency said House Democrats failed to provide enough time to prepare ahead of Wednesday’s hearing before the House Appropriations subcommittee on Labor, Health and Human Services, Education and Related Agencies, The Hill’s Peter Sullivan reports.
“Their request did not adhere to the longstanding two-week notification precedent and did not provide adequate time to prepare the witnesses for testimony,” agency spokeswoman Caitlin Oakley said. “HHS has worked to be responsive to the Subcommittee’s request and has offered alternative hearing dates and alternative witnesses. Unfortunately, the Subcommittee rejected those offerings.”
Subpanel chairwoman Rep. Rosa DeLauro (D-Conn.) wanted Scott Lloyd, ex-director of the Office of Refugee Resettlement, and Steven Wagner, who was the acting assistant secretary for the agency’s administration for children and families to testify, and said the agency offered alternatives who were not involved in the family separation policy, Peter writes.
"Those are the people who need to be questioned, not the officials who were brought in afterwards to clean up their mess after thousands of children were separated from their families,” DeLauro said in a statement.
OUCH: Over the weekend, Food and Drug Administration Commissioner Scott Gottlieb sought to “set the record straight” on vaccine-related misperceptions that are leading to decreasing vaccination rates.
In a series of tweets, he detailed how vaccines work, described some common side effects as well as serious reactions, and described the MMR vaccination for mumps, measles and rubella that’s at the center of debate as a measles outbreak has sprung up in several states across the country.
In today’s #FDA #SundayTweetorial I want to set the record straight on some common misperceptions about vaccines that are contributing to declining vaccination rates and putting vulnerable populations at risk of serious disease. The fact is, #Vaccineswork and they are safe. pic.twitter.com/xvya0y6EdG— Scott Gottlieb, M.D. (@SGottliebFDA) February 24, 2019
Why the MMR vaccine? Measles is not a childhood right-of-passage but a feared and extremely contagious malady. Measles is caused by an airborne virus and is so contagious that if one person has it, 9 out of 10 people exposed and unvaccinated will get it https://t.co/PQfoYfUSXo.— Scott Gottlieb, M.D. (@SGottliebFDA) February 24, 2019
“So far in 2019, there are 64 confirmed cases there, the CDC says,” he tweeted. “This is an avoidable tragedy.” Last week, he suggested the federal government would intervene if states continued to allow vaccine exemptions.
Referring to the recent measles outbreak, Gottlieb told CNN, “some states are engaging in such wide exemptions that they're creating the opportunity for outbreaks on a scale that is going to have national implications."
— The Trump administration issued a final rule to block groups that provide abortions or abortion referrals from receiving federal funding, a move expected to direct millions in federal family planning funds away from groups like Planned Parenthood and toward faith-based and antiabortion rights groups.
The rule, which is expected to be challenged in court, means federally funded clinics that receive money under Title X can no longer refer a patient for an abortion, our Post colleague Ariana Eunjung Cha reports. The clinics must also maintain a “clear physical and financial separation” between government-funded services and organizations providing abortion and abortion referrals. The Title X program provides family planning services to low-income people.
"The changes, which opponents vowed to challenge, were celebrated by social conservatives who oppose abortion and helped elect President Trump," Ariana writes. "Health and Human Services Department officials have said they were necessary to ensure transparency and the legal and ethical use of taxpayer funds."
Antiabortion group Susan B. Anthony List President Marjorie Dannenfelser said the rule represents “decisive action to disentangle taxpayers from the big abortion industry led by Planned Parenthood.”
"Critics, including 15 governors and the American Medical Association, decried the change as a 'gag rule' that would undermine the physician-patient relationship and threatened legal action to block it from taking effect," Ariana writes. "They have also described it as an indirect way to defund Planned Parenthood, which has long been a target of antiabortion activists as the nation’s largest provider of reproductive care services."
Numerous states have already threatened to sue the administration over the rule.
From California Attorney General Xavier Becerra (D):
We stand ready to take any and all legal action to protect women’s health and rights. If the Administration cared about #womenshealth, it would hear the thousands of voices opposing the #TitleX rule that interferes in women’s medical decisions & access to care. #NoGagRule pic.twitter.com/wASOvCtWnx— Xavier Becerra (@AGBecerra) February 22, 2019
Pennsylvania Attorney General Josh Shapiro (D):
#BREAKING— AG Josh Shapiro (@PAAttorneyGen) February 22, 2019
@HHSGov is moving to enact @POTUS' latest attempt to gut family planning programs like @PPFA & get in between women their doctors.
This is #unacceptable & I'll be putting the full weight of my Office behind challenging this attack.
From New York Attorney General Letitia James (D):
These new rules are dangerous & unnecessary.— NY AG James (@NewYorkStateAG) February 22, 2019
New York will not stand by as this administration puts New Yorkers' & millions of Americans at risk.
We will take legal action.
And while some Democratic lawmakers have weighed in, vowing to fight the rule, Politico’s Alice Miranda Ollstein writes “when it comes to the new Title X rule, Democrats’ options to stop the administration are extremely limited.”
“The rule will be challenged in court, and precedent is on the Trump administration’s side,” she writes. “The Supreme Court upheld similar funding restrictions in 1991, but they were never fully enacted before the Clinton administration rescinded them the following year… House Democrats could try to redirect Title X funds to Planned Parenthood and abortion clinics through an annual appropriations bill, but the Republican majority in the Senate has signaled they will reject those efforts and President Donald Trump has already vowed a veto.”
— Wyoming is one step closer to implementing work requirements for Medicaid beneficiaries. After it seemed like it would fail, a bill to implement work requirements advanced in the state’s House.
The bill was failed a standing vote on Friday, but narrowly passed, 30 to 28 when a roll call was taken after the standing vote, the Casper Star Tribune’s Nick Reynold’s reports.
The bill would mandate “able-boded” Medicaid recipients to work at least 20-hours a week or get locked out of their Medicaid coverage for six months if they fail to meet the requirement, Nick reports.
“However, the phrase ‘able-bodied,’ some argued, is ill-defined under the language of the bill, and that the burden of proof that someone was actually meeting their eligibility requirements would be difficult to produce – a real risk when the bill contains a provision to ‘lock out’ violators from receiving Medicaid coverage for six months,” he writes.
Another bill in Wyoming to establish work requirements failed last year in the state House.
— And here are a few more good reads:
- The Senate Finance Committee holds a drug pricing hearing on Tuesday.
- The House Energy and Commerce Subcommittee on Oversight and Investigations holds a hearing on the current measles outbreak in the United States on Wednesday.
- The House Education and Labor Subcommittee on Workforce Protections holds a hearing on health care and social service workers and workplace violence on Wednesday.
- The House Appropriations Subcommittee on Labor, Health and Human Services and Related Agencies holds a hearing on the administration's unaccompanied children program.
- Rep. Greg Walden (R-Ore.) is scheduled to speak at an American Enterprise Institute event on the evolving opioid crisis on Wednesday.
- The Atlantic holds an event on health care and the new Congress on Wednesday.
- The House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related Agencies holds a hearing on female veterans access to VA on Thursday.
- The Alliance for Health Policy holds a briefing on Capitol Hill on biosimilars on Thursday.
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