There’s no doubt members of Congress will aggressively grill pharmaceutical executives in today’s landmark hearing on spiking drug prices in the United States.
What will be fascinating is how the drugmakers try to defend actions that many have called indefensible.
“There is no story I think they can tell that would justify the price increases they’ve been doing,” said Gerard Anderson, professor of health policy and management at Johns Hopkins University, who advised the Senate Finance Committee as its leaders organized the hearing.
The seven executives on the panel — from Sanofi, AstraZeneca, Bristol-Myers Squibb, Pfizer, AbbVie, Merck and Janssen (owned by Johnson & Johnson) — will probably recite common industry arguments. They’ll point to the costs of research and development. They’ll argue companies don’t pocket all of a drug’s list price because of rebates they return to pharmacy middlemen. They’ll blame these pharmacy benefit managers and insurers for not doing more to shelter customers from out-of-pocket costs.
“On average, 40 percent of the list price of medicines is given as rebates or discounts to other entities in the supply chain,” Holly Campbell, deputy vice president for public affairs at Pharmaceutical Research and Manufacturers of America, wrote in an email to reporters yesterday. “Health insurers are shifting more costs onto patients through deductibles, increased use of coinsurance and the use of four or more tiers for prescription medicines.”
But it’s one thing for the industry to defend large price tags attached to entirely new “breakthrough” drugs, which cost companies many hundreds of millions of dollars to bring to market. It’s another to defend seemingly arbitrary price hikes on drugs used for decades with little or no improvements to how these medicines work.
Senators will probably focus on these longstanding, widely used drugs in their queries to the witnesses. Expect lots of questions about insulin, which is used by 7.4 million Americans with diabetes. Between 2001 and 2015, Eli Lilly, Novo Nordisk and Sanofi increased prices for their insulins Humalog, Novolog and Lantus by 585 percent, 87 percent and 77 percent, respectively.
I hope the drug co CEOs testifying tmrw don't try to blame everyone but themselves/take no responsibility for their role in fixing the problem We already understand there are other factors to consider Tmrw is abt the part drug cos can do to lower costs for patients taxpayers— ChuckGrassley (@ChuckGrassley) February 25, 2019
The price ppl pay for Rx drugs is complex covered in secrecy There's plenty of room for transparency improvement at every part of the supply chain b4 drugs reach patients That's why we are having a series of hrgs on the issue in the Finance Cmte Tmrw is the 2nd this Congress— ChuckGrassley (@ChuckGrassley) February 25, 2019
Director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh:
Companies will point to recent slowing of list price growth to say they've heard complaints and doing something about it - ✔️taking responsibility.— Walid Gellad (@walidgellad) February 25, 2019
They will point to their support of passing rebates to patients. ✔️What they can do to help https://t.co/tdByFVtNOk
Prices for insulin and other injectable drugs have risen even faster than for oral medicines. The costs of oral drugs increased 9.2 percent from 2008 to 2016 while the costs of injectable drugs grew 15.1 percent during the same time period, according to a study published last month in the journal Health Affairs.
That same study found that decisions by the makers of brand-name drugs to raise prices are the primary reason for the increase in U.S. drug prices, not the expensive new therapies or improvements in existing medications. For critics of the industry, the answer is simple: Drugmakers raise prices because there’s no one stopping them.
“It was the little drug companies that had one or two drugs, and they raised the price dramatically,” Anderson said. “The investment bankers said to Pfizer, ‘Well, if they can do it, why can’t you?’ ”
Other players along the drug supply chain will be watching with delight today as the pharmaceutical industry gets its turn under the harsh Hill spotlight. They’re not exactly getting a free pass — recall that last month the Trump administration angered pharmacy benefit managers (known as PBMs) by proposing to ban the rebates they get from drug companies — but for now, they’re happy to be sitting on the sidelines.
“I think it will be really important for the CEO of Sanofi to explain what happened with insulin prices over the past decade,” said Matt Eyles, president of America’s Health Insurance Plans. “What is so fundamentally different today that enabled that price increase to transpire — I don’t know that any of us have heard a great explanation from the industry as to why that happened.”
Shawn Martin, senior vice president for advocacy at the American Academy of Family Physicians, said he’s also watching for drugmakers to be forced to explain massive cost spikes for drugs that were approved by the Food and Drug Administration decades ago.
“It’s not necessarily the blockbuster or the orphan drugs for rare diseases,” Martin said. “It’s the products that have three-, four-, five-decade life spans that have seen significant increases in costs.”
There’s nothing the rest of the health-care industry — insurers, PBMs and providers — would like more than for drugmakers to be cornered on the issue of high list prices. List prices aren’t typically the final prices paid by pharmacies and insurers to sell and cover a drug when the complicated system of rebates and discounts is taken into account. But players all along the supply chain have been blamed for creating the whole complicated system that allows drugmakers to push list prices ever higher.
“I think you’ll see a lot of magician tricks to get away from the fact that they set the list price,” said Erik Rasmussen, vice president of government affairs for the American Hospital Association.
|You are reading The Health 202, our must-read newsletter on health policy.|
|Not a regular subscriber?|
AHH: Washington state Attorney General Bob Ferguson announced he will file a lawsuit against the Trump administration's latest rule targeting groups like Planned Parenthood.
It’s the first lawsuit in what is sure to be a slew of legal challenges from Democratic-led states over the final rule issued Friday by the administration to bar groups getting federal family planning funding from providing abortions or abortion referrals. The National Family Planning and Reproductive Health Association announced a separate lawsuit yesterday over the same issue.
The Washington state Democratic attorney general called the rule a "transparent attack on Planned Parenthood" and charged it could limit access to medical care for low-income women in certain regions. “Rural communities currently have a shortage of health care providers,” Ferguson said at a news conference “This rule will make the shortage even more acute.”
Ferguson said he would file the suit as soon as the rule is published to the federal register, the Seattle Times’s David Gutman reports.
“We will not allow the federal government to dictate what a provider can or cannot say to a patient,” Ferguson said. “This case is about placing a political ideology, about placing politicians in the room when doctors and patients are discussing health-care options. That is unacceptable.”
OOF: The Food and Drug Administration wants to take a closer look at whether prescription opioids are actually effective in alleviating chronic pain and will now require drugmakers to study their effectiveness.
There’s little current conclusive and controlled research on opioid effectiveness, our Post colleagues Lenny Bernstein and Laurie McGinley report. They write some studies suggest opioids can be ineffective for treating pain after 12 weeks, and experts warn about the risks of addiction with long-term use.
“We are going to impose a mandate on existing products . . . to answer the question that people have been posing for years: whether you have declining efficacy, and whether that declining efficacy can lead to addiction,” Gottlieb told our colleagues.
“The FDA acquired the authority to demand the effectiveness research in a section of the Support for Patients and Communities Act, passed in October,” Lenny and Laurie write. “Previously, Gottlieb said, the FDA could order only safety studies of drugs on the market, but the new power allows for effectiveness studies as well.”
But one longtime critic panned the move, saying the FDA has the research it needs to act. “That’s exactly what the FDA said to us in 2013,” Andrew Kolodny, director of Physicians for Responsible Opioid Prescribing, told our colleagues. "Five years later, we don’t have the studies, and another FDA commissioner says, ‘We’re going to do the studies.’ ”
OUCH: Vaccine critics are facing a backlash amid the resurgence of a measles outbreak across the nation.
It's coming from lawmakers in the District of Columbia who are investigating vaccine misinformation and the recent outbreaks, holding bipartisan hearings in the House and the Senate this week. It’s also coming from the states, where lawmakers are introducing measures to make it more difficult for parents to avoid vaccinating their children, our Post colleague Lena H. Sun reports.
In Washington state, even amid some anti-vaccination sentiment there, two measures are moving with bipartisan support through the legislature to prohibit parents from using personal or philosophical exemptions to avoid immunizing their school-age children. “In Arizona, Iowa and Minnesota, lawmakers have for the first time introduced similar measures,” Lena writes. “In Vermont, legislators are trying to do away with the state’s religious exemption four years after eliminating the philosophical exemption. In New Jersey, where lawmakers have sought unsuccessfully to tighten religious exemptions, a bill to repeal it entirely was recently amended on the General Assembly floor.”
“[T]here is a growing consensus for state authorities to make the bold move to require all children to be vaccinated, with the only exception being those who cannot be given the vaccine for medical reasons,” Diane Peterson, of the Minnesota nonprofit Immunization Action Coalition, told Lena.
— The Senate fell short of the votes needed to advance a bill to punish physicians who don’t provide medical care to children born alive after an attempted abortion. In a final vote of 53 in favor and 44 opposed, all but three Democrats voted against a procedural motion on the Born-Alive Abortion Survivors Protection Act, our Post colleagues Mike DeBonis and Felicia Sonmez report. The bill needed 60 votes to advance.
The bill, written by Sen. Ben Sasse (R-Neb.), sought to require doctors to “exercise the same degree of professional skill, care, and diligence to preserve the life and health of the child” as they would to “any other child born alive at the same gestational age.”
“I want to ask each and every one of my colleagues whether or not we’re okay with infanticide,” Sasse said on the Senate floor yesterday. “Are we a country that protects babies that are alive, born outside the womb after having survived a botched abortion?”
Republicans tried to advance the measure after Virginia Gov. Ralph Northam (D) defended a failed bill that sought to loosen restrictions on abortions late in pregnancy and New York Gov. Andrew Cuomo (D) signed a new law decriminalizing the death of a fetus if a pregnant woman is assaulted and making it easier to obtain a late-term abortion. Abortion rights supporters argued Sasse’s bill is meant to “dissuade doctors from performing late-term abortions in the first place.”
“We must call out today’s vote for what it is: a direct attack on women’s health and rights,” Leana Wen, president of the Planned Parenthood Federation of America, said in a statement. “This legislation is based on lies and a misinformation campaign, aimed at shaming women and criminalizing doctors for a practice that doesn’t exist in medicine or reality.”
Republicans charged that by opposing the bill, Democrats were implicitly condoning that infants born alive after attempted abortions shouldn't get medical care. This kind of procedure is relatively rare, however, and the GOP-led vote was a political move designed to get Democrats on the record.
Trump advanced that messaging in tweets last night:
Senate Democrats just voted against legislation to prevent the killing of newborn infant children. The Democrat position on abortion is now so extreme that they don’t mind executing babies AFTER birth....— Donald J. Trump (@realDonaldTrump) February 26, 2019
....This will be remembered as one of the most shocking votes in the history of Congress. If there is one thing we should all agree on, it’s protecting the lives of innocent babies.— Donald J. Trump (@realDonaldTrump) February 26, 2019
— Democratic lawmakers are moving quickly to advance gun-control legislation, something they promised to do after the midterm election.
This week, House Democrats are set to pass a bipartisan bill requiring federal background checks on all gun sales, Politico’s John Bresnahan reports. They’ve also scheduled a vote on a measure to extend the federal background check deadline from three to 20 business days, which John writes is meant to “close the ‘Charleston Loophole,’ which allowed white supremacist Dylann Roof, who killed nine African-Americans at the Emanuel AME Church in Charleston, S.C., in 2015, to buy a gun despite pending felony drug charges against him.”
The fates of these bills in the Republican-controlled Senate is questionable, and both the National Rifle Association and President Trump himself oppose them. But the quick movement on the legislation is notable following Democrats' campaign promises and victory in retaking control of the House, John writes.
Still, divide remains. Just five House Republicans have backed the universal background checks bill. House Minority Whip Steve Scalise (R-La.), who was injured in a shooting at a congressional baseball game in June 2017, is one of the lawwmakers against the bill.
— Meanwhile in New York, House Minority Leader Nancy Pelosi (D-Calif.) attended the signing of a bill that will prevent people from buying or possessing firearms if they show signs of being a threat to themselves or others.
New York Gov. Andrew Cuomo (D) signed the bill after the state legislature easily passed the measure last month. The Red Flag Bill is the first such measure in the nation to authorize family members, teachers and school officials to seek court intervention to stop someone from possessing or owning a gun.
"Today New York is proud to pass the first-in-the-nation Red Flag Bill that empowers school teachers to do something when they believe something bad is going to happen,” Cuomo said at the signing. “We are empowering teachers, not by giving them guns, like the president wants, but by arming and empowering them with the law, so when a teacher or family member sees there is a problem, they can go to a judge and get a court-ordered evaluation.”
— An overwhelming majority of American voters want Congress to address health-care costs, according to a new poll published by Morning Consult.
Adults say they are more likely to vote for a representative in the next election if they take action to bring down health-care costs, the poll found. And 91 percent of adults say it’s important for their representative to do something about health-care costs. And the poll found a majority of people across gender, age, income and party lines also say it's important for their member of Congress to address health-care costs.
The poll also found there is wide opposition to the Affordable Care Act's health care taxes, with adults six times more likely to oppose the health insurance tax than support it, four times more likely to oppose the ACA's medical device tax than support it and three times more likely to oppose the "Cadillac Tax" on high-cost health plans than support it.
— Sen. Charles E. Grassley (R-Iowa) announced the Senate Finance Committee will probe tax-exempt nonprofit hospitals. In a letter to the commissioner of the Internal Revenue Service, Grassley refers to the requirement that these hospitals “must meet a statutory community benefit standard requiring them to make contributions to their surrounding communities.”
“Unfortunately, according to reports, it appears that at least some of these tax-exempt hospitals have cut charity care, despite increased revenue, calling into question their compliance with the standards set by Congress,” Grassley wrote. The letter references a 2017 story from Politico’s Dan Diamond detailing how hospitals boosted their revenue at the same time they cut back on charity care.
The chairman's letter called on the IRS to provide information about its enforcement system, including information about how many hospitals have been reviewed to ensure compliance with standards.
— And here are a few more good reads:
- The Senate Finance Committee holds a drug pricing hearing.
- 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 on Wednesday.
- 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.
President Trump says he asked China to 'criminalize' sale of fentanyl into U.S.:
The Fact Checker's Glenn Kessler explains it doesn't work when politicians often use differing "baselines" to project favorable policy outcomes: