The nation's capital is abuzz as Big Pharma CEOs rehearse their testimony for Tuesday's big drug-pricing hearing. What to expect? High political theater, for one thing, as Republicans and Democrats both take their shots.
But don't dismiss the event as mere grandstanding, analysts say. Senators on the dais have introduced pricing bills and launched investigations, and the Trump administration seems willing to participate in a crackdown. Plus, every D.C. media outlet will be covering it—zeroing in on the most dramatic exchanges, of course—and those TV news feeds and mainstream media headlines will hit Americans already miffed about their prescription costs and suspicious of the industry.
To help you study up, we've gathered some hints about what you'll see Tuesday, a window or two into the behind-the-scenes action, and some news and ideas about what comes next. Have your own thoughts? Let us know. We might add them to the mix.
The executives scheduled to appear before the Senate Finance Committee are six CEOs, representing AbbVie, AstraZeneca, Bristol-Myers Squibb, Merck, Pfizer and Sanofi, and one worldwide pharma chairman, Jennifer Taubert of Johnson & Johnson. Heading up the interrogation team are committee chair Sen. Charles Grassley, an Iowa Republican and perennial pharma critic, and Sen. Ron Wyden, ranking Democrat and author of at least one of the new bills aimed at drug pricing. Wyden, incidentally, took to Twitter to shame drugmakers into sending their top executives after some initial, er, reluctance on their part.
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The fact that so many Big Pharma chiefs had to answer the call to testify is a sign that pharma's influence is on the wane in Washington, Bloomberg posits. After years of drug-pricing scandals, accusatory presidential tweets, public consternation—read: voter consternation—about rising out-of-pocket costs, lawmakers are more willing than ever to go after the drug industry. Republicans included. PhRMA has been on the back foot ever since Medicare Part D changes blindsided the industry a couple years ago, the news service's sources say, and now the industry lobby and its biotech counterpart BIO are scrambling to come up with industry-friendly proposals that might answer the big political question—what to do about drug prices. Bloomberg article
More bad news: Politico likened these hearings to public turning points in other industries, namely Big Tobacco. “It’s finally pharma’s turn,” Chris Jennings, who worked on health policy in the Clinton and Obama White Houses, told the pub. And if lawmakers don't do something after making such a big deal out of calling these executives to account, then voters are likely to think Congress will never act—not a good look with 2020 elections already getting into gear. Analysis
The companies know it, too, and they've put PR, legal and lobbying experts on the job to prep their executives for the hearings, Politico notes. Think presidential debate prep, but for CEOs who aren't necessarily adept at playing politics. Expect them to try to seem contrite while talking up their lifesaving products, Politico's sources said, while Stat quoted a lawyer who focuses on just this sort of prep. The idea is to be “appropriately deferential and not a soundbite,” he said, adding, “Do you want Lester Holt talking about you tonight?” Article
After gathering some intel of his own on the Hill, Wells Fargo analyst David Maris, who's been sounding the alarm about pricing action in DC for months if not years, said he expects the hearings to be "focused, pointed and just the start of a vigorous dialog" that'll yield more demands for info and more hearings. And note this: The chair and ranking members of other Congressional committees may be at odds, but Grassley and Wyden "are not adversarial," Maris points out. In fact, they have "a good working relationship on this topic," Maris says—which means a united offense during the hearings. He's not on board with the Big Tobacco comparison, though. "Likening an industry that saves lives to one that allegedly hid the deadly dangers of its products seems way off base to us, but we believe it reflects the extreme sentiment surrounding the issue," he wrote.
Sanofi CEO Olivier Brandicourt won't go into the hearing room without some idea of the questions he'll face about rising insulin prices. Grassley and Wyden launched an investigation Friday with letters to the French drugmaker and its two fellow insulin giants, Eli Lilly and Novo Nordisk, demanding information on the subject. Five pages' worth of questions, in fact. And Brandicourt was no doubt already prepping for the prospect; he's the only one of the three to testify at a time when the price hikes have spurred lawsuits, investigations and public outcry. Letter (PDF)
As if to provide study notes for executive testimony—and senatorial questioning—The New York Times' editorial board put together a list of queries drugmakers need to answer. Among them are they usual R&D spending, price-setting questions, but also this: What's a fair margin for a lifesaving drug? And our personal favorite: Why would any drug need 100 patents? Editorial
Here's something for the There is Nothing New Under the Sun file: This is far from the first time multinational drugmakers have been called onto the Congressional carpet. Every decade or so, history repeats itself. And as NPR reports, some hearings 60 years ago covered the very same ground we can expect to trace Tuesday, from rising prices to patent abuse to overenthusiastic marketing. Some of the same players showed up, too. Merck's then-president John Connor said his piece then, just as Merck CEO Ken Frazier will this time. Article
Interested in what, exactly, pharma executives have faced—and said—during those past hearings? Here are some highlights, courtesy of Kaiser Health News.
Finally, One positive for the on-the-spot executives? They'll have the venue to themselves, giving them a chance to throw as much shade as possible onto the pharmacy benefits managers whose demands for rebates and discounts pharma blames for driving prices higher, Bloomberg notes. The Trump administration is on board with that idea; just witness HHS Secretary Alex Azar's moves to nix rebates in federal health plans—and subsequently urged Congress to do the same for commercial insurance.