For years, drugmakers and PBMs have tussled over who's to blame for high drug prices. That didn’t change Tuesday when a congressional committee hauled in executives from insulin makers Sanofi, Eli Lilly and Novo Nordisk as well as from pharmacy benefit managers CVS, Express Scripts and Optum.
Going forward, though, one thing will change, several lawmakers told the pharma and PBM executives. The “status quo is not going to continue,” Rep. Joe Kennedy said. “It can’t.”
That remains to be seen, but at a Wednesday hearing, members of the House Committee on Energy and Commerce highlighted some of the reasons for making that promise. Patients are rationing insulin because they can't afford it, the lawmakers pointed out, and some of those patients are dying.
When it came to ideas for change, though, the discussion was less clear-cut. It ranged over topics familiar after years of debate over high drug prices. The drugmakers said their net prices have fallen as the rebates they pay PBMs have mushroomed, while the PBMs argued their negotiations save health systems money.
They did agree on one thing: Each executive said no patient should have to suffer due to high drug prices.
Lawmakers asked whether PBMs should collect flat fees for processing prescriptions instead of compensation based on list prices. How about removing rebates from the equation, or quashing formulary exclusivity, or both? Should the government set prices for insulin, they wondered? And why do insulin products cost so much when the basic drug itself has been around for nearly 100 years?
For her part, Rep. Jan Schakowsky didn't have questions for the executives but simply wondered “how you people sleep at night.”
“You’re in trouble,” Schakowsky said during the hearing. “The lobbyists … need to understand that this is a commitment” to bring down drug prices.
“If you think you can out-talk us without any transparency, without any accountability, I just want you to know your days are numbered,” she said.
As the hearing neared its conclusion, Rep. Buddy Carter, Congress’ only pharmacist, congratulated the executives for creating a bipartisan moment during the hearing, then turned to fire his questions and criticism at the PBM execs. The current drug system will face changes, he promised
Wednesday’s meeting follows another high-profile hearing in Congress with top executives of seven pharmaceutical companies. It also follows year upon year of growing scrutiny of drug prices. During the 2018 election, the issue topped voters’ concerns, one of the lawmakers pointed out on Wednesday. And it obviously shows no sign of going away.
Outside of Congress, the Trump administration has been working to lower prices through a variety of measures, including one that came up at the Wednesday confab: a proposal, first raised in February, to end drug rebates in federal health programs. Congress could expand that plan to commercial insurance, and Department of Health and Human Services Secretary Alex Azar quickly urged lawmakers to do just that. PBMs have hit back at that idea, while drugmakers say they support it.
Other government efforts to fight high costs include moves to boost competition, encourage more negotiation and lower out-of-pocket costs.
After the hearing, Credit Suisse analyst Vamil Divan wrote to investors that his team doesn't "believe the hearing materially changes the course of the US drug pricing debate." Still, the team expects "continued hearings and debate on the topic going forward, with the possibility of real reform to the rebate system for Medicare Part D still expected by Jan 1, 2020."
Drugmakers themselves have made some moves to make drugs more affordable for patients. Eli Lilly, for instance, rolled out an authorized generic to its basal insulin Humalog at a 50% discount, while Sanofi on Wednesday expanded an insulin access program to supply all its insulin products for a flat rate of $99 per month.