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Senate Committee Grills Biopharma Executives on Drug Pricing

Posted 26 February 2019 | By Zachary Brennan 

Senate Committee Grills Biopharma Executives on Drug Pricing

Seven biopharmaceutical company executives were in the hot seat on Tuesday taking largely uncontroversial questions from members of the Senate Finance Committee in the second of four hearings on drug prices.

Kicking off the hearing, Committee Chair Chuck Grassley (R-IA) set the stage for how list prices that biopharma companies set would be the focus of the hearing.

“For seniors on Medicare Part D, for people with high deductible plans, the list prices are meaningful,” Grassley said. “We’ve all seen the skilled finger pointing but for most Americans, we’re tired of the blame game and it’s time for solutions.”

Sen. Ron Wyden (D-WA) similarly took issue with the “astronomically high” drug prices. “Today we’ll hear about miracle cures, but it’s morally repugnant that Americans can’t afford cures.”

In the executives’ opening statements, meanwhile, many stressed the importance of value-based pricing agreements and their companies’ investments in research and development (R&D).

Pfizer CEO Albert Bourla put the value proposition simply: “If our medicines do not produce good results, we should be paid less, if they do, we should be paid more.”

Others, such as Sanofi CEO Olivier Brandicourt, offered support to try to help a drug pricing system that has often been criticized for its opacity.

“I understand the anger about rising out of pocket costs. I appreciate the confusion about why prices continue to rise — the situation is unacceptable and unsustainable,” Brandicourt said.

And when pressed on the issue of transparency, nearly all seven of the executives said they would support congressional legislation to require advance warnings on price increases. They also expressed near-unanimous support for the CREATES Act, which is aimed at addressing tactics used by branded drugmakers to delay generic competition, such as restrictive distribution arrangements that prevent generic drugmakers from purchasing the samples needed to conduct bioequivalence testing.

The only heated moments of the hearing involved questions targeted at AbbVie CEO Richard Gonzalez regarding his company’s mega-blockbuster Humira (adalimumab).

Sen. Debbie Stabenow (D-MI) questioned Gonzalez on why his company does not offer the same Humira price in the US as they do in Europe, particularly as the main patent on Humira expired in 2016.

Gonzalez countered that Humira “plays an important role in the funding of AbbVie's R&D.”

Similarly, Sen. John Cornyn (R-TX) questioned Gonzalez on Humira’s patent thicket blocking biosimilar competition in the US. Gonzalez responded that the patents covered in Humira’s portfolio are tied to specific innovations that the company created and that the company has settled with and given a license to every potential biosimilar so far, except one (Boehringer Ingelheim).

And while the executives tried to not deflect too much or point their fingers at others in the pharmaceutical supply chain, such as pharmacy benefit managers or health insurers, none of the executives offered substantial solutions to bring down the list prices of pharmaceuticals in the US.

Several executives, such as AstraZeneca CEO Pascal Soriot, mentioned the idea that list prices could come down if rebates were eliminated.

And in the closing moments, Wyden dug in on the fact that no commitments were made by the executives to lower list prices. He requested that each executive state in writing whether their list prices will come down if rebates go away.

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