Leaders Of 7 Pharmaceutical Manufacturers Face Tough Questioning On Capitol Hill

The CEOs of seven U.S. drug makers testified before the Senate Finance Committee on their pricing practices.

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The leaders of seven prescription drug manufacturers faced hours of grilling on Capitol Hill today. They defended their business practices and tried to deflect outrage over high drug prices onto other parts of the health care industry. They also agreed in principle to lower prices if the Trump administration finalizes a proposal to their liking. NPR's Alison Kodjak reports on the Senate Finance Committee hearing.

ALISON KODJAK, BYLINE: Republicans and Democrats on the committee seemed pretty fed up with the pharmaceutical industry. Drug prices are rising, and consumers are paying more at the drugstore. Committee Chairman Chuck Grassley made it clear that when it comes to drug prices, he didn't want the same excuses he's heard before.

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CHUCK GRASSLEY: We've all seen the finger-pointing, but like most Americans, we all - I at least, and I think you'll find most members of Congress, are sick and tired of the blame game.

KODJAK: Grassley was referring to drugmakers' habit of blaming the high prices they initially set, known as list prices, on insurance companies and middlemen known as pharmacy benefit managers because they both demand discounts off those prices. But Grassley was relatively kind in comparison to Oregon Senator Ron Wyden, the committee's ranking Democrat.

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RON WYDEN: I think you and others in the industry are stonewalling on the key issue, which is actually lowering list prices, and reducing those list prices are the easiest way for American consumers to pay less at the pharmacy counter.

KODJAK: Drug companies routinely say their list prices are meaningless because people with insurance rarely have to pay that price. But Wyden and Grassley weren't buying it.

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GRASSLEY: For seniors on Part D who are paying coinsurance as a percentage of list price, then for that person, list price is very meaningful. For people who have high deductible plans and pay thousands of dollars towards the list price, then for those people, the list price is very meaningful.

KODJAK: Wyden said those list prices are forcing patients into dangerous choices.

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WYDEN: It's morally repugnant when ailing patients are forced to choose between filling the next prescription or putting food on the table because they can't afford both.

KODJAK: All of the executives said they support a Trump administration proposal to change how drug prices are set. The way things work today, the deals pharmacy benefit managers negotiate on behalf of insurance companies come in the form of secret rebates. The Trump proposal would require the companies instead to offer upfront discounts that consumers get when they buy their drugs at the pharmacy counter. All of the executives said their list prices would fall if the proposal were finalized and it applied to government and private insurance plans. Albert Bourla is the CEO of Pfizer.

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ALBERT BOURLA: It is very clear intention that we will not keep a single dollar from these rebates. We will try to move every single penny to the patients.

KODJAK: The companies opposed another Trump proposal - to base the price that Medicare pays for some drugs on the prices that are paid in other countries. They also opposed allowing Medicare to negotiate prices directly with drug companies, as Democrats in the House and Senate have proposed. Olivier Brandicourt, CEO of drugmaker Sanofi, summed up what several of the witnesses said.

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OLIVIER BRANDICOURT: The government should not directly control the price of medicines either through federal government price controls or worse, outsourcing price decision to other countries

KODJAK: Senators also grilled the CEOs on their compensation practices, their use of the patent system and how much they spend on advertising. As the hearing wound down, it was clear that lawmakers are looking for concrete ways to cut what the government and consumers pay for prescription drugs. Alison Kodjak, NPR News, Washington.

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