Defense of drug prices by the pharmaceutical industry: the guilty insurance companies

A line of defense is being formed for the largest prescription drug companies, whose top leaders will be called to Congress on Tuesday to witness high drug prices: they are not to blame.

It is a corporate version of the "the devil made me" argument.

The industry claims that it is trapped in a very distorted repayment system, which rewards companies that raise list prices and then offer significant discounts, in the form of rebates, for favorable treatment by the drug plans. insurance.

The French pharmaceutical giant Sanofi, which faces criticism for soaring insulin prices, presented its political strategy last week. When the light of the television will light up before a panel of seven CEOs of pharmaceutical companies, announced the company, she will join those who blame the insurance companies.

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Sanofi submits that the rebates granted to the insurance companies and the pharmacy benefit management divisions that they own are not passed on to consumers.

"We are convinced that increased rebates and lower net prices should result in lower direct costs for patients," Sanofi said in a statement to the Washington Post. "Unfortunately, in the current health system, this is not usually the case and these savings are not systematically passed on to patients in the form of lower co-payments or co-insurance."

It echoes the industry's broader arguments for catalog prices. Essentially, it claims to have been forced to set higher list prices because drug benefit managers are looking for the biggest discounts possible. The industry claims that the most important factor for decision-makers to consider is the "net price", after discounting insurers.

But a big problem for many consumers is that the price displayed has a real impact on their wallet: they often pay a percentage of the price displayed at the pharmacy counter.

[Democrats look to unlikely ally on drug pricing: Trump]

"While biopharmaceutical companies set the list price of a drug, insurers ultimately determine what patients pay out of pocket," said Holly Campbell, spokesperson for Pharmaceutical Research and Manufacturers of America. "We agree that the status quo is not working for patients and that our health system needs to change, but we need to tackle the right problem."

The Trump administration is in agreement with the pharmaceutical companies. He says he's trying to solve the problem of soaring drug prices by proposing to remove discounts from some Medicare and Medicaid programs. Many critics believe that rebates are essentially bribes that pharmaceutical companies pay to insurers to secure their market share.

The insurance industry is opposed to Trump's plan to limit rebates. After a wave of consolidations, the three largest pharmaceutical benefit managers are associated with insurance companies. Optum is part of the UnitedHealth group; ExpressScripts is part of Cigna; and CVS Caremark is associated with Aetna.

The fight for the rebate is a topic of discussion for CEOs of the drug industry who will be the subject of a round table before the Senate Finance Committee on Tuesday. In addition to Sanofi, Pfizer senior executives Merck, AstraZeneca, Janssen Pharmaceuticals of Johnson & Johnson, Bristol-Myers Squibb and AbbVie face tough questions from Senate Finance Chairman Charles E. Grassley. Republican of Iowa and a bipartisan. group of senators.

"I hope the co-directors of the drugs declaring tmrw do not try to blame everyone, but themselves / take no responsibility for the role they played in solving the problem," he said. tweeted Grassley Monday.

Insulin prices have been a source of political indignation since the three manufacturers, Sanofi, Lilly and Novo Nordisk, have all significantly increased their prices in recent years for a drug that has been around for decades and on which diabetics depend on weekly survival. Sanofi President Olivier Brandicourt will be the only one on Tuesday.

[[[[Insulin that saves life has become intolerably expensive]

On Friday, Grassley and senior Democratic member Ron Wyden of Oregon opened an investigation of the Senate Finance Committee on insulin prices by sending letters to three insulin manufacturers for Get detailed information on recent price increases, which rose by 585% in the case of Eli Lilly insulin. from 2001 to 2015.

Insurance companies fought back against the drug companies before Tuesday's hearing. They held a conference call Monday to highlight the high prices of prescription drugs. They were joIby groups representing doctors and hospitals.

"The whole debate about the middlemen that the big pharmaceutical companies continue to lead is nothing more than a distraction and that everyone has to be accused of their high drug prices, but themselves," he said. Kristine Grow, spokesperson for the American association Health Insurance Plans, Washington trade group. . "There is no visibility as to how they set these prices or what makes them go up."

"Drug manufacturers alone have the power to set prices. They do not link to the discounts they negotiate with (pharmacy benefit managers), "said JC Scott, president and chief executive officer of the Pharmaceutical Care Management Association, the PBM trade group. Federal report indicating that 40% of branded pharmaceuticals in 2015 were not subject to discounts, but that the prices of these drugs also continue to increase.

The reputation of the pharmaceutical industry is at its lowest in public inquiries. Last year, Gallup found that prescription drug companies ranked last, according to public opinion, with a negative score of 53%.

Other controversial drug manufacturing practices will be suspended for public release on Tuesday. AbbVie has used various legal tactics and patent attempts to protect its drug Humira from generic competition. It's the world's best-selling drug with $ 19.9 billion in 2018.

[`Marketers are having a field day:’ Drug company scare tactics hold back generic competition]

According to the government's latest estimates, total spending on prescription drugs in the United States will increase by 60% from 2019 to 2027, from $ 360.3 billion to $ 576.7 billion. The fastest growth will be in the government's Medicare program, where the cost of prescriptions will double as Americans age and take advantage of new, more expensive treatments. The annual increase in Medicare drug spending over the next decade will be in the order of 8% per year.

Grassley is considered much harder on the drug industry than the last Senate Finance Chairman, Orrin G. Hatch, the Utah Republican who retired from the Senate this year. Grassley advocated for the importation of Canadian drugs at a lower cost and protested against patent abuse and other regulatory gambling practices.

The Senate's new attitude will also be tested by an effort to prevent brand-name drug companies from complying with gaming regulations to block generic copies of their products. Senate Republicans have already stifled a bill, called CREATES, that would require brand-name manufacturers to sell samples of their products to generic drug companies so they can be modified. A current loophole allows drug manufacturers to refuse to sell products on the grounds of safety concerns.