A senior Republican lawmaker said Tuesday that he plans to investigate the “unacceptable” cost of insulin, as Congress opened hearings on high prescription drug prices and how government might put the brakes on a pharmaceutical industry used to setting its own terms.
“I have heard stories about people reducing their life-saving medicines, like insulin, to save money,” said Senate Finance Committee Chairman Charles Grassley, R-Iowa. “This is unacceptable and I intend to specifically get to the bottom of the insulin price problem.” Grassley’s staff provided his statement to reporters ahead of a hearing to set the stage for the panel’s work this year on drug prices.
Across Capitol Hill, the House Oversight and Reform Committee had its own hearing later Tuesday. Chairman Elijah Cummings, D-Md., has already announced a sweeping investigation of drug industry pricing practices, sending detailed information requests to 12 major manufacturers.
Although Democrats want Medicare to directly negotiate prices and Republicans prefer free-market approaches, they seem united in their disdain for the industry’s pricing. At the White House, President Donald Trump, who once accused drugmakers of “getting away with murder,” has set in motion multiple regulatory actions from approving more generic drugs to a planned experiment that would use lower international prices to save money for Medicare on certain drugs.
It all adds up to a politically perilous time for a powerful industry, although it’s still unclear whether lawmakers in the end will be able to agree on a plan of action.
The Pharmaceutical Research and Manufacturers of America points to research suggesting that price spikes of a few years ago have eased. Government price regulation will stifle innovation and deprive patients of timely access to innovative medications, the industry warns.
Insulin to treat diabetes is a particularly sensitive issue, since patients depend on the drug to try to maintain normal blood sugar and forestall serious complications of the disease, from heart problems to blindness and amputations. As yet there’s no effective generic competition to brand insulin costing hundreds of dollars a month.
A handful of companies dominate the insulin market, including Novo Nordisk, Sanofi and Eli Lilly, which formerly employed U.S. health secretary Alex Azar as a high-ranking executive.
The American Medical Association has called on the government to investigate rising prices for insulin, which saw a nearly 200 percent increase from 2002-2013, according to the physician group.
Grassley is an old adversary of the drug industry, having previously battled the companies over safety problems and pricing for government programs like Medicaid. Together with Democratic Sen. Ron Wyden of Oregon, he also investigated the pricing of Sovaldi, a costly breakthrough medication for hepatitis C.
Grassley has returned to the chairmanship of the Finance panel after heading up the Senate Judiciary Committee. Finance has jurisdiction over the government’s major health care programs.
Grassley said drugmakers have been cool to his requests to testify before the panel.
“I want to express my displeasure at the lack of cooperation from the pharmaceutical manufacturers,” he said, adding, “we will extend the opportunity again in the future, but we will be more insistent the next time.” The committee has subpoena powers.
Despite the tough talk, Grassley’s opening statement underscored just how far he and most Republicans remain from Democrats like Cummings on policy ideas.
Grassley issued a call for greater public accounting of how pharmaceutical companies set their prices, and he endorsed the Trump administration’s move to require drugmakers to disclose prices in advertising. Cummings is pushing a package of bills that would empower Medicare to directly negotiate prices, open up generic competition to drugs deemed “excessively priced,” and allow consumers to import lower-cost medications from Canada.
Consumer concerns are focused on brand-name drugs, particularly new medications that promise breakthrough results. Generics account for nearly 90 percent of prescriptions filled, but brand-name drugs account for more than 70 percent of the spending.
The hearings come as prices for brand-name drugs continue to rise, although data shows the total number of price hikes is somewhat lower than at the same time last year, and the overall percentage increase isn’t as steep. Facing heavy criticism from Trump and Democrats, some drugmakers have pledged to take fewer or smaller increases as the industry tries to avoid government regulation.
An analysis of brand-name drug prices by The Associated Press shows there were 2,712 price hikes in the first half of this month, as compared to 3,327 increases during the same period last year.
The size of this year’s increases was not as pronounced. The median — or midpoint— increase was 5 percent, as compared to nearly 9 percent last year. Both this year and last, the number of price cuts was minuscule.
The information on prices was provided by the health data firm Elsevier, and includes multiple doses and versions of many of the same drugs. The analysis reflects list prices for medications, a starting point for negotiations between manufacturers and insurers.
Economist Paul Hughes-Cromwick of Altarum, a nonprofit research organization, said moderate growth may not equate to relief for consumers, since U.S. drug prices are high to begin with. “You never want to confuse low growth rates with low price levels,” he said.