Senators publicly grill ‘Big Pharma’ executives after accepting millions from industry
Members of the Senate Finance Committee on Tuesday challenged executives from the largest pharmaceutical companies over the increase in drug prices in recent years despite taking a combined $7.9 million from the pharmaceutical/health products industry over the last six-year Senate election cycle.
Committee Ranking Member Ron Wyden (D-Ore.), who took more than $700,000 from the pharmaceutical industry from 2013 to 2018 between his campaign committee and leadership PAC, began on offense. Sitting in front of Merck CEO Kenneth Frazier, who gave the Oregon Senator $2,500 in 2016, Wyden criticized Merck for cutting prices only on drugs that aren’t big money makers — and reprimanded each of the companies present for various policies he deemed greedy.
The hearing marked a departure from the committee’s direction under former Sen. Orrin Hatch (R-Utah), a staunch defender of the pharmaceutical industry that was his top overall contributor, providing more than $985,000 from 2013 to 2018.
The industry’s reception appears to be less friendly under Committee Chairman Chuck Grassley (R-Iowa), who took just $12,000 from the industry in 2018 and $252,480 over the same time period as Hatch.
Grassley criticized the industry for “finger pointing” at other areas of the prescription drug supply chain. Pharmaceutical executives agree that out-of-pocket costs are too high but disagree that their list prices are to blame, instead pointing to pharmacy benefit managers (PBMs) that serve as middlemen in the prescription drug process and other aspects of the health insurance system.
Grassley and Wyden have introduced several bills attempting to curb increasing costs, with some drawing support from pharmaceutical companies. Sanofi CEO Olivier Brandicourt said he was in favor of several of their bills, including the CREATES Act, which prevents drugmakers from blocking competitors from producing cheaper generic drugs.
In fact, every pharmaceutical executive present agreed the bill was a positive step forward. But Pharmaceutical Research and Manufacturers of America (PhRMA) — which elected Brandicourt to its board in January 2019 — fought to defeat the CREATES Act in 2018 and remains in opposition to aspects of the bill.
Sens. Sherrod Brown (D-Ohio) and Sheldon Whitehouse (D-R.I.) during Tuesday’s hearing blamed “big pharma” lobbyists for successfully blocking reforms to the industry. Funded by pharmaceutical companies, PhRMA spent an organization record $28 million on lobbying in 2018. Overall, the pharmaceutical/health products industry spent $280 million in 2018 to influence federal policy as members of Congress considered drug pricing bills and the Trump administration laid out a blueprint to reduce drug prices.
Combined, the seven companies represented on Tuesday — Johnson & Johnson, Merck, Pfizer, Sanofi, Bristol-Myers Squibb, AstraZeneca and AbbVie — spent $41.9 million lobbying in 2018.
Rising drug prices have become a crucial talking point for both parties and it became evident on Tuesday. Senators from both parties on Tuesday questioned the increased cost of drugs in the U.S. compared to foreign western countries and pushed back on the talking point that drug companies need large profits to pay for research and development.
Some of the executives present at the hearing are politically active donors. Merck CEO Kenneth Frazier and his wife Andrea have given $444,771 to federal candidates and PACs, roughly evenly split between Democrats and Republicans. A Pennsylvania resident, he’s given $7,900 to committee member Sen. Bob Casey (D-Pa.), who was the top recipient of pharmaceutical contributions in 2018, receiving $532,859. Frazier also gave to committee members Tom Carper (D-De.), Mark Warner (D-Va.) and Mike Crapo (R-Idaho) in the 2018 cycle.
Pfizer CEO Albert Bourla, also present at the meeting, has given $96,636 since he starting giving to federal candidates in 2012. Both executives gave to House Minority Leader Kevin McCarthy’s (R-Calif.) joint fundraising committee.
The question of “what to do” about rising drug prices has sparked a public relations war between competing parties in the prescription drug supply chain. While the Campaign for Sustainable Rx Pricing, backed by health care providers, insurers and PBMs, argues it is drugmakers’ list prices that are causing the bulk of cost increases for consumers, the Alliance to Protect Medical Innovation and other apparent pharma-backed groups blame PBMs and insurers. Ultimately, it is up to Congress to figure out the best course of action, but any changes meant to lower drug costs will be heavily lobbied by industry-funded groups and lobbyists.
Note: The article incorrectly stated that Sen. Bob Casey (D-Pa.) did not appear at Tuesday’s hearing.
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