The Health 202: Drug executives may have to defend these expensive medicines to Congress

THE PROGNOSIS Sen. Chuck Grassley, chairman of the Senate Finance Committee, and ranking member Sen. Ron Wyden. (AP Photo/J. Scott Applewhite) Seven drug executives head to Capitol Hill tomorrow for a much-anticipated hearing on the booming costs of prescription drugs in the United States. It’s the largest panel of pharmaceutical CEOs in decades to sit before a congressional committee, so expect sharp confrontations and pointed questions from lawmakers about why these companies have hiked the price of their medicines so dramatically.

The companies that will be represented at the Senate Finance Committee hearing certainly aren’t the only one responsible for big price increases over the last two decades . But the list prices on many of their top-selling medications have drawn ire on and off Capitol Hill, prompting vows by President Trump and top committee leaders in Congress — including top Finance Chairman Chuck Grassley (R-Iowa) and the committee’s top Democrat Ron Wyden (D-Ore.) — to investigate and intervene.

The last thing these executives want to hear from lawmakers is any reference to what they regard as government price fixing, either through a Medicare experiment promised by Health and Human Services Secretary Alex Azar or a more drastic policy pushed by Democrats to allow the government to directly negotiate the prices of Medicare prescription drugs.

So as the executives are confronted by the lawmakers, they may stress a need for better policies to promote "biosimilar" drugs (drugs that closely mirror already approved medicines) as a way of introducing more competition. Here are the executives who will sit before the Finance Committee – and some specific prescription drugs they could be asked to defend:

—Albert Bourla, CEO of Pfizer

You’ve probably seen television ads for Lyrica — a medication for nerve pain used by patients with fibromyalgia, diabetes and spinal cord injuries. Its list price — now around $650 for a bottle of 90 pills — has increased 163 percent since 2012.

Pfizer has been allowed to sell the medication exclusively since 2004, and last year was granted an additional six months of exclusivity after getting the drug approved to treat seizures in kids. That got the attention of Wyden, who wrote to the company in December, demanding an explanation of how much money Lyrica generates and why the company says more price increases are necessary.

—Richard Gonzalez, CEO of AbbVie

There’s one massively profitable drug Gonzalez likely will be asked to defend, and that is AbbVie’s Humira. The arthritis drug, which comprises 63 percent of the company’s net revenues, has more than doubled in price over the last six years, from about $19,000 annually in 2012 to more than $38,000 now. AbbVie raised Humira’s price another 6.2 percent last month.

Lawmakers have increasingly singled out Humira and Lyrica as prime examples of unreasonable price hikes. Now-House Oversight Chair Elijah Cummings (D-Md.) named them as the two top-selling drugs with the steepest price increases for 2017 in a May 2018 report from committee Democrats on drug prices in the first year of the Trump administration.

—Pascal Soriot, CEO of AstraZeneca

The high cholesterol drug Crestor, also named in the Democratic report, is an example of how makers of branded drugs will often increase prices right before a generic competitor is introduced. Crestor cost about $300 in 2016 but has undergone several price hikes since then, including a 15 percent increase right before a generic version came out.

—Kenneth Frazier, CEO of Merck

Merck has taken great pains with its public image, announcing last year it would cut list prices by at least 10 percent for several of its drugs and promising the net price of its medicines wouldn’t grow faster than inflation. Yet, as the Wall Street Journal has noted , the company hasn’t lowered prices for some of its top-selling drugs, including its immunotherapy cancer drug Keytruda (whose list price is $13,500 per month) and Januvia, a non-insulin drug that helps lower the blood sugar of Type 2 diabetic patients. Merck CEO Kenneth Frazier sits next to President Trump. (AP Photo/Evan Vucci, File) —Olivier Brandicourt, CEO of Sanofi

Insulin — a drug that’s essential to the survival of diabetic patients, particularly those with Type 1 diabetes — is getting increasing attention in the cost debate, considering prices for this medication have skyrocketed by more than 500 percent in some cases. Sanofi will be the only one of the big three insulin makers represented at the hearing, so Brandicourt is likely to get a lot of targeted questions.

Sanofi increased the price for its long-acting insulin, Lantus, 77 percent from 2013 to 2019, Grassley and Wyden wrote in a letter to the company on Friday announcing a bipartisan investigation into insulin prices. The lawmakers also noted that the price of two widely used short-acting insulins — Eli Lilly’s Humalog and Novo Nordisk’s Novolog — increased 585 percent and 87 percent, respectively, during the same time period.

“These hardships can lead to serious medical complications that are entirely preventable and completely unacceptable for the world’s wealthiest country,” the senators wrote. “In addition, the increased price of insulin has caused federal programs to pay more for diabetes care…When one insulin product costs the taxpayer more than a billion dollars in one year, the American people ought to know how the company prices its product."

—Giovanni Caforio, CEO of Bristol-Myers Squibb

Lawmakers could raise concerns about Bristol-Myers Squibb’s acquisition of Celgene, which would mark one of the largest ever pharmaceutical mergers. Under the deal, Bristol-Myers Squibb would gain access to several cancer drugs, including the multiple myeloma treatment Revlimid. Revlimid’s price has risen 79 percent since 2012.

—Jennifer Taubert, executive vice president of Janssen Pharmaceuticals owned by Johnson & Johnson (CEO Alex Gorsky was invited but won’t be present)

Johnson & Johnson is one of the companies that drew negative attention by announcing a number of price hikes around the beginning of the year. Some of the company’s best-selling products — including blood thinner Xarelto, psoriasis treatment Stelara and Zytiga, a prostate cancer drug — will be subject to price increases.

And Janssen Pharmaceuticals, owned by Johnson & Johnson, was crafting a strategy last year to change the size of tablets for a blood-cancer drug called Imbruvica that typically costs $148,000 annually. The new pricing scheme would ensure taking lower doses wouldn’t save patients money or cut into Janssen’s revenue, as my colleague Carolyn Johnson reported . The U.S. Capitol. Photographer: Andrew Harrer/Bloomberg AHH: The pharmaceutical companies testifying before Congress are spending big on lawyers and strategic communications experts "who specialize in teaching unpopular corporate figures how to survive a Capitol Hill grilling," Stat News’s Lev Facher and Nicholas Florko report.

"STAT spoke with more than a dozen corporate lobbyists, lawyers, and public relations consultants who laid out the extensive preparations that go into avoiding a cable-news catastrophe," Lev and Nicholas write. "Their advice’s central themes: appear contrite and willing to work with lawmakers. Remain humble, even with senators who attack your compensation or lifestyle. And even in the face of aggressive questioning, never — never! — push back with force."

“It’s a dark and elaborate art, preparing an executive for this kind of setting,” Matt Herrington, a partner at the Washington law firm Steptoe & Johnson, told Lev and Nicholas. He said the strategy hinges on “being appropriately deferential and not a soundbite.“ The Department of Health and Human Services building in Washington. (AP Photo/Alex Brandon, File) OOF: The Department of Health and Human Services won’t provide witnesses for a scheduled hearing on the administration’s handling of children crossing the border into the United States.

In a statement, the agency said House Democrats failed to provide enough time to prepare ahead of Wednesday’s hearing before the House Appropriations subcommittee on Labor, Health and Human Services, Education and Related Agencies, The Hill’s Peter Sullivan reports .

“Their request did not adhere to the longstanding two-week notification precedent and did not provide adequate time to prepare the witnesses for testimony,” agency spokeswoman Caitlin Oakley said. “HHS has worked to be responsive to the Subcommittee’s request and has offered alternative hearing dates and alternative witnesses. Unfortunately, the Subcommittee rejected those offerings.”

Subpanel chairwoman Rep. Rosa DeLauro (D-Conn.) wanted Scott Lloyd, ex-director of the Office of Refugee Resettlement, and Steven Wagner, who was the acting assistant secretary for the agency’s administration for children and families to testify, and said the agency offered alternatives who were not involved in the family separation policy, Peter writes.

"Those are the people who need to be questioned, not the officials who were brought in afterwards to clean up their mess after thousands of children were separated from their families,” DeLauro said in a statement. Scott Gottlieb, commissioner of the Food and Drug Administration. (EPA/MICHAEL REYNOLDS) OUCH: Over the weekend, Food and Drug Administration Commissioner Scott Gottlieb sought to “set the record straight” on vaccine-related misperceptions that are leading to decreasing vaccination rates.

In a series of tweets, he detailed how vaccines work, described some common side effects as well as serious reactions, and described the MMR vaccination for […]

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