Even leaders in the pharmaceutical industry recognize that drugs are too expensive for Americans • Fantastic Insurance

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When a legislator compares how your company protects its profits to the Gollum protects his ringyou know it will not be fun four hours.

For example, Oregon's Sen. Ron Wyden spoke on Tuesday about how drug manufacturer AbbVie is protecting the exclusivity of its award-winning drug, Humira. The commentary announced how the Senate Finance Committee would question seven CEOs of pharmaceutical companies on a topic that fueled bipartisan anger: Why is the price of drugs so high?

To name just one example, the price of insulin, which was invented in the 1920s, doubled between 2012 and 2016. The price of Lantus insulin has risen 49% in 2014 only. The struggle of patients to pay for treatments such as EpiPens and hepatitis C drugs has been well advertised.

Senators accused the leaders of setting list prices arbitrarily and regardless of how they affect US consumers. As expected, the CEOs left the responsibility to insurers and drug benefit managers, a kind of intermediary who negotiates drug rates and receives discounts, which, according to drug companies, drive up prices.

However, some key moments have revealed that even pharmaceutical companies recognize that the current system is down. Senators' "yes or no" questions revealed the real drug malfunction that Americans are currently facing:

  1. Sen. Chuck Grassley of Iowa asked leaders if they considered "negative public opinion" when setting drug prices, and all said yes. While not altogether outrageous, this suggests that the price of drugs is not just a function of administrative costs, research and development, as many people might think. More cynically, this implies that if no one is upset about the price of drugs, companies would be in a hurry to increase them even more.
  1. Wyden pointed out that drug prices in the United States are higher than elsewhere in the world, which is true. He asked managers if their companies still made profits on drugs sold in France or Germany, for example. Richard Gonzalez, CEO of AbbVie, admitted that this was the case. Wyden then accused him of "defrauding" the American consumer. Gonzalez admitted that the United States had "some of the highest prices in the world," but that "our system is based on a variety of prices around the world, but this global system supports our R & D model. D ". He took up this argument later, when he admitted that American families are paying more for Humira than European families, because "Humira plays an important role in the overall funding of research and development by AbbVie". In other words, he claims that if drugs were as cheap in the United States as elsewhere, pharmaceutical companies could not afford to develop new drugs. This statement is very controversialBut it's interesting to hear a leader in the pharmaceutical industry admit that Americans pay more for their drugs.
  2. If Humira was his own company, the drug would be one of 500 fortune companies all by himself. Senator Debbie Stabenow from Michigan lobbied on this point. (And seems to be this story of Axios, which reports that because of the $ 18.4 billion generated by the drug, "if Humira was an autonomous company, it would be more important than many Fortune 500 conglomerates, such as General Mills, Halliburton or Xerox."
  3. Senator Maggie Hassan from New Hampshire spoke about pseudo-addiction, and Jennifer Taubert, Janssen Pharmaceuticals, did not know what it was. Pseudo-drug abuse was a misconception advocated by opioid manufacturers at the beginning of OxyContin, which suggested that if a patient showed signs of dependence, for example by requiring higher doses from doctors, this could be a sign that he enough opioids. Janssen would have promoted this ideaand he is currently being sued by New Jersey for doing it. When asked about this, Taubert disapproved of public opinion, saying that opioids accounted for only 1% of the company's products. But with the epidemic of opioids so serious right nowIt is not a good idea for a pharmaceutical company not to have this idea in mind. (Janssen previously called states that they have defended the idea of ​​"baseless" pseudo-drug addiction, and have stated that she has always acted appropriately with regard to opioids.)
  4. Senator Sherrod Brown of Ohio asked if it is true that no other country besides the United States is investing more taxpayers' money in the research that the pharmaceutical industry benefits from, and every leader has say yes.. Brown's argument – and that of many other senators – was probably that American taxpayers are the ones who subsidize research and development the most, and then pay the price of drugs.
  5. In response to a question from Montana Senator Steve Daines, Kenneth Frazier, Merck, admitted that patients without insurance are sometimes the ones who pay the current price. "It's the people with the least means who pay the most," Frazier said. "The prices displayed are detrimental to the patient." Merck attributes this situation to rebates paid to PBMs and insurers, so it is not entirely accepted that they increased their prices. But that seems to recognize a problem with the system.
  6. "The government needs to step up and change the rules." This, from Pascal Soriot, CEO of AstraZeneca, is a rare call to government regulation from a giant company. However, he also returns the ball to the legislators' court.

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Olga Khazan is an editor at L & # 39; Atlantic.