On Tuesday, the U.S. Senate held a series of meetings to shed light on rising pharmaceutical prices. A number of CEOs from seven of the top drug firms have been called to testify. Among them will be executives from Pfizer, AbbVie, and Merck and others.
One primary objective is to learn how drugs are developed and marketed. Lawmakers want to learn if there is any real justification for the price increases.
Last month, pharmaceutical corporations announced that they were raising the prices on many popular prescription drugs, in spite of ongoing objections by Washington not to do so. For instance, Allergan, the company which manufactures Namenda, a primary Alzheimer’s treatment, increased prices on 51 of its drugs at the beginning of the year. Many of the price increases were significantly higher than inflation and ranged between 4.9 and 27 percent.
Previously, pharma companies blamed discounts and rebates offered to middlemen for the increases.
Controversy regarding the staggering hikes in prescription medication was brought to light after Mylan Pharmaceuticals increased the price to its severe allergy medication, the EpiPen, from just over a hundred dollars to $608 over a nine-year period. The CEO of Mylan, Heather Bresch, blamed the Wholesale Acquisition Cost (WAC) for inflated drug prices.
In a previous testimony to lawmakers, Bresch cited that once WAC’s rebates and fees are paid from the $608 Mylan charges for the Epi-Pen, the company only receives $274. She further testified that the company’s cost of goods related to producing the product is $69.
Meanwhile, physicians say higher drug prices affect patient care. Many patients are going without vital life-saving medication because of the price increases.
Dr. Scott Gottlieb, current Commissioner of the Food and Drug Administration (FDA), mentioned to Forbes that patients without health care coverage are affected the most. Those patients, he says, must often choose between paying the full price of the medication, or going without it altogether.
“The question is how we can bring more prudence to this complex system, in which drug discounts don’t flow evenly to the patients who need access to these medicines,” Gottlieb said.
It’ll be interesting to see if the Senate’s investigations will make a difference. During 2017 and 2018, members of the Senate Finance Committee received funds to the tune of more than $2 million from drug companies associated with political action committees. Some of those same companies will be taking the stand on Tuesday. Companies whose CEOS make millions a year while the cost of lifesaving medications continue to rise.