Drugmakers Blame the System for High Prescription Prices

Top executives from seven giant pharmaceutical companies refused to guarantee to the Senate Finance Committee on Tuesday that they would make their products more affordable to American consumers by lowering their list prices.

One by one, the leaders of the drug manufacturers blamed runaway prescription drug retail prices on the rebates they say they must pay to pharmacy benefit managers and insurance plans or run the risk that their products will not be included on the lists of medicines that Medicare Part D prescription drug and private insurance plans will cover. They said the incentives in the system have led to list prices that they conceded are unaffordable for many Americans. They also said that if they didn’t have to pay those rebates they might be willing to reduce prices — but they refused to promise to do so.

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“I think you and others in the industry are stonewalling on the key issue — which is actually lowering list prices,” said Sen. Ron Wyden (D-Ore.), the senior Democrat on the panel. Lowering prices, Wyden said, “is the easiest way for the American consumer to pay less at the pharmacy counter.”

Tuesday’s hearing was the panel's second session on pharmaceutical prices. Similar investigations are being conducted in the House of Representatives, and administration officials have proposed regulations they say would help lower costs for millions of Americans.

Senate Finance Committee Chairman Charles Grassley (R-Iowa) told the industry executives that “every link in the supply chain has gotten skilled at finger-pointing. But, like most Americans, I’m sick and tired of the blame game.” Grassley made clear that his committee is looking for legislative options to keep drugmakers from engaging in practices “that keep drug prices high for patients.”

The seven executives called to testify represented manufacturers of some of the most popular — and expensive — prescription drugs: Richard Gonzalez, CEO of Abbvie, which makes the arthritis medicine Humira, the top-selling prescription drug in America; Kenneth Frazier, CEO of Merck & Co.; Olivier Brandicourt, CEO of Sanofi; Albert Bourla, CEO of Pfizer; Jennifer Taubert, executive vice president for pharmaceuticals at Johnson & Johnson; Giovanni Caforio, CEO of Bristol-Myers Squibb; and Pascal Soriot, CEO of AstraZeneca.