February 26, 2019 / 3:22 PM / a month ago

U.S. senators tell drug company executives pricing is 'morally repugnant'

WASHINGTON/NEW YORK (Reuters) - U.S. senators called drug pricing practices “morally repugnant” and told drug company executives they do not want to hear them blame others for the high prices, taking an aggressive stance at a Senate hearing on the rising costs of prescription medicines.

FILE PHOTO: Senator Ron Wyden, L, (D-OR) questions Commerce Secretary Wilbur Ross as Sen. Orrin Hatch, R, (R-UT) listens on during a Senate Finance hearing on "Current and Proposed Tariff Actions Administered by the Department of Commerce" on Capitol Hill in Washington, U.S., June 20, 2018. REUTERS/Kevin Lamarque/File Photo

Senators took aim in particular at Abbvie Inc Chief Executive Richard Gonzalez and his company’s rheumatoid arthritis drug Humira - the world’s top-selling prescription medicine.

Executives from AstraZeneca PLC, Sanofi SA, Pfizer Inc, Merck & Co, Johnson & Johnson and Bristol-Myers Squibb Co also answered questions from members of the U.S. Senate Finance Committee.

The executives pointed to their companies’ records of developing lifesaving medications, saying profits generated in the lucrative U.S. market help them fund expensive research and development of future treatments.

“American research-based companies are leading the next wave of biomedical innovation to help patients whose diseases cannot be adequately treated with today’s medicines. We should work to ensure policies that support and reward these investments,” said Bristol-Myers CEO Giovanni Caforio.

The executives also voiced support for plans to reform the industry-wide system of rebates that pharmacy benefit managers (PBMs) and health insurers receive from drugmakers in exchange for preferential coverage of their medicines.

In his opening statement, Senator Ron Wyden, the Finance Committee’s top Democrat, tore into each company one-by-one for “profiteering and two-faced scheming.”

“Drugmakers behave as if patients and taxpayers are unlocked ATMs full of cash to be extracted, and their shareholders are the customers they value above all else,” Wyden said.

Senators from both parties targeted AbbVie’s Gonzalez, with Wyden noting that the CEO’s bonus was partially tied to Humira sales, which reached nearly $20 billion globally last year. Republican Senator John Cornyn criticized the company’s web of more than 130 patents that protects Humira’s exclusivity.

The drug has a list price of more than $60,000 a year, nearly double what it was in 2014, according to Rx Savings Solutions, which helps health plans and employers seek lower cost prescription medicines.

“I support drug companies recovering a profit based on their research and development and development of innovative drugs. But at some point, that patent has to end, that exclusivity has to end, to be able to get it at a much cheaper cost,” said Cornyn, the No. 2 Senate Republican from Texas.

Cornyn suggested that the powerful Senate Judiciary Committee should examine the U.S. patent system under which drug companies protect the exclusivity of their medicines.

Congress has already held several hearings on rising prescription drug prices in both the Democrat-controlled House of Representatives and the Republican-led Senate, but Tuesday’s hearing is the first time drug company executives, most of them CEOs, will face lawmakers in more than two years.

U.S. President Donald Trump has said drugmakers are “getting away with murder,” and his administration has made bringing down prescription medicine costs for U.S. consumers a top priority.

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The U.S. Department of Health and Human Services (HHS) last year rolled out a plan to lower drug prices and has introduced several modest proposals to curb medicine costs, but Democrats have said the Trump administration is not doing enough.

HHS has proposed a rule to eliminate rebates for drugs paid for by Medicare and Medicaid, the government health insurance programs.

Several drugmakers temporarily froze price increases last year after criticism from Trump, but they raised prices on more than 250 prescription drugs at the start of this year, albeit at lower levels than in years past.

Reporting by Yasmeen Abutaleb; editing by Jonathan Oatis and Bill Berkrot

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