Big pharma shows no signs of 'massive' drug price cuts

Dive Brief:

  • The country’s biggest pharmaceutical companies don’t appear poised to make good on the ‘massive’ price cuts President Trump hinted were coming soon during a bill signing last month.
  • None of the top 10 drugmakers in the U.S. have voluntarily brought down list prices since May 11, when the Trump administration unveiled its blueprint for making medicines more affordable, according to letters sent in response to drug pricing inquiries from Sens. Elizabeth Warren, D-Mass., and Tina Smith, D-Minn.
  • One pharma, Novartis, said it has price increases planned for later this year. Many indicated they were still combing through the blueprint and trying to work on appropriate drug pricing strategies moving forward. Aside from Novartis, the other nine companies that faced Warren and Smith’s questions were AbbVie, Amgen, Genentech, Gilead, GlaxoSmithKline, Johnson & Johnson, Merck & Co., Pfizer and Sanofi.

Dive Insight:

During a signing ceremony for a “Right to Try” bill expanding access to unapproved treatments, Trump surprised many by pledging that some of the nation’s largest drug manufactures would be initiating price cuts — in two weeks’ time.

The Hill on Monday reported that Department of Health and Human Services officials had been meeting with pharma execs about slashing prices.

So far, however, the cuts haven’t come to fruition, something Democratic lawmakers have been quick to point out.

“As a candidate, President Trump talked a big game on lowering drug prices. But after 500 days, the only healthcare price he has dropped is his former secretary,” said Sen. Patty Murray, D-Wash., a ranking member of the Senate Committee on Health, Education, Labor and Pensions, at a Tuesday meeting with HHS Secretary Alex Azar.

The big pharma responses to Warren and Smith’s letters aren’t boding well for a fast or sweeping curtail of drug prices either.

Many of the companies touched on similar themes: their large investments in R&D, their dedication to improved patient access, their interest in value- or indication-based pricing models. Some, including J&J, Merck and Sanofi, highlighted transparency reports they’ve published that lay out some of the decision-making that goes into setting list prices.

Yet, the companies largely avoided discussing any pending pricing reductions. Instead, several reiterated a common talking point among manufacturers, that pharmacy benefit managers and payers need to do better at passing savings from rebates and discounts on to patients.

It’s an argument that Azar, a former Eli Lilly exec and industry veteran, knows all too well, and one he expects will take more time to find a solution to than a few weeks.

“The key is can we detach the incentives of everybody in the system from these artificial list prices. Rebates are a cut, a percent of that artificial list price, and they basically foment this game we have of: list price goes up, rebate goes up; list price goes up, rebate goes up — where everybody’s winning except the patient who ends up paying out of pocket,” he said during his Tuesday congressional meeting.

“We’re talking about the wholesale restructuring of the drug pricing and drug distribution system in this country. I mean, what the president has taken on in this blueprint is nothing short of comprehensive reform of how drugs are priced and done. That doesn’t happen in just a week or two,” he later added.

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