On February 26, 2019, top executives from seven of the largest pharmaceutical companies testified before the Senate Finance Committee attempting to defend the industry’s business practices. The major focus of the hearing was on the high cost of drugs and what role pharmaceutical manufacturers play in setting the list price. Senator Robert Mendez (D-NJ) also offered a “friendly warning” that policymakers would step in if manufacturers did not take “meaningful action to reduce prescription drug prices.”
Chairman of the Committee Senator Chuck Grassley (R-IA) was joined by many other Senators in expressing their concerns over the fact that many of their constituents are not able to afford the medications they need. While the executives acknowledged that manufacturers could play a role in helping to lower drug prices, they continued to defend the multi-billion dollar investments they make in research and development and praised the achievements these investments have made in treatments for diseases such as cancer, hepatitis C, schizophrenia and autoimmune diseases.
While 340B was not the focus of this hearing, Senator John Thune (D-SD) submitted for the record a report from 340B Health and also made a statement that 340B discounts account for less than 2 percent of the total drug market. The pharmaceutical companies did not use 340B as an excuse for the rising cost of drugs except for one comment from AbbVie CEO Richard Gonzalez. In his response to Senator Tom Carper’s (D-DE) question on whether pharmaceutical companies support eliminating rebates to PBMs, expanding the use of value-based arrangements, and increasing transparency on how pharmaceutical companies set prices, Gonzalez responded that while AbbVie supports all three measures, they support transparency “across the entire system, including everyone that is in the supply chain.” Gonzalez added that this “would also include where government rebates are, such as the 340B program.”