I can only think of one time in my life when a congressional hearing about health care was actually illuminating. It was 2016, and Mylan CEO Heather Bresch testified on the price of EpiPens.
The in-the-moment reviews were, to put it frankly, not good. CNBC ran a commentary with the headline, “Mylan CEO’s testimony was a huge blow to the entire pharma industry.”
Bresch got dinged for blame-shifting, patiently explaining how PBMs worked to drive prices higher as they incentivized larger rebates. And though it didn’t happen in time to save Bresch from a good deal of scorn, the EpiPen hearing was a turning point in the general understanding of PBMs.
To the extent to which PBM reform is a thing today (this is where I note that a House committee just passed another reform bill), it is — in some small way — because Bresch pulled that industry into the arena during her show trial before the Senate.
I bring all of this up because there will be another congressional hearing with pharma execs tomorrow (you may have heard something about this lol), and it’s hard to imagine that we’ll learn anything.
The goal of the Senate HELP session will be to deeply embarrass the pharmaceutical companies and create made-for-Twitter clips of Senators dunking on execs. Sen. Bill Cassidy complained that it will be “CEO whack-a-mole,” and he’s not wrong.
Sniping aside, the topic — “Why Does the United States Pay, by Far, the Highest Prices in the World for Prescription Drugs?” — is indeed important. But the nature of politics today means that we won’t have the discussion and teachable moments on the questions that I think are more fascinating:
What’s the patient experience like in other countries? There is a tradeoff that has been made, somewhat implicitly, in the United States: we’ll pay more for medicine, but we’ll get those medicines to patients more quickly. Are willing to trade access for lower prices?
How does pricing work in the United States, anyway? Tomorrow, Bernie is going to throw numbers at executives who are almost completely unconnected from what Medicare pays for medicines or what Americans pay for medicines. But that will be a missed opportunity to talk about differences between list prices, net prices, and out-of-pocket prices.
What about generics? Sanders will tomorrow castigate companies for prices on several medicines, and I’d wager that all of the examples that Sanders will cite will have generic or biosimilar competition by the end of the decade. While there are some problems with biosimilars that need working through (which is, unfortunately, not the subject of a Senate hearing), the United States leads the world in generic penetration. That’s the social contract: higher prices today, massively cheaper prices tomorrow.
Why is innovation centered in the United States? Nearly all biopharma innovation happens in the United States. That’s not a coincidence. I’d love to hear from innovators and investors to talk about how one country has cornered the market on breakthroughs. I suspect that part of the answer is that we have a system that is prepared to pay for value, which is not necessarily true elsewhere.
Are drugs prices according to the value they deliver? I’m pretty explicit, in public and in private, that we’re living in an era in which manufacturers should be prepared to defend the value of their medicines. If the Senate hearing focused on that, imagine how much more thoughtful the drug-price discussion would be.
None of these questions has a simple, “right” answer. But I’d love to have a more honest acknowledgment that changes to our health care system have tradeoffs so that we can have a more honest discussion about solutions. Railing about executive compensation isn’t going to get us there.
To be clear: I’m not so foolish as to expect we’ll get that discussion. The best I can hope for is some version of the EpiPen effect: that the seed of something real and meaningful is planted tomorrow, and even if it doesn’t bear fruit immediately, we might — might! — have a smart discussion at some point in the future.
A guy can dream.
It’s a day that ends in “Y,” which means that there is a new paper from the Harvard PORTAL folks. Today’s effort is a look to see which generic medicines are actually carried by cash-pay pharmacies and what they cost. Turns out the answers were “kind of a lot” and “not that much.”
Of the 100 most expensive generics, 80% were available at at least one of the five “direct to consumer” pharmacies assessed (which included — yup — Mark Cuban’s company, Amazon, Costco, Walmart, and Health Warehouse). Among the 50 most common generics, 98% were available at one of those pharmacies.
For expensive generics, Amazon most often had the lowest prices. CostCo was the winner for common generics. And, in general, prices were lower than GoodRx prices.
The comments on the march-in proposal are now coming in hot and heavy (the deadline was yesterday). Academic groups think using march-in to control prices will have a “detrimental and destabilizing effect” on commercializing technology. BIO is against it, too, arguing that changes “will diminish private sector interest” in building atop existing technology. The Federal Trade Commission, on the other hand, said that the administration’s approach would be a “check on inflated pharmaceutical prices.”
This is good journalism: Axios asked what would happen to the Inflation Reduction Act if Donald Trump is elected president. The short answer: his administration is likely to defang it to the extent allowed by law. I fully expect to see a dozen versions of this story in the next 90 days.
Adam Fein over at Drug Channels has a nice breakdown of the latest National Health Expenditures data, which provides important — and generally missing — context around some of the drug-pricing debates.
The government of Colombia is asking generic-drug manufacturers if they have any interest in making copies of an important ViiV/GSK HIV medicine, per this STAT story that noted this is an important step in the country’s effort to issue a compulsory license for the drug.
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