Echoes of Big Tobacco fight in Big Pharma hearings

Emily Kopp, CQ-Roll Call on

Published in Political News

"This strategy of kind of acknowledging the problem and proposing a solution that would actually worsen the problem was pioneered by Big Tobacco in the mid-1980s," said Stanton Glantz, a professor of medicine at the University of California, San Francisco and director of the Center for Tobacco Control Research and Education.

The CEOs of seven companies -- AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer and Sanofi -- used the February hearing to pitch Congress on nixing rebates as a solution to high drug prices. (Rebates are the payments drug companies make to pharmacy benefit managers, or PBMs, which manage the drug benefits paid out by insurers.)

"We hope to be a constructive partner in finding solutions," said Pascal Soriot, the CEO of AstraZeneca. "The fact that many patients struggle with out-of-pocket costs despite the discount and rebates we provide stands counter to our mission of improving patient health."

Critics of PBMs, which include pharmaceutical companies but also independent patient advocacy groups and health policy experts, say rebates create a perverse incentive for pharmaceutical companies to increase their prices.

But Wyden followed up with the drugmakers, requesting written testimony on whether, should federal regulators scuttle the rule that allows for rebates, they would lower their prices commensurate to the value of the rebate.

In those written responses, made public this month, the companies hedged, saying that pledging to lower their prices equal to the PBM markup would be premature without knowing how other players would respond to the change.


Drugmakers stand to reap tens of billions of dollars more in revenue from such a change, but when pressed, the companies stopped short of committing to passing along that revenue to hurting patients.

"In case there was any doubt, Big Pharma is not about to start self-policing their pricing practices," Wyden said in a statement. "In order to prevent a cash grab that gives drug makers a windfall and leaves consumers stuck with high prices, Congress must take significant action to end business as usual in the broken drug pricing system."

The drug hearings have served as "a venue to promote industry-friendly priorities, such as measures that put controls on PBMs and other players, but not manufacturers," said Elizabeth Rowley, the director of T1International, a diabetes advocacy group that does not accept funding from the drug industry.

"Patients will keep speaking out until true, long-term solutions are created because our lives depend on it," she added.


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