Committees in Congress have issued more than a dozen subpoenas to drug-makers for alleged price-hiking in the last 2 years, with members of the House and Senate collecting hundreds of thousands of documents on pricing strategies and marketing tactics. They’ve put pharmaceutical execs through more than 16 hours of public testimony. But an Associated Press review shows that pressure from Washington has done little to rein in drug prices.
The wire service’s examination of the list prices of 30 brand-name and generic medications showed that most have not budged after enduring federal scrutiny. While list prices for 5 of the drugs fell, prices for 2 of actually increased. More frequently, pressure from Congress did nothing to change the list price.
“These companies have made clear that they are not going to change course on their own – they will keep bilking the American people for all they can unless Congress acts,” said Rep. Elijah Cummings (D-Md.), ranking member on the House Committee on Oversight & Government Reform.
The U.S. is 1 of few countries that does not regulate drug prices. Instead, pharmaceutical companies can set prices as high as the market will bear. Congress has avoided passing laws to regulate how drugs are priced, leaving politicians with little room to hold drug-makers accountable for price hikes.
The industry has defended its list prices, saying that it overstates drug costs since insurers negotiate discounts and rebates. But the actual price is unclear, since companies rarely disclose those negotiated deals.
Mylan (NSDQ:MYL) has come under fire in recent months, after reports surfaced that it had raised the price of its epinephrine allergy treatment auto-injector by 500% over the past decade. CEO Heather Bresch testified before Congress and defended the price hikes, but lawmakers questioned her honesty and asked her to produce more thorough documentation regarding the company’s pricing strategy. Bresch is the daughter of Sen. Joe Manchin III (D-W.Va.).
Without changing the list price of the current device, Mylan dispelled some public outrage by offering a $300 generic version and expanding the company’s patient assistance program.
Drug price reform seems a distant prospect, especially in light of the presidential election – pharmaceutical stocks surged following Donald Trump’s win last week. Lawmakers will most likely continue to berate drug-makers at public hearings in an attempt to appease their constituents. A survey by the Kaiser Family Foundation showed that a majority of Americans think lowering drug prices is the most important healthcare issue that the incoming president and Congress should work on.
“The big question is whether it remains mostly talk and hearings or whether it amounts to action,” Drew Altman, president of the nonpartisan Kaiser foundation, told the AP. “At this stage the drug industry is playing a version of Muhammad Ali’s rope-a-dope – rolling with the punches and waiting to see how things turn out.”