U.S. senators tell drug company executives pricing is ‘morally repugnant’

By Yasmeen Abutaleb and Michael Erman

WASHINGTON/NEW YORK (Reuters) – U.S. senators called drug pricing practices “morally repugnant” and told drug company executives they do not want to hear them blame others for the high prices, taking an aggressive stance at a Senate hearing on the rising costs of prescription medicines.

Senators took aim in particular at Abbvie Inc Chief Executive Richard Gonzalez and his company’s rheumatoid arthritis drug Humira – the world’s top-selling prescription medicine.

Executives from AstraZeneca PLC, Sanofi SA, Pfizer Inc, Merck Co, Johnson & Johnson and Bristol-Myers Squibb Co also answered questions from members of the U.S. Senate Finance Committee.

The executives pointed to their companies’ records of developing lifesaving medications, saying profits generated in the lucrative U.S. market help them fund expensive research and development of future treatments.

“American research-based companies are leading the next wave of biomedical innovation to help patients whose diseases cannot be adequately treated with today’s medicines. We should work to ensure policies that support and reward these investments,” said Bristol-Myers CEO Giovanni Caforio.

The executives also voiced support for plans to reform the industry-wide system of rebates that pharmacy benefit managers (PBMs) and health insurers receive from drugmakers in exchange for preferential coverage of their medicines.

In his opening statement, Senator Ron Wyden, the Finance Committee’s top Democrat, tore into each company one-by-one for “profiteering and two-faced scheming.”

“Drugmakers behave as if patients and taxpayers are unlocked ATMs full of cash to be extracted, and their shareholders are the customers they value above all else,” Wyden said.

Senators from both parties targeted AbbVie’s Gonzalez, with Wyden noting that the CEO’s bonus was partially tied to Humira sales, which reached nearly $20 billion globally last year. Republican Senator John Cornyn criticized the company’s web of more than 130 patents that protects Humira’s exclusivity.

The drug has a list price of more than $60,000 a year, nearly double what it was in 2014, according to Rx Savings Solutions, which helps health plans and employers seek lower cost prescription medicines.

“I support drug companies recovering a profit based on their research and development and development of innovative drugs. But at some point, that patent has to end, that exclusivity has to end, to be able to get it at a much cheaper cost,” said Cornyn, the No. 2 Senate Republican from Texas.

Cornyn suggested that the powerful Senate Judiciary Committee should examine the U.S. patent system under which drug companies protect the exclusivity of their medicines.

Congress has already held several hearings on rising prescription drug prices in both the Democrat-controlled House of Representatives and the Republican-led Senate, but Tuesday’s hearing is the first time drug company executives, most of them CEOs, will face lawmakers in more than two years.

U.S. President Donald Trump has said drugmakers are “getting away with murder,” and his administration has made bringing down prescription medicine costs for U.S. consumers a top priority.

The U.S. Department of Health and Human Services (HHS) last year rolled out a plan to lower drug prices and has introduced several modest proposals to curb medicine costs, but Democrats have said the Trump administration is not doing enough.

HHS has proposed a rule to eliminate rebates for drugs paid for by Medicare and Medicaid, the government health insurance programs.

Several drugmakers temporarily froze price increases last year after criticism from Trump, but they raised prices on more than 250 prescription drugs at the start of this year, albeit at lower levels than in years past.

(Reporting by Yasmeen Abutaleb; editing by Jonathan Oatis and Bill Berkrot)

Senator Sanders to ask why drug, once free, now costs $375k

U.S. Senator Bernie Sanders speaks during a news conference on Yemen resolution on Capitol Hill in Washington, U.S., January 30, 2019. REUTERS/Yuri Gripas .

By Yasmeen Abutaleb

WASHINGTON (Reuters) – U.S. Senator Bernie Sanders plans to send a letter to Catalyst Pharmaceuticals on Monday asking it to justify its decision to charge $375,000 annually for a medication that for years has been available to patients for free.

The drug, Firdapse, is used to treat Lambert-Eaton Myasthenic Syndrome (LEMS), a rare neuromuscular disorder, according to the letter, made available to Reuters by the senator’s office. The disorder affects about one in 100,000 people in the United States.

The government is intensifying its scrutiny of the pharmaceutical industry and rising prescription drug prices, a top voter concern and a priority of President Donald Trump’s administration.

Both the Democratic-led U.S. House of Representatives and the Senate, controlled by Republicans, have begun holding hearings this year on the rising costs of medicines. Sanders is an independent who usually votes with Democrats.

In the letter dated Feb. 4, Sanders asked Catalyst to lay out the financial and non-financial factors that led the company to set the list price at $375,000, and say how many patients would suffer or die as a result of the price and how much it was paying to purchase or produce the drug.

For years, patients have been able to get Firdapse for free from Jacobus Pharmaceuticals, a small New Jersey-based drug company, which offered it through a U.S. Food and Drug Administration (FDA) program called “compassionate use.”

The program allows patients with rare diseases and conditions access to experimental drugs outside of a clinical trial when there is no viable alternative. 

Florida-based Catalyst received FDA approval of Firdapse in November, along with exclusive rights to market the medication for several years. The company, which bought rights to the drug from a company called BioMarin in 2012, develops and commercializes drugs for rare diseases.

In December, Catalyst announced it would price Firdapse at $375,000 a year. 

“Catalyst’s decision to set the annual list price at $375,000 is not only a blatant fleecing of American taxpayers, but is also an immoral exploitation of patients who need this medication,” Sanders wrote in his letter.

Sanders joins other U.S. lawmakers in investigating the pricing practices of pharmaceutical companies this year.

Democratic Representative Elijah Cummings, chairman of the House Oversight Committee, in January, wrote to 12 pharmaceutical firms asking for detailed information on how they set drug prices. 

Democratic Representatives Frank Pallone and Diana DeGette wrote to the heads of Eli Lilly, Novo Nordisk and Sanofi, the long-time leading manufacturers of insulin, requesting information on why the drug’s price has skyrocketed in recent years.

(Reporting by Yasmeen Abutaleb; Editing by Sonya Hepinstall)

U.S. lawmakers request info from insulin makers on rising prices

FILE PHOTO: Insulin supplies are pictured in the Manhattan borough of New York City, New York, U.S., January 18, 2019. REUTERS/Carlo Allegri

By Yasmeen Abutaleb

WASHINGTON (Reuters) – Two powerful U.S. lawmakers sent letters to the three leading insulin manufacturers on Wednesday requesting information on why its cost has skyrocketed in recent years and how much the companies profit from the life-sustaining diabetes treatment.

Democratic Representatives Frank Pallone and Diana DeGette, the chairman and a top-ranking member of the House Energy and Commerce Committee, respectively, wrote to the heads of Eli Lilly and Co, Novo Nordisk and Sanofi, the long-time leading manufacturers of insulin. The drugmakers have all raised the price of insulin at similar rates over the last several years.

“Despite the fact that it has been available for decades, prices for insulin have skyrocketed in recent years, putting it out of reach for many patients,” the lawmakers wrote.

“As one of the few manufacturers of insulin in the United States, your company is well-suited to shed light on these issues and offer potential solutions,” the letter to the three companies said.

The committee has not set a date for a hearing, a spokesman for DeGette said. It has the power to subpoena the drugmakers if they do not answer the committee’s request.

The annual cost of insulin for treating a type 1 diabetes patient in the United States nearly doubled from 2012 to 2016 to $5,705 from $2,864, according to a recent study.

The lawmakers’ letters come amid intensifying scrutiny from Congress over the high cost of prescription drugs for U.S. consumers. Both the House Oversight Committee and Senate Finance Committee held hearings on prescription drug prices on Tuesday, with a focus on insulin.

Sanofi confirmed receipt of the letter and said it would work with the committee on its request. Neither Novo nor Lilly immediately responded to requests for comment.

High prescription drug costs have consistently polled as a top voter concern and have been a top priority of the administration of U.S. President Donald Trump, a Republican.

U.S. prescription drug prices are far higher than in other developed nations that either directly or indirectly control medicine costs.

Democratic Representative Elijah Cummings earlier this month wrote to 12 pharmaceutical companies asking for detailed information on their pricing practices, including the makers of insulin.

About 1.2 million Americans have type 1 diabetes, requiring daily insulin. Type 2 diabetes, which affects nearly 30 million Americans, according to the American Diabetes Association, is treated with a variety of other medicines. But those patients may also eventually become dependent on insulin.

(Reporting By Yasmeen Abutaleb; Editing by Bill Berkrot)

Drug companies greet 2019 with U.S. price hikes

FILE PHOTO: A person holds pharmaceutical tablets and capsules in this picture illustration taken in Ljubljana September 18, 2013. REUTERS/Srdjan Zivulovic

By Michael Erman

NEW YORK (Reuters) – Drugmakers kicked off 2019 with price increases in the United States on more than 250 prescription drugs, including the world’s top-selling medicine, Humira, although the pace of price hikes was slower than last year.

The industry has been under pressure by the U.S. President Donald Trump to hold their prices level as his administration works on plans aimed at lowering the costs of medications for consumers in the world’s most expensive pharmaceutical market.

During a White House meeting with members of his Cabinet, U.S. President Donald Trump on Wednesday said he expected to see a tremendous decrease in drug prices. Health and Human Services (HHS) Secretary Alex Azar was at the meeting.

The overall number of price increases was down by around a third from last year, when drugmakers raised prices on more than 400 medicines, according to data provided by Rx Savings Solutions, which helps health plans and employers seek lower cost prescription medicines.

Allergan Plc was particularly aggressive. It raised list prices on more than 50 drugs, and more than half of those by 9.5 percent, according to the Rx Savings data

AbbVie Inc increased by 6.2 percent the list price of its blockbuster rheumatoid arthritis treatment Humira, which is on pace to record about $20 billion in sales in 2018.

Allergan said in a statement that its average list price increase across its portfolio is around 3.8 percent this year. It said it does not expect to realize any net benefit from the increases this year because of higher rebates and discounts it expects to make to payers.

AbbVie did not immediately respond to request for comment.

More price increases are expected this month. Reuters reported late last year that nearly 30 drugmakers had notified California agencies they plan to raise list prices of their drugs. Not all of those increases have been announced yet.

The United States, which leaves drug pricing to market competition, has higher prices than in other countries where governments directly or indirectly control the costs, making it the world’s most lucrative market for manufacturers.

HHS has proposed policy changes aimed at lowering drug prices and passing more of the discounts negotiated by health insurers on to patients. Those measures are not expected to provide relief to consumers in the short-term, however, and fall short of giving government health agencies direct authority to negotiate or regulate drug prices.

“It’s business as usual” for drugmakers, said Rx Savings Solutions Chief Executive Michael Rea, who said he believes there has to be meaningful changes to the marketplace, rather than new regulations in order for drug prices to drop.

(Reporting by Michael Erman; additional reporting by Jeff Mason in Washington; Editing by Bill Berkrot)

U.S. House panel to take up bill to spur generic drug development

File photo: U.S. Rep. Greg Walden (R-OR) asks questions of the witnesses during a House Energy and Commerce Committee hearing on the Patient Protection and Affordable Care Act on Capitol Hill in Washington, October 24, 2013.

WASHINGTON (Reuters) – A U.S. House of Representatives subcommittee will take up bipartisan legislation next week to foster generic drug development, the committee’s chairman, Representative Greg Walden, said on Thursday.

“President (Donald) Trump made it clear … he wants competition to lower drug prices, and that is precisely what this measure will help accomplish,” Walden, a Republican from Oregon, said at a health subcommittee hearing.

“Specifically the bill will require FDA (the Food and Drug Administration) to prioritize, expedite and review generic applications of drug products that are currently in shortage, or where there are few manufacturers on the market,” Walden said.

Trump this week met pharmaceutical executives and called on them to cut prices. He said the government was paying “astronomical” prices for medicines in its health programs for older, disabled and poor people.

Walden said recently there had been cases of “bad actors” who “jacked up the price of drugs because there was no competition,” but he did not name names. “We want to make sure that does not happen again,” the congressman said.

“For those in the industry who think it’s okay to corner a market, drive up prices and rip off consumers, know that your days are numbered,” Walden said.

He said the bill would also increase transparency around the backlog of generic drug applications at the FDA, saying there was an “unacceptably high” number.

The bill will be sponsored by Representative Gus Bilirakis, a Republican from Florida, and Representative Kurt Schrader, a Democrat from Oregon, Walden said. Republicans have the majority in both chambers of Congress.

(Reporting by Susan Cornwell; Editing by Chizu Nomiyama and James Dalgleish)

UnitedHealth trims drug coverage, including Sanofi insulin

A packet of diabetes drug Lantus SoloStar passes along the production line at a manufacturing site of French drugmaker Sanofi in Frankfurt J

(Reuters) – UnitedHealth Group, the largest U.S. health insurer, will stop covering several brand-name drugs as of next year, reinforcing a trend of payers steering prescriptions to lower-priced options.

In a bulletin seeking client feedback by Sept. 28, UnitedHealth said it is changing reimbursement terms for long-acting insulins and will no longer cover Lantus, the main insulin drug sold by Sanofi.

The insurer said Basaglar, a cheaper biosimilar insulin sold by Eli Lilly would be covered as “Tier 1,” meaning the lowest out-of-pocket costs for members. Levemir, produced by Novo Nordisk, will move from Tier 1 to Tier 2.

CVS Health made a similar move last month to drop Lantus in favor of Lilly’s new biosimilar.

Analysts at Jefferies said the sales impact of the United exclusion should be less than that from the CVS move, because the United plan covers around 15 million people while CVS covers 19 million.

Sanofi shares fell more than 1 percent on Thursday after the news but had recovered by 1200 GMT, while Novo was down 1.3 percent.

Sanofi reaffirmed its sales expectations despite the latest exclusion. A spokeswoman said the company was still targeting a decline in diabetes drug sales of 4 to 8 percent a year until 2018.

“We are disappointed with the decision. For Sanofi, it is a pity not to leave doctors a choice,” she said. “We had anticipated this kind of decision but we are holding discussions with other organisations in the United States to have them keep Lantus on their lists.”

Biosimilars are cheaper copies of protein-based biotech drugs such as Lantus, which are no longer protected by patents. They cannot be precisely replicated like conventional chemical drugs but have been shown to be equivalent in terms of efficacy and side effects.

United also said it will exclude from coverage Amgen’s white blood cell-boosting drug Neupogen, in favor of Zarxio, a biosimilar sold by Novartis.

UnitedHealth last year bought Catamaran for $12.8 billion, making it the nation’s No. 3 pharmacy benefit manager after Express Scripts Holding and Caremark, which is owned by CVS.

(Reporting by Deena Beasley, Ben Hirschler and Noelle Mennella; Editing by Ruth Pitchford and Elaine Hardcastle)