Sunday, 26 May 2019

It’s pharma’s turn for a Senate grilling – Politico

With help from Allie Bice, Dan Goldberg, Rachel Roubein and Adam Cancryn


— Seven drug industry executives will testify at the Senate Finance Committee’s hearing on pricing Tuesday. Expect harsh questioning and some attempts to deflect blame.

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— The Supreme Court declined to hear Maryland’s bid to revive its drug pricing law. But the move may not discourage other states seeking to address the same issue.

— FDA rebuts media reports on safety of generic drugs. “We welcome the accountability inspired by a free press,” Commissioner Scott Gottlieb said, adding some interpretations of the data are “seriously flawed.”

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Happy Monday and welcome back to Prescription PULSE, where we want to know which pharmaceutical executive will get the most heat at Tuesday’s grilling. Send your prediction, news and tips to Sarah Karlin-Smith ([email protected] or @SarahKarlin) and Sarah Owermohle ([email protected] or @owermohle).

Drug Pricing

DRUG COMPANY CEOS FACE CAPITOL HILL RECKONING — Seven industry executives will face a grilling from the Senate Finance Committee on drug pricing Tuesday, a signal that major legislation addressing costs is on the horizon. It is likely to be reminiscent of past hearings with bank, health insurance and tobacco executives that led to major changes for those industries.

“This is not a good sign for the pharmaceutical industry that they are the next industry that is begin called before Congress to explain their abusive practices,” said Ben Wakana, executive director of Patients for Affordable Drugs.

The hearing comes with drugmakers facing an increasingly hostile political environment and no longer able to count on longtime Republican allies to protect them from emboldened Democrats.

How pharma will handle it: The executives will aim to strike just the right note of contrition while also shifting the blame for high prices to other parts of the health care industry. They’ll additionally tout their investments in research and development and the role they play in saving lives.

How lawmakers will react: Committee aides say members will have little patience for drug executives who don’t give straight answers or who point fingers “The CEOs would be wise to be attending the hearing from a very earnest perspective,” one Republican aide said. “It will go south for them really quickly if they’re not trying to be helpful and forthright in their answers.” And lawmakers say they’ll be ready to refute arguments that other industry players bear the blame.

The bottom line: Tuesday will be a rough day for pharma. “Even on the best day, if the CEOS perform well, it doesn’t take away the sting of the issue being out there,” said one federal policy expert in the industry whose company is not represented on the witness stand. Read Sarah Karlin-Smith’s full preview here.

… And in case you thought attention on drugmakers would die down after Tuesday: Sens. Chuck Grassley and Ron Wyden, the Finance Committee chairman and ranking member, launched an investigation late last week of three insulin-makers — Eli Lilly, Sanofi and Novo Nordisk — over surging prices for the life-saving diabetes medicine. House members also are looking at the issue. More for Pros here.

SCOTUS DECISION IN MARYLAND CASE SHOULDN’T BE HUGE BLOW TO STATES’ DRUG PRICING EFFORTS — The Supreme Court last week declined to take up Maryland’s appeal of a lower court decision that invalidated a state law aimed at preventing price gouging of generic and off-patent medicines. The move comes as dozens of states are working on legislation to control drug costs, but legal experts weren’t overly concerned that the court’s refusal would squelch those efforts.

“I don’t think that the case is damning whatsoever for other drug pricing laws,” said Jaime King of UC Hastings College of the Law.

That’s largely because many states have moved away from the approach Maryland took and are deliberately crafting bills that shouldn’t affect drug sales in other states, said Erin Fuse Brown of Georgia State University’s law school. The Maryland statute was struck down by the 4th U.S. Circuit Court of Appeals, which found that it violates the Constitution’s commerce clause by regulating the prices of transactions that occur outside Maryland. The law would have allowed the state to investigate “unconscionable” drug price increases, and to request violators pay back consumers, require them to lower drug prices for a year and pay fines up to $10,000 for each transgression. It targeted the prices drug companies charge to wholesalers — sales which often would occur out of state.

However, “the dormant commerce clause wouldn’t block transactions that are within the state, and so efforts by the state to regulate the prices that insurers pay or payers pay for drugs and that consumers pay within the state wouldn’t raise the same problem,” Brown said.

One lingering concern: The threat of costly litigation could still stop states from acting on drug prices. The industry is apt to find different legal challenges for other types of bills. “The real power is to scare legislators,” said Harvard’s Ameet Sarpatwari. Industry can say “‘we won against Maryland, do you really want to spend you your limited capital on this when we will definitely take you to court and may win,’” he said. But while Sarpatwari thinks the case “has a slight possible chilling effect on the whole,” he believes there is now enough momentum on the issue that most states will go forward with their plans.