It has been a busy week on Capitol Hill. On Tuesday, the Senate Finance Committee held its first ever hearing on PBMs. And yesterday, Wednesday, April 10th, the House Energy and Commerce's Investigation Subcommittee held a second hearing on the rising costs of insulin (which is used to treat diabetes) and who is responsible for this crisis. For two and a half hours, representatives attacked drug companies and PBMs for evading responsibility and blaming each other for rising prices, and grew increasingly frustrated and angry at their dishonest evasions.
The witnesses before the Committee were Mike Mason (Senior VP, Eli Lilly and Company), Doug Langa (Executive VP, Novo Nordisk) Kathleen Tregoning (Executive VP, Sanofi). For the PBMs the witnesses were Thomas Moriarty (Executive VP and General Counsel, CVS Health), Amy Bricker, Senior VP, Express Scripts, and Dr. Sumit Dutta (Chief Medical Officer of OptumRx).
Both sets of witnesses claimed that they cared about patients and that the increasing insulin prices were not their responsibility, but the responsibility of the other companies. They also cited several programs they had established in order to lower insulin prices, and declared that they were saving consumers money.
Thankfully, the Committee members weren't buying it. Rep. Diana DeGette (D-CO-1), the chair of the Subcommittee, said that list prices were very high, and the companies put in place all these workarounds to lower insulin prices for many patients, but still a lot of patients didn't get those workarounds. All three companies have been increasing list prices, and that is unjustifiable. Mike Mason of Eli Lilly responded (accurately) that a large percentage of the list prices goes to rebates and discounts that PBMs take in order to put the drug on their formularies. The system has very bad incentives. DeGette commented that every component of the insulin pricing system was contributing to higher list prices and overall costs.
Rep. Joe Kennedy (D-MA-4) told the CEOS that "you aren't giving us good answers." When Express Scripts talked about their program to lower out of pocket costs for insulin for some patients, he responded, "Your programs are insufficient. How long does it take for people to access them?"
Rep. Frank Pallone (D-NJ-6) bluntly said that his constituents were fed up with the entire system and think insulin is outrageously expensive. They don't believe in a market based system anymore and think the government should set prices. He observed that competition is not working and not bringing down prices, and it is the responsibility of the federal government to step in and ensure people have access to affordable medicines. Rep. John Sarbanes (D-MD-3) denounced the rebate system for its lack of transparency and said he thought PBMs should be converted to utilities-or perhaps the government should enter and provide that function.
The most powerful words came from Rep. Jan Schakowsky (D-IL-9). Near the end of the hearing, she angrily told the witnesses, "We have the names of people who died because they couldn't afford their insulin. I don't know how you people sleep at night!" Insulin has gone from $21 per vial to much higher prices-Eli Lilly charges $275 a vial, Sanofi charges $270 a vial, and Nova Nordisk charges $280 a vial. That is unacceptable, and all three prices are suspiciously close. "The lobbyists out here need to understand that this is a commitment to get drug prices under control," she said.
Members of Congress are fed up with lies and evasions from drug companies and PBMs about the high price of insulin. The Department of Health and Human Services's proposed rule to eliminate the safe harbor for most PBM rebates in Medicare Part Dwill help, but it is not enough. Congress should swiftly pass legislation to lower list prices, eliminate rebates, stop price gouging, and make sure insulin is affordable for all Americans regardless of their health coverage.