Drug, pharmacy, and distribution groups took turns blaming each other for high drug prices during a Senate hearing Tuesday.
The hearing gathered representatives from leading brand name, generic, pharmacist and pharmacy benefit manager groups to discuss the root of high drug prices. The Senate Health, Education, Labor and Pensions Committee hearing ended without a clear consensus as groups sought to deflect blame while being chided by senators.
The Pharmaceutical Research and Manufacturers of America, the biggest lobbying group for brand-name drugs, took aim at pharmacy benefit managers that oversee drug formularies for insurance plans. Pharmaceutical companies and PBMs negotiate over the prices of drugs that insurance plans cover.
Much of the debate over price increases focuses on the list price of a drug and doesn't factor in discounts and rebates that PBMs and insurance plans commonly negotiate, said Lori Reilly, executive vice president of policy, research and membership for PhRMA.
Claims from PBMs and insurers "about the skyrocketing prices of medicines almost always focuses solely on list prices, which are not reflective of actual spending trends," according to her opening statement.
The Pharmaceutical Care Management Association, which represents PBMs, tried to deflect that argument.
"There's no correlation between manufacturer price increases and the rebates and discounts they negotiate with PBMs," said Mark Merritt, president and CEO of the group.
The Association for Accessible Medicines, the primary generic drug industry group, meanwhile, blamed the federal government for a complicated approval process. It also criticized a penalty created in 2015 that forces generics to provide additional rebates for products even if prices don't rise.
The House and Senate have held hearings on how to combat high drug prices, but not much legislation has been approved to lower them. Congress has passed some bills aimed at speeding up generic drug approval at the Food and Drug Administration, but Democratic reforms such as letting Americans buy drugs from Canada and giving Medicare drug negotiating power have gone nowhere.
Sen. Lisa Murkowski, R-Alaska, said a major problem is confusion about the drug distribution system. She also pointed to changes in prices from hospital to hospital or insurance plans based on the negotiated price from a PBM or a provider.
"In no other industry that I can think of do you have this latitude for discrepancy in pricing and the ability to just set it and be done with it," she said.
Sen. Al Franken, D-Minn., asked why drug prices are higher than in other countries, specifically European countries that have government-run healthcare systems that negotiate for lower prices.
Franken, though, pointed out that taxpayers pay for research at the National Institutes of Health, and U.S. customers pay higher prices for the finished product.
"In many European countries the prices are artificially depressed and they tend to pay more when a medicine goes generic and they use few generics," Reilly responded. "They probably do spend a little bit less, but I would argue that our country incentivizes new therapies."
Franken shot back that is "small comfort" to people who can't pay for their prescriptions.