The first Senate hearing on high drug prices was a dichotomy between anger from Democrats and Republicans saying the entire pharmaceutical industry is not to blame.
“I don’t believe we should cast all pharmaceutical companies in the same light,” said Sen. Thom Tillis, R-N.C., during a hearing of the Senate Special Committee on Aging on generic prices Wednesday.
The hearing was the first bipartisan outing on high drug prices, as House Democrats held their own steering committee hearing earlier this month. The Senate hearing is part of the committee’s larger investigation into higher generic prices.
Sen. Claire McCaskill of Missouri, the committee’s top Democrat, urged government action on high generic prices, noting that Congress has a duty to take up the issue.
“This is a market failure, and when there is a market failure the government has a role in addressing it,” she said.
Generic drugs are supposed to be a cheaper alternative to brand name drugs.
The problem is companies that acquire off-patent drugs that have been generic for decades and then jack up the price. That, alongside high prices for brand name specialty drugs to treat chronic conditions, has sparked consumer outrage at the pharmaceutical industry.
The goal of the bipartisan investigation is to understand why companies can raise prices so high. The committee singled out four companies: Turing, Valeant, Rodelis and Retrophin.
Each acquired a decades-old drug and increased the price. In Rodelis’ case, it was for a drug on the market since 1955 to treat drug-resistant tuberculosis, and for Retrophin it was a drug to treat serious kidney disease.
Valeant was accused of jacking up the price of two heart drugs, and Turing infamously increased the price of an anti-parasite treatment.
“Each of these companies has hiked the price of off-patent drugs they recently acquired by 20, 30, or even 40 times the prior price, at times putting these drugs out of reach for patients and the doctors who treat them,” said committee Chairwoman Sen. Susan Collins, R-Maine.
Collins also sought to put distance between the companies and the rest of the pharmaceutical industry. She said the companies in question appear more like hedge funds.
“As one industry expert I recently spoke with put it, ‘these companies are to ethical pharmaceutical companies as a loan shark is to a bank,'” she said in her prepared opening statement.
Among the solutions discussed at the hearing was whether to create a priority review pathway to entice manufacturers to produce generic drugs, as a lack of competition has led to the high prices.
“One of the basic defects or problems is that we [have] limited economic incentives,” said Sen. Bob Casey, D-Pa.
While the investigation centers on generic drugs, other senators wanted it to be expanded to brand name products.
“The majority of drug costs are not for generic,” said Sen. Elizabeth Warren, D-Mass. “We have seen price spikes across the industry but more of the cost is for brand-name drugs.”
Democrats have been investigating high drug prices for more than a year, but not much action has occurred on either brand or generic prices.
The only action Congress has taken on drug prices this year is a provision in the recent two-year budget deal that raised the debt limit. The provision requires generic manufacturers to offer rebates to Medicaid if prices rise past the pace of inflation.
