BIG PHARMA POLITICS: Consumers pressure politicians to do something about rising drug prices. Read More
A “broken” system has allowed insulin prices to soar in recent years by rewarding companies for raising costs on a drug that hasn’t been significantly improved in 100 years.
The findings from a U.S. Senate investigation and reported by The Hill, were announced in January. A bipartisan report from Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Oregon, leaders of the Senate Finance Committee, criticized the system that hurts consumers by driving price increases.
“This investigation makes clear that consumers are the only ones losing out in America’s broken drug- pricing system, since every part of the pharmaceutical supply chain benefits from higher list prices,” Wyden said in a statement.
The investigation reveals that Novo Nordisk and Sanofi – two of the largest insulin makers in the U.S. – closely monitor the other’s prices to match or top price increases. Sometimes this would occur within hours or days. This practice led to price increases, rather than the two drug companies undercutting their competition by lowering prices.
The report also calls out pharmacy benefit managers (PBMs) for playing a role in price increases. Documents showed drug companies were “sensitive” to the bottom lines of PBMs and health plans, knowing that if they dropped the list price of their insulin products, PBMs would make less money and potentially punish the drugmakers by leaving them off a health plan’s list of covered drugs.
According to a presentation slide from Novo Nordisk obtained by the committee, the company weighed the pros and cons of a price decrease. The benefits: Relieving pressure from media and Congressional hearings and supporting patient affordability. The downside: Financial risks. Novo Nordisk decided the downside outweighed the benefits, so the board rejected proposed price decreases.
Do you think lawmakers should address this “broken” system and pass laws that lower drug prices this year? Share your voice.