Pharmaceutical industry

drugmaker-to-testify-on-why-weight-loss-drugs-cost-15x-more-in-the-us

Drugmaker to testify on why weight-loss drugs cost 15x more in the US

bernie sanders, drug pricing, health, Novo Nordisk, obesity, Ozempic, Pharmaceutical industry, Science, wegovy, weight loss / /

On second thought —

Bernie Sanders cancels subpoena vote.

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Lars Fruergaard Jorgensen, chief executive officer Novo Nordisk A/S, during an interview at the company's headquarters in Bagsvaerd, Denmark, on Monday, June 12, 2023.

Enlarge / Lars Fruergaard Jorgensen, chief executive officer Novo Nordisk A/S, during an interview at the company’s headquarters in Bagsvaerd, Denmark, on Monday, June 12, 2023.

After some persuasion from Sen. Bernie Sanders (I-Vt.), the CEO of Novo Nordisk will testify before lawmakers later this year on the “outrageously high cost” of the company’s diabetes and weight-loss drugs—Ozempic and Wegovy—in the US.

CEO Lars Jørgensen will appear before the Senate Committee on Health, Education, Labor, and Pensions (HELP), which is chaired by Sanders, in early September. The agreement came after a conversation with Sanders in which the CEO reportedly “reconsidered his position” and agreed to testify voluntarily. As such, Sanders has canceled a vote scheduled for June 18 on whether to subpoena Novo Nordisk to discuss its US prices, which are considerably higher than those of other countries.

The independent lawmaker has been working for months to pressure Novo Nordisk into lowering its prices and appearing before the committee. In April, Sanders sent Jørgensen a letter announcing an investigation into the prices and included a lengthy set of information requests. In May, the committee’s investigation released a report suggesting that Novo Nordisk’s current pricing threatens to “bankrupt our entire health care system.”

Sanders has repeatedly hammered not only the high prices of Novo Nordisk’s two blockbuster drugs but also the huge disparity between US prices and those in other countries.

Up to 15x more in the US

“Novo Nordisk currently charges Americans with type 2 diabetes $969 a month for Ozempic, while this same exact drug can be purchased for just $155 in Canada and just $59 in Germany,” Sanders wrote in April. “Novo Nordisk also charges Americans with obesity $1,349 a month for Wegovy, while this same exact product can be purchased for just $140 in Germany and $92 in the United Kingdom.”

Yale researchers, meanwhile, published a study in JAMA in March estimating that both drugs could be manufactured for less than $5.

In May, Novo Nordisk responded with a letter to Sanders, arguing that blame for high prices in the US lies with the country’s complex health system and with middle managers who take cuts, according to Bloomberg. Novo Nordisk said in the letter that it is prepared to address “systemic issues so that everyone who can benefit from its medicines is able to get them,” the outlet reported. The company also said it has spent over $10 billion on research and development to bring Wegovy and Ozempic to the market.

Still, that number is small in comparison to the projected revenue from the drugs. Bloomberg noted that analysts estimate that Novo Nordisk will make $27 billion from the two drugs this year alone. The May analysis by the HELP committee found that if just half of the adults in the US with obesity start taking a new weight-loss drug, such as Wegovy, the collective cost would be around $411 billion per year. Another report by the Congressional Budget Office found that the drugs’ costs are so high that they will not be offset by any financial gains from improved health outcomes.

“The Committee looks forward to Mr. Jørgensen explaining why Americans are paying up to 10 or 15 times more for these medications than people in other countries,” Sanders said last week.

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Medicare forced to expand forms to fit 10-digit bills—a penny shy of $100M

car T-cell therapies, CMS, drug pricing, health, medicare, Pharmaceutical industry, Science / /

more zeros —

Previously, some doctors had to divide bills by 10 and submit 10 claims to get costs covered.

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High angle close-up view still life of an opened prescription bottles with pills and medication spilling onto ae background of money, U.S. currency with Lincoln Portrait.

In a disturbing sign of the times, Medicare this week implemented a change to its claims-processing system that adds two extra digits to money amounts, expanding the fields from eight digits to 10. The change now allows for billing and payment totals of up to $99,999,999.99, or a penny shy of $100 million.

In a notice released last month, the Centers for Medicare & Medicaid Services (CMS) explained the change, writing, “With the increase of Part B procedures/treatments exceeding the $999,999.99 limitation, CMS is implementing the expansion of display screens for monetary amount fields related to billing and payment within [the Fiscal Intermediary Shared System (FISS)] to accept and process up to 10 digits ($99,999,999.99).”

The FISS is the processing system used by hospitals and doctors’ offices to process Medicare claims.

Stat news, which first reported the update, noted that it’s not the first time CMS has struggled to make room for ever-increasing drug and treatment prices in its claims processing systems. In 2022, the agency had to give technical advice to doctors submitting claims for chimeric antigen receptor (CAR) T-cell therapy, which is used to treat blood cancers. CAR T-cell therapies run around half a million dollars, or eight digits. But in a different claims processing system, called the Multi-Carrier System (MCS), the money amount fields only included seven digits. In that case, rather than expanding the field, the CMS requested that doctors divide the bill by either five or 10, depending on the size, and then bill Medicare five or 10 separate times for a single claim.

CAR T-cell therapies aren’t the only treatments with eye-popping price points these days. Just last month, the drug Lenmeldy, a lifesaving gene therapy for a tragic childhood condition, set the current record for the highest drug price in the world at $4.25 million. Before Lenmeldy arrived, the hemophilia B drug Hemgenix held that record, with its price set at $3.5 million.

While these advanced therapies come with mind-boggling prices, prescription drug costs in the US are a problem across the board. In a KFF poll published in August, 28 percent of US adults reported difficulty affording their prescription medication, while 31 percent reported not taking their medicine as prescribed in the past year due to the cost. A federal report from 2022 found that Americans pay nearly three times more for prescription drugs than people in 33 other wealthy countries.

Medicare forced to expand forms to fit 10-digit bills—a penny shy of $100M Read More »

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Judge tosses Big Pharma suit claiming drug price negotiation is unconstitutional

Astrazeneca, drug pricing, health, medicare, Pharmaceutical industry, PhRMA, Science / /

tossed —

The judge ruled that the court lacks jurisdiction.

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Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America (PhRMA), speaks during a Bloomberg Live discussion in Washington, DC, on Tuesday, Sept. 19, 2017.

Enlarge / Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America (PhRMA), speaks during a Bloomberg Live discussion in Washington, DC, on Tuesday, Sept. 19, 2017.

A federal judge in Texas dismissed a lawsuit Monday brought by a heavy-hitting pharmaceutical trade group, which argued that forcing drug makers to negotiate Medicare drug prices is unconstitutional.

The dismissal is a small win for the Biden administration, which is defending the price negotiations on multiple fronts. The lawsuit dismissed Monday is just one of nine from the pharmaceutical industry, all claiming in some way that the price negotiations laid out in the Inflation Reduction Act of 2022 are unconstitutional. The big pharmaceutical companies suing the government directly over the negotiations include Johnson & Johnson, Bristol Myers Squibb, Novo Nordisk, Merck, and AstraZeneca.

Last month, a federal judge in Delaware heard arguments from AstraZeneca’s lawyers, which reportedly went poorly. AstraZeneca argued that Medicare’s new power to negotiate drug prices violates the company’s rights under the Fifth Amendment’s due process clause. The forced negotiations deprive the company of “property rights in their drug products and their patent rights” without due process, AstraZeneca claimed. But Colm Connolly, chief judge of the US District Court of Delaware, was skeptical of how that could be the case, according to a Stat reporter who was present for the hearing. Connolly noted that AstraZeneca doesn’t have to sell drugs to Medicare. “You’re free to do what you want,” Connolly reportedly said. “You may not make as much money.”

At a later point, Connolly bluntly commented: “I don’t find their argument compelling.”

Though the plaintiffs in the now-dismissed Texas also made an argument based on the Fifth Amendment’s due process clause, the case didn’t make it that far. US District Judge David Ezra in Austin, Texas, dismissed the case brought by one of the case’s three plaintiffs, saying the court lacked jurisdiction. And, because that one plaintiff is the only one based in the Western District of Texas, where the lawsuit was filed, he dismissed the case completely.

The three plaintiffs in the case were PhRMA, a powerful drug industry trade group representing high-profile drug makers, including Pfizer, GSK, Eli Lilly, and Sanofi; the Global Colon Cancer Association (GCCA); and the Texas-based National Infusion Center Association (NICA). Lawyers for the Biden administration filed a motion to dismiss the case, arguing that NICA is not a proper plaintiff.

Ezra found that for NICA to bring constitutional claims against Medicare’s price negotiations in a court, it is first required under federal rules to bring those claims through an administrative review process under the Medicare Act or the Centers for Medicare and Medicaid Services. Without a prior administrative review, the court has no jurisdiction.

“The Court lacks jurisdiction over NICA’s claims because the claims here ‘arise under’ the Medicare Act and the claims do not fall under the exception carved out for when claims may completely avoid judicial or administrative review. Therefore, NICA’s claims are dismissed without prejudice,” Ezra wrote in his ruling.

And, with the one Texas-based plaintiff, NICA, knocked out of the case, the Western Texas district is now the “improper venue” for a case brought by the remaining two plaintiffs, PhRMA and GCCA.

Ezra noted that in such situations, a judge can transfer the case to a court that would be considered a proper venue. But Ezra declined, noting that neither the plaintiffs nor defendants suggested a proper venue. And, even if they did, it likely wouldn’t matter, Ezra reasoned, because PhRMA and GCCA also haven’t gone through an administrative review.

“[T]he same federal jurisdictional defect likely exists for PhRMA and GCCA, as nothing suggests that either party has presented its claims to the [Health] Secretary,” Ezra wrote.

Ezra dismissed the case “without prejudice,” meaning the claims could be refiled. A spokesperson for PhRMA told FiercePharma: “We are disappointed with the court’s decision, which does not address the merits of our lawsuit, and we are weighing our next legal steps.”

Meanwhile, the first round of Medicare drug price negotiations is underway. Earlier this month, the federal government sent out its opening offers in the price negotiation process for the first 10 drugs selected. The bargaining will continue through the coming months, with an ending deadline of August 1, 2024. The prices will go into effect at the beginning of 2026.

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big-pharma-spends-billions-more-on-executives-and-stockholders-than-on-r&d

Big Pharma spends billions more on executives and stockholders than on R&D

bernie sanders, Bristol-Myers Squibb, drug pricing, Johnson & Johnson, merck, patents, PBMs, Pharmaceutical industry, research and development, Science / /

Greed —

Senate report points to greed and “patent thickets” as key reasons for high prices.

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Big Pharma spends billions more on executives and stockholders than on R&D

When big pharmaceutical companies are confronted over their exorbitant pricing of prescription drugs in the US, they often retreat to two well-worn arguments: One, that the high drug prices cover costs of researching and developing new drugs, a risky and expensive endeavor, and two, that middle managers—pharmacy benefit managers (PBMs), to be specific—are actually the ones price gouging Americans.

Both of these arguments faced substantial blows in a hearing Thursday held by the Senate Committee on Health, Education, Labor and Pensions, chaired by Sen. Bernie Sanders (I-Vt.). In fact, pharmaceutical companies are spending billions of dollars more on lavish executive compensation, dividends, and stock buyouts than they spend on research and development (R&D) for new drugs, Sanders pointed out. “In other words, these companies are spending more to enrich their own stockholders and CEOs than they are in finding new cures and new treatments,” he said.

And, while PBMs certainly contribute to America’s uniquely astronomical drug pricing, their profiteering accounts for a small fraction of the massive drug market, Sanders and an expert panelist noted. PBMs work as shadowy middle managers between drugmakers, insurers, and pharmacies, setting drug formularies and consumer prices, and negotiating rebates and discounts behind the scenes. Though PBMs practices contribute to overall costs, they pale compared to pharmaceutical profits.

Rather, the heart of the problem, according to a Senate report released earlier this week, is pharmaceutical greed, patent gaming that allows drug makers to stretch out monopolies, and powerful lobbying.

On Thursday, the Senate committee gathered the CEOs of three behemoth pharmaceutical companies to question them on the drug pricing practices: Robert Davis of Merck, Joaquin Duato of Johnson & Johnson, and Chris Boerner of Bristol Myers Squibb.

“We are aware of the many important lifesaving drugs that your companies have produced, and that’s extraordinarily important,” Sanders said before questioning the CEOs. “But, I think, as all of you know, those drugs mean nothing to anybody who cannot afford it.”

America’s uniquely high prices

Sanders called drug pricing in the US “outrageous,” noting that Americans spend by far the most for prescription drugs in the world. A report this month by the US Department of Health and Human Services found that in 2022, US prices across all brand-name and generic drugs were nearly three times as high as prices in 33 other wealthy countries. That means that for every dollar paid in other countries for prescription drugs, Americans paid $2.78. And that gap is widening over time.

Focusing on drugs from the three companies represented at the hearing (J&J, Merck, and Bristol Myers Squibb), the Senate report looked at how initial prices for new drugs entering the US market have skyrocketed over the past two decades. The analysis found that from 2004 to 2008, the median launch price of innovative prescription drugs sold by J&J, Merck, and Bristol Myers Squibb was over $14,000. But, over the past five years, the median launch price was over $238,000. Those numbers account for inflation.

The report focused on high-profit drugs from each of the drug makers. Merck’s Keytruda, a cancer drug, costs $191,000 a year in the US, but is just $91,000 in France and $44,000 in Japan. J&J’s HIV drug, Symtuza, is $56,000 in the US, but only $14,000 in Canada. And Bristol Myers Squibb’s Eliquis, used to prevent strokes, costs $7,100 in the US, but $760 in the UK and $900 in Canada.

Sanders asked Bristol Myers Squibb’s CEO Boerner if the company would “reduce the list price of Eliquis in the United States to the price that you charge in Canada, where you make a profit?” Boerner replied that “we can’t make that commitment primarily because the prices in these two countries have very different systems.”

The powerful pharmaceutical trade group PhRMA, published a blog post before the hearing saying that comparing US drug prices to prices in other countries “hurts patients.” The group argued that Americans have broader, faster access to drugs than people in other countries.

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Big Pharma hiked the price of 775 drugs this year so far: Report

brand name drugs, drug pricing, health, merck, mounjaro, Ozempic, Pharmaceutical industry, sanders, Science / /

up and up —

Meanwhile, Senate to consider subpoenas to force pharma CEOs testify on prices.

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Sen. Bernie Sanders (I-Vt.).

Enlarge / Sen. Bernie Sanders (I-Vt.).

Pharmaceutical companies have raised the list prices of 775 brand-name drugs so far this year, with a median increase of 4.5 percent, exceeding the rate of inflation, according to an analysis conducted for the Wall Street Journal.

Drugmakers typically raise prices at the start of the year, and Ars reported on January 2 that companies had plans to raise the list prices of more than 500 prescription medications. The updated analysis, carried out by 46brooklyn Research, a nonprofit drug-pricing analytics group, gives a clearer picture of pharmaceutical companies’ activities this month.

High-profile drugs Ozempic (made by Novo Nordisk) and Mounjaro (Eli Lilly), both used for Type II diabetes and weight loss, were among those that saw price increases. Ozempic’s list price went up 3.5 percent to nearly $970 for a month’s supply, while Mounjaro went up 4.5 percent to almost $1,070 a month. The annual inflation rate in the US was 3.4 percent for 2023.

The asthma medication Xolair (Novartis) and the Shingles vaccine Shingrix (GlaxoSmithKline) saw price increases above 7.5 percent, the Wall Street Journal noted. The highest prices were around 10 percent. For some drugs, the single-digit percentage increases can equal hundreds or even thousands of dollars. For instance, the cystic fibrosis treatment Trikafta (Vertex Pharmaceuticals) went up 5.9 percent to $26,546 for a 28-day supply. And the psoriasis therapy Skyrizi (AbbVie) saw an increase of 5.8 percent, bringing the price to $21,017.

Lawmakers’ responses

The list price is typically not the price that people and health insurance plans pay, and pharmaceutical companies say they sometimes don’t make more money from raising list prices. Instead, they argue that the higher list prices allow them to negotiate large discounts and rebates from pharmacy middle managers, whose revenue and dealings are opaque. Drugmakers who spoke with the Wall Street Journal attributed this year’s price hikes to market conditions, inflation, and the value the drugs provide. Overall, the tactics increase the cost of health care.

The hefty hikes come as the federal government is trying to crack down on the high prices of drugs in the US, which pays far more for prescription medications than other high-income countries. Last year, Medicare began, for the first time, negotiating the prices of 10 costly drugs. The negotiations were a provision of the 2022 Inflation Reduction Act. And a provision in 2021’s American Rescue Plan Act now forces drugmakers to pay Medicaid large rebates if their drug price increases outpace inflation.

But, it’s not enough to provide Americans with relief from high drug prices. On Thursday, Stat reported that Senate health committee chair Bernie Sanders (I-Vt) took steps to subpoena pharmaceutical CEOs regarding a Congressional investigation on high drug prices. Sanders invited Johnson & Johnson CEO Joaquin Duato, Merck CEO Robert Davis, and Bristol Myers Squibb CEO Chris Boerner to testify—but only Boerner agreed, and only on the condition that he would not be the only CEO testifying. The trio were invited to a hearing titled “Why Does the United States Pay, By Far, The Highest Prices In The World For Prescription Drugs?,” which was originally scheduled for January 25. Now, Sanders will hold a committee vote on January 31 on whether to issue subpoenas for the CEOs of Johnson & Johnson and Merck. If the committee votes in favor, it will be the first time it has issued a subpoena in more than 40 years.

All three companies have sued the federal government over the new regulations requiring them to negotiate prices with Medicare. J&J and Merck accused Sanders of calling them to testify as retribution for their legal action.

“You have opted not for the most effective way of securing information relevant to the Committee’s important work on drug prices, but for a broad-ranging public spectacle, with witnesses you can question on pending litigation you disagree with,” Merck wrote to Sanders.

Sanders called the two CEOs’ refusal to testify “absolutely unacceptable.”

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