• by Thom Forbes  @tforbes, February 27, 2019

Pharmaceutical CEOs came to Congress yesterday. Senators on the Finance Committee questioned them. The status quo of admittedly and unduly high prices for prescription drugs will likely live to see another day -- or many.

Not that political points weren’t made.

“When a lawmaker compares the way your company protects its profits to how Gollum protects his ring, you know it’s not going to be a fun four hours,” observes Olga Khazan for The Atlantic.

“That is how Sen. Ron Wyden of Oregon on Tuesday referred to the way the drugmaker AbbVie protects the exclusivity of its prize drug, Humira. The comment foreshadowed the way the Senate Finance Committee would grill seven pharmaceutical-company CEOs about a topic that has stirred bipartisan ire: Why, exactly, are drug prices so high?”

Wyden’s scripted comments aside, the headline on Bloomberg’s story asserts the drug makers “dodged a bullet.” 

“A highly anticipated Senate hearing on surging drug prices that was billed as a replay of a decades-ago public reckoning for the tobacco industry produced few memorable fireworks,” write Timothy Annett and Anna Edney. “Instead, what emerged was a broad recognition that the U.S. health-care system is complex, and that easy fixes are in short supply.”

The Big Pharma honchos “expressed deep compassion for patients suffering from disease. They decried high co-payments that shock consumers at the pharmacy counter. They denounced rebates they pay to insurance companies. But while they were eager to indict a system they said is badly broken, they declined to commit to lowering their own prices,” writes Christopher Rowland for The Washington Post.

“The CEOs from Pfizer, Merck, Sanofi and others were subjected to a ritualistic grilling. But the executives survived the three hours of questioning largely unscathed by deflecting blame for their list prices to insurance companies, despite an admonishment from Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) that he would not stand for finger-pointing.”

This is clearly an issue that’s not going away.

“The hearing marks the start of what is likely to be a prolonged bipartisan push to tackle soaring health costs that could extend far beyond drugmakers. Republicans and Democrats have been largely in agreement on the need to address an acute source of strain for many American families. The Trump administration has proposed new rules and approved a slew of new generic drugs, and has signaled openness to more ambitious changes,” write Bloomberg’s Annett and Edney.

“Committee chairman Chuck Grassley, R-Iowa, said Congress intends to respond to the drug price problem in a ‘measured and effective way,’ while New Jersey Democrat Bob Menendez, considered an ally of the industry, issued what he called ‘a friendly warning,’” the AP reports. 

“It's time to be proactive,” Menendez said. “Because if you don't undertake meaningful action to reduce pharmaceutical costs, policymakers are going to do it for you.”

Merck CEO Kenneth Frazier called pricing ‘complex and interdependent,’ and said addressing cost, access and affordability would require bringing ‘all the parties around the table,’” writes USA Today’s Ken Alltucker.

In a lead-up piece before yesterday’s hearings, The Wall Street Journal’s Jared S. Hopkins and Peter Loftus point out that a few companies have already changed their ways -- if selectively.

“Some, including Allergan PLC, have pledged to take just one price increase each year, and by less than 10%, while others have made similar proclamations. Companies increasingly are touting how their net prices are staying the same or falling. Last year, Merck cut the cost for some of its medicines and promised to limit its net price increases. Nevertheless, the drug industry continues to raise list prices on many of its medicines.”

They also continue to spend a lot of money to win friends and influence policy.

“According to a Forbes review of Federal Election Commission filings from 2009 through the end of 2018, PACs of [the seven companies that appeared yesterday] -- have contributed some $1.6 million to the campaign committees of 27 out of 28 current members of the Finance Committee,” Michela Tindera reports for Forbes. 

Sen. Maria Cantwell, D-Wash., was the exception. Wyden himself has gotten $78,500 from the PACs since 2009, and six of his colleagues have received at least $100,000.

“These donations make up only a small percentage of the total contributions pharmaceutical company PACs spend on elections. In 2017 and 2018 alone, Pfizer contributed over $2 million to federal election campaigns -- Merck and Abbvie both spent nearly $1.2 million,” Tindera adds. 

Pharmaceuticals/health products is the largest, by far, of the industry lobbies, according to the Center for Responsive Politics’ Open Secrets database. From 1998 to 2018, 403 Big Pharma clients spent $4,063,737,166 trying to sway opinions.