Congress’ Committee on Oversight and Reform recently detailed a sweeping investigation into “skyrocketing prices of prescription drugs.” The Congressional Committee zeroed in on Celgene and Bristol Myers Squibb in what appears to be price gouging of the critical multiple myeloma drug Revlimid. They also found that Teva has been aggressively and consistently raising the price of Copaxone, a multiple sclerosis drug. With fresh testimony from senior pharma executives from Amgen, Mallinckrodt and Novartis, more reports are on their way. Key findings concern the public and include 1) drug companies engaged with pricing models that are just not sustainable; 2) the companies are employing at least in some cases questionable strategies and tactics to A) raise prices, B) maximize profits, and C) suppress competition; and 3) Pharma capitalizes on federal law presently prohibiting Medicare from using its leverage to negotiate prices directly with actual drug companies. What is the net result? “Pharma” (e.g. the biopharmaceutical companies) generates tens of billions in revenues, while enjoying gargantuan profit margins, which drives executive compensation programs that are described as “lavish.” There doesn’t seem to be any limits on pricing, the Committee finds.
These findings were recently included in a letter sent by Rep. Carolyn B. Maloney, the Chairman of the Committee on Oversight and Reform to Committee members announcing the release of a series of new staff reports. The announcement occurred in parallel with drug company CEO hearings with the Committee.
The Committee’s wide-ranging investigation was launched by Rep Elijah E. Cummings (recently deceased) right after he became Chairman in January 2019. In December the House of Representatives passed H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, to give Medicare the authority to negotiate directly with drug companies.
The hearings involving Celgene, Bristol Myers Squibb and Teva can be viewed on the Committee’s website or YouTube. For the staff report covering Celgene/Bristol Myers Squibb, click here. Click here for the Teva report.
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