Transcripts For CSPAN Pharmaceutical 20240706

Alexandra robbins talks about the issues teachers are facing in the classroom today. She is interviewed by a staff writer. Logical tv every sunday on cspan and find a full schedule online or your channel guide. Listening to programs on cspan radio just got easier. Important trend congressional hearings. Catch washington today. Listen to cspan anytime. Tell your smart speaker, play cspan radio. Cspan, powered by cable. Pharmaceutical majors for being here. Onto think eli lilly i want to thank eli lilly announcing ac stencil reduction in list prices for some of their prices. Announcing a substantial reduction in list prices for some of their products. All over this country, people are saying enough is enough. They are sick and tired of paying outrageously high prices not only for insulin before other products as well. They want action and this committee will do what it can to respond to their needs. We need the help of the people on the panel to do that. As we gather today, i know we have some advocates fighting, we thank them for what they do. It is important to acknowledge the too Many Americans who died because they rationed their insulin. Alex smith was 24 years old and he dreamed of opening a sports bar. He is dead because he could not afford insulin. A 22yearold worked two jobs to support herself. She is dead because she could not afford insulin. A 20yearold already lost his home because of insulin, this young man is also dead. These are just a few of Many Americans who have needlessly lost their lives because of the outrageous costs of insulin. We further acknowledge the thousands who have ended up in Emergency Rooms or hospital beds suffering from diabetic ketoacidosis, a very serious medical condition as a result of rationing insulin. 1. 3 million americans in the richest country on earth cannot afford insulin. The committee today is convening for two major issues, one is personal. A couple years ago i took a trip to ontario with the busload of people. Windsor is a bootable town but that is not why i went. I went in order to purchase insulin in canada, which they were able to do for 1 10th of the price they were paying for the exact same product. I will never forget the tears coming out of a mothers eyes because she can suddenly afford insulin. What i promise them is they will not have to go to canada or other countries to purchase a lifesaving product. This committee is not only going to be dealing with the crisis in insulin but will do everything we can to end the outrage in which americans pay by far the highest prices in the world for every brand name Prescription Drug on the market. We end up paying the highest prices in the world. I want to know why there are americans who are dying or becoming much sicker than they should because they cannot afford the medicine that they need. These are the questions the members of our panel will have to answer today and in the future. 1 out of 4 americans cannot afford the medication is prescribed to them. The high cost of Prescription Drugs not only impacts the health of individual americans but the budget. If we paid the same prices, we could save over 1 trillion in 10 years. I know many of my republican friends are concerned. I share the same concern. 1 trillion over 10 years. Let us not forget that a vial of insulin costs less then 10 to manufacture. Someone correct me if im wrong. Meanwhile, we have increased the price 34 times from 21 to 200 and 75 275. No one has stopped them. They can charge any price they want. A company that has increased the product in every instance it is the exact same product. Lets be clear. This is a problem that is unique to the United States. Pbm has signed secret deals not with the lowest list price, but the ones that gave pbms the most generous rebates. As a result of a lot of public pressure, we have seen Major Drug Companies substantially reduce prices. That is good news. And we have got to ask some hard questions. If they can lower their prices, why are there still charging the American People 2000 for a drug to treat stomach cancer 200,000 for a drug to treat stomach cancer were in germany it is less . If a drug price can be lowered 75 , why are there still draw charging American People 12,000 . If they can reduce, wire they still charging over 200,000 for a drug purchased in japan for 37,000 . These are the questions the American People are asking. Why nearly half of all the new drugs now cost over 150,000. What world are you living in . Why does that happen with cancer drugs where it only costs a few dollars to manufacture, they are charging for thousands of dollars . Really . Do not have any values . We have a lot of work to do. Onto think the work being done on insulin. Want to make sure americans can afford. I went to medical school for a portion of my life. Diabetes was a constant but also the ability to afford the drug was a constant as well. These medicines are more convenient to take and have made it easier for the diabetic to manage diabetes. One i tip of the hat to you. The ability to afford insulin that may have occurred because if you cannot afford it it has never occurred. 100 years ago, diabetes was a death sentence. Not only do we have medical breakthrough. But we have had you come up with products that have made it easier for the diabetic to manage. We have had remarkable increase in the quality of life. Significantly reduces life sentences. Even with modern insulins and devices, two thirds of People Struggle to keep their disease under control. Not only with diabetes, cancer, alzheimers and other serious conditions. Lily invest 25 of our revenue which enables us to introduce new medicines. 19 alone with an and of with an antibody for covid. Just last week we shared results from a new study which followed billions of dollars in investment, decades of work and several failures that preceded it. Medicines do note good if people cannot access them. We have led the industry in helping people access them. We have brought insulin down to 20 a month. That was before recent announcements which will drive them lower. Lily has not raised prices since 2017, the year i became ceo. We have only cut them. In addition to the original brand, we launched a large branding when ursula when insurance was not working, we were the first to cap our insurance costs. I believe we are still the only company that will cap all of our insulins at 30 per month. This essay people with diabetes 185 million and nearly 100,000 people per month are saving. We have led the way inaffordability against the headwinds of Health Care System that can incentivize others for hire list prices. This allows for higher fees and rebate which can increase patients outofpocket costs while benefiting employers, Insurance Companies and people who do not use medicine. Even though it is identical to another drug and cost less. I brought both here. Not everyone has access to the lowerpriced drug. The list price for insulin over time gets a lot of attention. Even before recently announced price decrease, what we take home was about the same as when launched in 1986, accounting for inflation. Last year 80 went to pay fees for companies who did not invent , did not develop nor manufactured the medicine. This also supports about 4000 highpaying jobs with full benefits and pensions. We also contribute 25 back into rnd for newer and better medicines, including insulin. New and better methods are needed. Reforms must help people at the pharmacy counter while also incentivizing u. S. Companies to continue investing which leads to americans having more and newer americans than any other country in the world. We are ready to do our part and we are confident our solutions are simple and achievable. Thank you for having me. Thank you our next witness is the chief executive officer of the snow b. Senobi. Thank you for having me. This is an opportunity to dispel some misconceptions insulin is sometimes described as a 100yearold drug period much like the cars that bear little resemblance to the model t, there has been significant improvements. Senobi it is our imperative. Shirley after i arrived, we are able to focus our research and with best in class treatments. Today im very proud to announce we have positive results in c pod. If approved, it will be the first for those suffering from the disease in over a decade. With this immunization, the burden of rsv on providers and families may never happen again. Finally, we recently launched the first medicine proven to delay the onset of type one diabetes. And next 15 months, we will learn about other clinical studies. Each with the potential to become a first in class medicine or vaccine. This is why i am equally proud of the longstanding commitment to affordability. It will make medicines affordable through assistance programs, capping outofpocket costs by 35 to the uninsured and launching lowpriced versions of our insulins. This is not the first time we have offered a lowpriced medicine to the system. Each time these medicines have received very little coverage resulting in limited benefits to patients. The system is largely driven by the Financial Sector that adds rebates and fees to the list price. The list price is not the amount the system pays. In 2022, 80 4 of our gross insulin sales were returned to the system is rebates and fees. 84 cents on the dollar. Outofpocket costs have increased by 45 . The average amount is lower than when it launched in 2001. While competition is working to drive down insulin prices for the system, their savings are not reaching many patients. Why are patients not benefiting . There are three players in the system the cover 80 . These consolidated agencies, health insurance, pharmacies and Group Purchasing organizations. It gives these corporations near total control over products that patients have access to and the prices they have to pay third rebates and fee for receive are calculated. It is a percentage of the list price. And of the committee is actively looking at solutions. We welcome changes that will make the system work better at protecting the ecosystem that allows numericals to be developed. We have contributed in the past and are willing to do so again. It starts with a holistic approach that drives the systems preference over hire list prices. It requires rebates to be used to lower Prescription Drug costs of the pharmacy. Otherwise, i am worried the policy reforms will do little to help patients. Thank you, again. Thank you. Our next witness is the president and ceo of novook he will be speaking to us virtually from a belief denmark. Chairman sanders, ranking member, thank you for the opportunity to speak today. Our mission is to pioneer significant good pioneer scientific breakthroughs. We hope todays conversation will lead to meaningful action. I like to begin by briefly introducing myself. I grew up in a small town in denmark. My sisters and i help run the family farm. It taught me to take responsibility and work hard, not only for myself but others. Almost 32 years ago i went to work for a company in the netherlands and japan, thought to return to headquarters in 2004 period 2004. I know the deceased both personally and professionally. We are a company that keeps the patient at the center of everything we do. Our company was born between two danish scientists. When marie developed diabetes, the company embarked on a path to find a cure. Today, we have comprised of more than 50,000 colleagues worldwide. Just last year the Foundation Awarded almost 1 billion worldwide. Some of these projects are between industry and academia here in the United States. We are proud of our companys Financial Success and that it fuels the foundations of work. As we have worked to treat and cure diabetes for over a century, our lifework is often of repeated nothing further from the truth. 100 years ago patients were provided with little glass syringes to keep the needle sharp. Insulin had to be detected in and throughout the night. It saved lives but was eez easier to use. It may seem minor and insignificant to those of us with diabetes for many have meaningfully improve their lives. No matter how a drop may be, it can only help patients when it is affordable. No one should have to go without it because they cannot afford it. That should not be the case. We have worked hard to fill the gaps but we know that a lot of problems remain. We know there is often a misaligned system. A system where more and more dollars flow not to patients. We pay on average . 75 on every dollar of medicine to ensure that our medicines remain available to patients. Everyday we ask yourselves, what can we do more for patients . We can try to fill the gaps of a system that has left people behind. We provide a free lifetime supply of insulin, a longterm supply to those under the poverty line. That is 120,000 for a family. We supply insulin for patients to walmart and other pharmacies that are sold for 25 at one vial. We work hard to ensure that our programs help as many patients as possible. Now is the time for all participants to work for solutions that put patients first. Thank you. Thank you. We have heard from representatives of the three Major Drug Companies and now we will hear from the three major pbms. Our next witness is the executive Vice President , president of Pharmacy Services for cvs health. Thank you for joining us. Thank you. Thank you for the opportunity to discuss our work ok, thank you for an opportunity to discuss the work. We make things more affordable to help improve the outcomes heard our goal is to remove many of the challenges for our members. When people cannot afford their when people can afford their medications it means Better Outcomes and less hospitalizations. In order to make medications more affordable, our job is to go ahead with the manufacturers to discuss the lowest prices. The last few years have been challenging because of constrained household budgets. Over the last five years prices have increased at a rate of 7. 4 . Over the same time, the pbm industry has helped clients hold to 7 and member at 1. 4 . We have reduced patient costs with outofpocket costs below nine dollars. Today it is important to note that nearly 95 95 are generic. By using competition and generic prices, they have been deflationary over the last decade. Now we are securing affordability for the last 10 of namebrand drugs and that is our focused. We use competition to deliver discounts to our customers. By negotiating rebates and discounts, we lower prices where competition exists. I, many drugs without competition are many of the high list rices and account for must much of our client spending. We encourage the committee to focus its efforts and we support the three bills that the committee will consider in this market. Drug manufacturers complained that rebates are the reason but the facts show otherwise. Study after study show that price increases are not the result of rebates or discounts. We know there are questions about the level of transparency we provide to our clients the trust of our clients is important to us and is built on transparency. Transparency starts at the beginning of our process and is a cornerstone of our approach throughout the period clients negotiate transparent contact contracts in detail to understand how things are spent. We understand what transparency brings to the marketplace and we surpassed nearly 90 we passed nearly 98 back to our clients. We also provide them detailed updates. Our clients choose how to use those discounts or rebates by either reducing outofpocket costs and or delivering lower overall premiums at the pointofsale for the medications. I begin by highlighting the importance of adherence and reducing complications. This is why we create and maintain preventative drug list. This allows our clients to offer members zero dollar copays including insulin and many other educations medications. We want our to the 200,000 employees to stay healthy period we have made tremendous progress by inducing competition and encouraging the lowering of outofpocket costs for members. We have reduced the insulin cost on average 7 for the last few years. At cvs caremark, the average cost for a 38 supply was less than 25. For those using the preventative drug list it is zero. Weve also launched a program for uninsured and underinsured patients providing insulin at just 25 vial. We provide pharmacy benefits to over 110 Million People and are improving their health every day. We will continue to improve and innovate on our model to help clients provide affordable coverage for members that need to stay healthy. I look forward to answering your questions. Thank you very much. Our next witness is president of express scripts period scripts. Thank you for inviting me to testify today. My name is adam. I grew up in missouri outside of st. Louis and began my career at a regional pharmaceutical. Im proud of our work to deliver Affordable Access to lifesaving medications. I was diagnosed with stage iv melanoma in my early 30s. That experience strongly shaped how i approach our work to advance pharmacy care and lower drug costs for patients and employers. As a Business Leader i am guided by my experience as a father, cancer survivor, american. We believe all patients should have access to the medication they need at affordable prices. For decades we have taken on one of the toughest challenges, negotiating manufacturers or lower costs. We exist to help solve the challenges you are exploring here today. Our company has been at the forefront of introducing solutions to address the insulin crisis. We announced a program to capping insulin costs at 25 or less. These lifesaving medications have also been extended for Additional Savings for cardiovascular diseases as well. We are constantly evolving and improving our services, this includes working to shield patients from high costs and provide multiple transparent contracting options to ensure our clients have control and flexibility to choose their benefit design, network and pricing structure and are provided robust disclosures. Our solutions were driving lower drug spending are working. Each year express groups saves more than 30 billion for employers, the Public Sector and the patients we serve. This is driven by effective drug negotiation and a targeted clinical support program. The savings are passed on to our clients at their direction which benefits americans with lower premiums, reduce costs and expanded coverage. Savings help keep outofpocket and average costs less than 15, less than 18 to patients on med plans and less with medicaid. None of this means the system cannot be improved. For employers, restrictions prevent lower costs for patients before meeting their deductible. Rebates have been characterized by some as the mechanism for list prices and increasing costs for patients. This claim is false. Rebates are discounts that we negotiate to lower prices. More than 95 of our rebates are passed to express trips express scripts clients. Without the ability to use this negotiating tool to achieve lower drug costs, healthcare care spending would be much higher. From competition is what drives rebates, lower list prices and that cost. We applaud recent efforts to use the system that works to the late competition and maintain drug prices. We recognize there are prices for pharmacy benefits services. Express express groups are committed. We provide robust disclosures with provide information on rebate, fees and pharmacy claims. We strongly caution against limiting contract options entirely. These are options, not mandate that are serving many of our contracts many of our clients today. Overall, our beliefs, our Business Model and our orientation is geared towards providing solutions that enable access to medications at affordable costs, providing clients with choices to enable them to Affordable Health benefits and providing additional levels of transparency about the value we create. Express groups will continue to address drug prices and respond to the needs of patients. I appreciate the need to address the important subjects raised. We look forward to questions. Thank you very much. We have our final witness, chief executive officer of rx. Thank you for being with us. German sanders, ranking members of the committee, good afternoon. We provide essential services to our customers, employers, unions, health plans and governments. Our team worked every day to make Prescription Drugs more affordable and improve outcomes. We provide evidencebased review , negotiating with pharmacies to bring down the costs of drugs, provide tools to help consumers and their providers use their benefit and find the lowest cost options. Our customers pay for the medical and pharmacy care for employees and patients. They hold discretion in raising and setting prices or products. We hold them accountable for savings, lowering Health Care Costs and ensuring that people have access to medications that they need. Overall, we deliver 6,000 in annual drug savings per person to our customers. 98 of our negotiated discounts are passed directly to our customers. We use these discounts for premiums, pointofsale savings and investing in health and wellness. Without our negotiations, the cost of drugs would be even higher. Pbm saved the system annually. People need consistent Affordable Access to insulin. Since insulin was the discovered it has saved countless lives. Over the last decade, manufacture prices have nearly doubled. Long with leadership from congress and others, our company has been on the forefront making insulin more affordable. We provide pointofsale to ensure customers since 2018. Since 2019, the amount of customers has increased by 34 . Millions of people now have access through our preventative drug list. The 8 Million People now pay nothing outofpocket for other lifesaving drugs. In working with sin ovi the standard offering we recommend caps insulin outofpocket at 35 and supports affordability for patients with High Deductible Health plans. Our 1. 7 Million Consumers now pay on average 22 per month and our efforts are ongoing. We welcome the recent announcement by the three largest insulin manufacturers to lower their prices. We support and encourage lower list prices across the board. More can be done. It is capped at 35 from medicare. It will help close the gap for americans who cannot consistently afford insulin. Such a cap must preserve the ability to negotiate for lowest cost for customers. Even with the welcomed list price reductions, the list price is still above 35 per prescription. Beyond insulin, broad reforms are needed to foster competition and make Prescription Drugs more affordable for americans and sustainable for our country. This includes closing loopholes that enable pay for delay and other delay tactics. A tenure cap on a products exclusivity should be established regardless on patents. Public policy should support more value based situations to make sure they are focused on Treatment Options that deliver the best outcome for patients. We appreciate the opportunity to speak out. I welcome any questions you may have. Thank you very much. We are not going to begin questionings. Let me start by saying, if someone in the real world is watching this hearing, they have heard every Single Person from the drug company except pbm sector. We are working tirelessly to lower prescription costs. Yet, 1. 3 million americans are rationing their insulin. People have died, people end up in the hospital. All over the world, people are paying a fraction of the prices not only for insolent before other products, drugs, then we are paying. I would appreciate very brief answers. We do not have a whole of time. We start with eli lilly. Since 1996, eli increased the price of you know log 34 times from 21 to 200 and 75 275. Im told it cost five dollars to manufacture this product. The story is not different or products produced by senovi. My question to you and other companies, we commit to this committee today that you will not increase the price of any insulin product again . Thank you. As has been mentioned, we have not increase prices since i have been ceo. Im comfortable saying we will leave our prices as they are. On all of our markets . We have been cutting them. We have said before, we have a responsible and sustainable pricing approach. Net prices continue to fall in the net price is lower than it was when it was launched in 2001. Im hearing from you the you the will not increase the price for any insulin product again . To repeat myself yes or no will be the better answer. We have a responsible price listing. Thank you. We have committed to limiting potential price increases to a single digit. We have not taken many for several years. We see doubledigit decline in the past six years. Our price and i is lower than when products. All three of you have brought forth new products to the market. All of these Insulin Products still cost more than 300. Will you commit to doing to those products what you have done to your other Insulin Products in substantially reducing the price of all Insulin Products . Will you make that commitment . We have capped the cost at 35 for every lily insulin. That means, i may be mispronouncing it loom jeff. That is 35 . The patient will pay no more than 35 in the United States for that product. Next . Is equal to us that would be less than 35. Our most recent launch was atlantis at less than 60 that was not accepted by the system. And . I can also confirm that we have affordable insulin below 35 for patients if they want. Let me ask pbm, it is a simple question and i would appreciate a yes or no answer. We commit today that your companies will put Insulin Products with the lowest list price . We will commit to put the lowest cost product on our formulary. Weatherby whether it be lowest or highest, our job is to give lowest cost product. Dr. . Thank you. We will commit to putting the lowest net cost on formularies. We also have other formularies, other choices for our employers to choose from which have lowest list prices also available. We offer multiple list prices to our employers. We commit to always providing the lowest cost option. Other products are available to other formularies. Thank you. He lay charges for a stomach cancer drug. The same drug can be purchased in germany for just 54,000. Will you commit to lowering the price in the United States for the same price youre are selling it at in germany . Respectfully, that product has been on the market for a while. The price will fall. When it occurs, i am sure there will be competition. Your tommy American People have to pay four times more for the product you manufacture you are telling me that American People have to pay or times more for the same product . Ok. 30,000 a year for senovi, which is sold at nine times as much. Will you commit to lowering the price in the United States to 30,000 as is in france . You will see the price for. So the answer is no . I hate to interrupt, you are now at seven minutes. Does every member have that . Yes. Six times more, you charge six times more for americans. Will you reduce the cost in the United States to what is in denmark. We pay 75 in the u. S. We actually see our price going down yearoveryear. We are looking at a lower price already. So the answer is no. I defer to senator paul. The great thing about capitalism is get the largest supply at the least cost when you allow capitalism to function. Capitalism does not function very well in the drug market because the government has been involved for a long time. Prices need to be based on supply and demand. A publicly traded company to promise to base their prices on bullying from a politician would be in breach of their fiduciary duty. It is actually illegal they are identical, and in that case, you would be paying 25 out of pocket either way. Lowered the copay the Less Consumer cares about the price. So you can mandate over and lower copays so you might get the opposite. You might drive consumers toward something that is actually very expensive. Under obamacare, we made Birth Control have no copay. But there is no copay for Birth Control but if you look at the price of Birth Control as it became free, the demand became enormous or greatly enhanced and so the prices went up between 2013 and 2019 you had a threefold increase in the price of Birth Control. The most important thing is we think things through. If you want to mandate lower prices for things you might get the opposite. Because you are taking away the consumer from the equation. The consumer is only involved in prices through the deductible. Much of health care beyond that. And so how do we lower prices or prices for drugs . People hire an intermediary. Does anyone hire you, businesses labor unions because they want higher prices . Absolutely not. Enter. Senator. If you raise the prices would they do it on their own . We exist in a highly competitive market. We deliver value that we commit to to our parent to our clients, they would certainly go elsewhere. Why do people hire them, no one is forcing people to hire them. As i understand, the companies here represent tens of thousands of businesses who come and hire you. And they pay you and you make a profit. Your profit is it exorbitant , is your profit better than the drug company somehow . Our profit is or percent, near what we provide. Im surprised we dont have walmart here today to beat up on walmart. We need to be rational about what we are doing. This spread pricing. The terrible spread pouncing spread pricing, do you offer spread pricing and passthrough pricing. Yes, we offer both options to our clients, roughly one third choose spread pricing and two thirds choose another type of model. Some choose spread pricing to have predictability, we shield them from incremental cost because we provide a lock on price. Which is more enticing . It is not about the type of pricing we offer is spread pricing cheaper or more expensive than pastor pricing if im a customer then pass through pricing if im a customer . Will be roughly equal in price and cost. You are of referring to spread pricing where one client plays one price for all of adjudicated. It provides accountability, and offers control price it can be less expensive that if they pay every claim on a pastor model, but both are offered to our clients. A passthrough model but both are offered to our clients. Spread pricing is less expensive than passthrough pricing, so we are going to ban the cheaper form of buying your drug insurance. If you buy the cheaper form, you might get the opposite result of what you are intending. You might get higher prices. Not that we should be in any of those but is there a price that you could is there a possibility that you could ban spread pricing, and then shareholders are legally bound to make a profit. They will need to make a profit somewhere else if they are going to police the stockholders. We havent thought this through. Im a grade, everyones angry. We are im angry, everyones angry. Why is it different than electronics, why is it different than buying a car, why is it different than a lot of expensive things, because we made it opaque through all of these Different Things that weve mandated. In the 1930s we passed antitrust laws and we made it illegal to passthrough discounts based on volume. And then we had a court case that you had to move up market share, complicated things to get these rebates. But in a free society, rational thinking, labor unions and businesses and Health Organizations are choosing a pdf pbm. If its gouging why wouldnt they go to another . Theres 70 some odd pbm. And we have in our heads that we are going to ban this. So what happens to that . If you have a 25 copay, and a hundred dollars q malign hugh malone. Mi and i have people who are diabetic in my business. Might focuses on the lowest net cost of the product. Thats were refocused most, all insulins are not created equal. Lets say that they are equal, license part 100 bucks and you get a 75 rebate make it 25, which is equal business into what youre selling your plan to. But does that mean you are excluding from a list . Is it working to exclude the cheaper, is my question. Are focuses on where the lowest net cost is available. There is a possibility of this. And thats where one might complain. However, they are still giving you the lowest net price. If you say, the generic i would rather the can the generic, it outside of what the negotiation is and thats the only way of make a difference to the can tumor. But i think in the long run as we look at the net cost, it is still what we are looking at. So the net cost and list price mean absolutely nothing, the same way they mean absolutely nothing in message medicine, we have this complicated thing, we got it from antitrust laws in the 30s. As we got it from it court case based on antitrust laws in the 90s them and we are going to unravel the complications on market, we are asking to ban certain contracts. So i think, it what you will have in the end is you will have the unintended consequences of doing something, trying to do something to make things better than actually trying to make the situation worse. Senator baldwin. Thank you, mr. Chairwoman mr. Chairman, think you two are witnesses today. In preparation for this hearing i was reflecting back a few years when this committee had held several hearings on drug prices. We had panels, not totally unlike the one we had today with representatives from pbm. Representatives from Drug Companies. And a lot of fingerpointing. And i remember a few weeks after those hearings, having the then secretary of ahs in front of us, who was formally asked to see aided was formally associated with a Pharmaceutical Company. And i was reading a letter that i got from a constituent. A father and two sons both with juvenile diabetes. He was talking about, just how much the family had to spend each month to keep his sons healthy. And at the end of sharing that letter, i said to secretary ava. What should i tell my constituents about why these costs are so high . He said, it is complicated. Thats when he said. Its complicated. Thats what he said, its complicated. Thats not an answer i can provide to make to who are struggling. And opaqueness and lack of transparency, i find it basically an issue of the industry not being transparent. When i asked questions like, helped me follow the dollar. If you doubled the price of a drug, helped me help me figure out who is pocketing the extra price. And i get, its complicated as an answer. If we are going to have good policy we need to have more transparency. Thats why im glad this committee is working on measures to achieve that. One thing i can say when it when we look at people versus profits is that greed is not complicated. Prescription drug manufacturers tell us that they invest significant resources in research and development. Pbms tell us that that they invested significant resources in making drugs affordable and accessible to patients. But both industries are also working overtime for profits and self enrichment. Mr. Ricks, yes or no. Did eli lilly conduct a 1. 5 billion stock buyback in the year 2022 . I believe that that is approximately the number. Senator mr. Joyner, yes or no did cvs health conduct 5 million in stock buybacks in 2022 . Im not sure. Senator if i have the consolidated Financial Statement in front of me that indicated such would you agree that thats the figure . I would. Senator dr. , yes or no, did express scripts parent company, cigna conduct 7. 6 billion dollars in stock buybacks in 2022 . I believe thats accurate, senator, yes. Senator yes or no, did unitedhealth care who owns optima rx conduct 7 billion in stock buybacks in the year 2022 . That is correct alongside unitedhealth group. Yes or no . Did conducted 24 billion in danish krone worth roughly, 3. 6 billion of this taiba backs of stock buybacks in 2022. I believe thats approximately correct. We will award money back to social and scientific purposes. Mr. Hudson, yes or no did snow feet conduct 497 million euro of stock buybacks in 20, roughly equivalent to 55 million u. S. Dollars. That thats correct, senator. Senator thank you. We are taking, mr. Chair, steps in the right direction, mr. Ranking member in the legislation that we will be working on tomorrow and this Committee Area and i am hope that we are able to typically tackle insolent prices later this year. We cannot ignore the Business Practices of the companies that have come before us today. Part of what how we tackle drug prices relates to that need to get transparency, and the need to take on the aspect of greed. Thank you very much, senator baldwin, senator cassidy. Senator i agree with my colleague senator paul about the paradoxical increase in rebates. Looking at your testimony. I noticed you were not as, you hesitated if you as when asked if it was cheaper to do spread, looking at your testimony on page 20 you speak about your past through pricing models and you said that clients pay exactly what express scripts pays for prescription in this model. Clients receive 100 of the drug rebates that express sprits get. And clients pay one simple fee. When ended, the Pilot Program from 500,000 people was a 12 total medical cost reduction. On hundred 93 in savings from closing Critical Care graphs Critical Care graphs gaps. Patients were previously non adherent to their medication where adherent when coached through counseling and medication. Its clear from your testimony that banning or not using scripts actually decreases costs by 3. 5 . But i think it raises the issues about what is actually in the spread. Mr. Joiner, can you tell us on those contracts in which you have spread pricing what is the spread . I dont know the average spread per clients but it varies based on the network. Senator, i dont have the exact amount of where approximately. Senator i cannot speak to the specific claim, some planes some claims, we passed through 98 of the discount. I dont mean to be rude. I appreciate what youre doing. I have an article that was sent in today by the first author matt ealing. About high utilization of generic drugs for Medicare Part d. The spread here, medic cart Medicare Part d saves an average of 22. 3. 80 went to the pharmacy. Two dollars went to the wholesaler. Six dollars went to the manufacturer and 41 percent are nine dollars and . 18 went to the pbm. That was their spread. This is generic drugs and Medicare Part d. Its a good spread. 41 of all generic prices are going for spread pricing. I spoke to someone but i dont have an academic article, i was spoke i spoke to somebody in i agree with senator paul. It should be transparent, we have a 3. 5 percent decrease if we just pay a fee . I wouldnt they do it . We have heard from manufacturers from employees sponsor. They have a hard time getting this. In your testimony, you said that a Third Party Auditor can look at this, but thats a Third Party Auditor for fortune 500 companies. For the local 200 people employed, they dont have those assets, so im told. It will more likely be fully insured, and the fully insured product no its eight dollars and . 50 per paid claim. Medicare part d is a nine dollars something spread, and it is and here it is purely a claim of 3. 50. From your data and anecdotal data, employer is doing better, and itll be difficult to figure out with the smaller employer. Mr. Joiner, or one of you, i apologize, in your testimony you spoke about how the average person in a High Deductible Health plan only pays 18 and . 50 18. 50 for her prescription. But we know that health plan you have an initial deductible of 3000 and over the course of the year you have continued drug spend. So its unclear to me is that when you are paying list price for a drug, not insulin because apparently youve done a good job on some of these drugs. I think ive spoken to you about how you lowered it. That hats off, thank you. But for other drugs they are paying the full list price. It may be 1860 on the average 18 six descents on average, but at the end of the year they pay a lower price. 74 percent of employees nationwide are in High Deductible Health plans. What in the average cost of the drug would someone list price of a drug that would hurt someones deductible. If its 1860 on the average for the year when shes on her deductible, thats where i have a concern. And thats where if youre Insurance Company knows where the deductible is. And now she is going to have to pay full rate for that because the rebate does not pastor her. And it is a fully operative. She is paying full rate. Do we have a sense of what that cost is during that period. Mr. Joiner . I do not have the exact average, but i will say that most of our clients, will understand that the first dollar they need affordable benefits. And for many cases, members are paying zero. And then they can choose for discounts through the pointofsale. Do you have a number of patients that would do that relative to its a meaningful number. 10 million employees who have high deductible plans would get a pointofsale rebate . Yes exactly. On average are average insulin cost per month. In general. The average outofpocket expense is less than nine dollars a month. Im talking about specifically i understand. Let me ask you Something Different. Is that net of expenses, i assume it is . Roughly 4 . I know theres a lot of integration where theres a rebate aggregator and others are performing analytics, but they all operate within the shame within the same Insurance Company and property manager. If you pay the qac for whatever they do, it may are you subject subtracting a business expense, we dont include that in the margin. Senator, for and often group affiliated purchasing association it does not define anything. Is your margin never that . Net of all of that. It is of everything. Senator. Thank you, to my colleagues i have good news for you. In virginia theres a Company Called civic of. It is a nonprofit Pharmaceutical Company that has taken over my pharmaceutical manufacturing and reopened it as a nonprofit. To bring low prices that most transparency to Prescription Drugs. Last year, affordable and still in products that are interchangeable with the insulins on the market will be available for 55 per pen, and a price that everyone can count on. Im grateful that this Innovative Nonprofit has afton and increased competition in the market. And sure people have access and bring more transparency. I would like to ask to my pbm representatives, will you commit to honoring such lows low cost voucher with chair one product with low copays. We are open to opening two any drug with the low net cost. I cannot at that time tell you what employers and doctors decide. Senator, we and 2020 have the cost of insulin, and in partnering today, we saved patients more than 18,000 with that solution. And now we are offering a free copay design which will have a specialty five dollar. All of the things we talked about to lower the cost of insulin i want to be clear, is any insulin offering, that is clinically effective, can be delivered with support to her patients at scale and is available, list price or net price as long as it is the lowestcost ended competitive and its offered. Let me move to might pharmacy execs. I had a question, ive heard so often from pharmacy from Pharma Companies that you tried to develop a lowcost product, that you offered to patients but the pbms turned you down, that they delay you have access to the system, and ive heard many in your industry say that they would prefer products with high list prices because they gather fees and the feeds are a percentage of the list price. Not the net price. If im right about that, when dr. Paul said, it is senator paul says it is meaningless to the patient, i dont think its meaningless to the industry because i think that pbms get a negotiated price even when the list price is much lower. We talked about a lowcost insulin product that was quote not accepted by the system. Thats too opaque for us to understand what you mean by that. Could you go into more detail what that means a lowcost insulin, that you want to provide to patients but it was not accepted by the system . Weve been around for 20 years, and weve tried to bring lowercost alternatives last year in august, we launched a brand main in the same factory by the same people with a 60 discount to the lowest price. It was just not listed on the health plan. What was the reason for that . Its difficult for me to be precise because im sure that the conversation is between the pbm and the health plan and not me and the pbm. We try to bring a much lower cost. A much lower price, but there was a rebate associated with that weve heard theres all kinds of Competition Among pbms, you couldnt find any major pbm that would have it dramatically lower list price . Can i ask that mr. Ricks, and mr. Jorgensen, have your companies had similar experiences whether its insulin or Something Else about bringing a pharmaceutical edit dramatically lower list price that has capacity to help people and be told that no, these would not be available on formularies. Id like to go to mr. Ricks first and then mr. Jorgensen. I brought two boxes of the him along products. They are made in the same factory by the same hardworking people and after four years, the product now cost 25 and its available on about one every three in america. Its clear that the lower price if its a higher list price, the pbms to make the decisions, they like the higher list price better than the lower list price . Of the market share, poor performing. Mr. Jorgensen how about your company, do you have a similar experience . Yes, we have a similar experience, and we have one third that you told why the lower list price offering is not being accepted on formularies by pbm . Mr. Jorgensen. Im not aware of that specifically i could say that in general, we have rebates that going to the pbms, and i know that they dont decide on the price, but there is a triangle where the patients pay more, we pay more in rebates and in the middle of that so all three of our Pharma Companies who are here today have had the areas of trying to put drugs with lower list price is out available for patients but been told that they would not be honored on formularies . If somethings on a formulary it doesnt need to be the product is choice and, but its not even getting to the formula . Do you collect these based on a percentage of the list price of the drug . Or a percentage of the negotiated actual price of the drug . Every client contract is different but generally you either have 8 00 p. M. P. M. Or collectively manage the p. M. Bm pbm or collectively manage you dont have any Fee Structure in your company where you collect a fee based on a collection of the list price . We certainly have a few. Do you have do you collect fees based on a percentage of the list price of drugs that are on the formulary that you engaged . Senator, we have a mix of both where some of the percentage fees, some are flat fees but would been on the record before we welcome manufacturers to continue to lower their list on all their products, not just on the products that theyre bringing out that are copies of other products, for them to do that for years. I yield back, mr. Cheer. Sen. Sanders senator collins. Senator thank you, mr. Chairman. In 2018 i chaired a committee on why the cost of insulin was so high, and mr. Chairman, one of the witnesses was a father from maine was going to canada to get insulin for his 10yearold son. What we found was a system of getting insulin from the manufacturer to the customer that was rife with the perverse incentives, convoluted and opaque, so opaque that the witness that we had who had done the studies on the systems could not fully explain the chart. So i want to put up a chart that shows insulin list price. Which is the top line, versus net prices from 2012 until 2021. Starting with you, mr. Ricks, i want to find out where the money is going in that gap between the list price and the net price over nine years time. And as you can see, it is gotten bigger. You testified that, i think it was . 80 per dollar, doesnt go back to the manufacturer, . 84. So similar. Explain to us who get that money. Because i can tell you, it is not for the most part, going to the consumer at the pharmacy counter. Mr. Ricks. Its a good question. I can explain much better with the cost is. From that theres our revenue, we make the product and pay to distribute it, and the difference, our concession makes an pricing negotiation with large payers like pbms here today. I think you can ask them how that gets redistributed in the system. Mr. Hudson . Thats a complete answer. Its the same for me. And mr. Hudson, you would agree that this money does not find its way in most cases to the consumer at the pharmacy counter . Over the last decade, the list price increased over 50 but the outofpocket expense, which someone was paying in the overthecounter has increased 45 . Its on average not making its way to the counter, the person who is trying to make the choice to go through. I think we have a strange system here because to say the least because most of us would think that the rebate, the discount that is negotiated by the ppm would largely benefit the consumer at the pharmacy counter but in fact it goes to the pbms themselves and it goes to the Plan Sponsors. That could be an ensure that could be a Large Employer but its not making its way down. So the insurers will tell you that we use it to moderate rates and keep rates lower for everyone. The problem with that explanation insurance is based on the principle that the healthy are subsidizing the sick. What were doing is trying this on its head. So in order to lower the premiums for the healthy, we are not passing on the savings to the sick. Mr. Rick, would you agree with that . I agree that happens frequently, and i think the high deductible phase in particular for patients where theyre exposed to full list pricing is in a normans difference between what they pay and what the system pays and that creates a surplus in supporting premiums or other things. So i want to ask our three representatives, mr. Joiner, who owns your pbm company . Cvs health. And it is there a connection also to at night . The large insurer . Yes thats right. Doctor who owns express scripts . Senator, the cigna group owns express scripts. Another large insurer correct . Yes health care. And i apologize. If ive mispronounced your name. Another, a note another Large Employer and insurer. To me, this is an example of the systems incentive. If you are in fact negotiating for your client. You are negotiating for your owners who are all large insurers, for other Plan Sponsors that are Insurance Companies. For large selfinsured employers. But youre not in youre not negotiating for the customer. Because its not up to you what the people who hire you or for whom you work decide to do with that discount, they could pass it on, but the evidence is overwhelming that they do not. I want to go back to an issue that senator kaine raised, the difficulty similars have in getting onto the market and getting chosen by a ppr formulary. This doesnt make any sense whatsoever to me if you care about lowering prices. Mr. Hudson, senator kaine talked about when you come up with cheaper than branded product, you cant be chosen. Its not just you. Even when a competitor comes up with a bio stem alert that is way cheaper, and i would use theatrics as an example, which came up with insulin which was 65 cheaper than lantus. It couldnt get on the formulary. So it takes the same product three relaunches it at only 5 lower and guess what, it gets chosen. Senator hickenlooper. This is one of the most amazing hearings that ive heard. It reminds me a long time ago when i used to be in the restaurant business, 30 years ago at an Italian Restaurant we worked very hard, sometimes you would barely make you cannot balance the budget at the end, youd have to go through incredible contortions to in business. And you would get frustrated and you would doubled prices of everything at the Italian Restaurant. Doubled the prices. Within three weeks per people coming into his restaurant almost doubled. He just doubled the prices. That shouldnt be the case. Thats an aberration of capitalism as senator paul would say if he was here for sure. But thats what we are seeing here, a case where the higher the price, the more likely the Pharmaceutical Company can sell the product through the pbm system. So i have a couple questions. The . 84, that means it . 16 saved anywhere between 16 and . 20, roughly in that range, and i guess we should go down the list of the and just say how much of the rest of that is with the pbm . And how much of it goes on hopefully, eventually to some of the consumers. Lets start with you. Today we passed through more than 98 of all of the rebates to our customers and 100 to medicare. So it goes straight to the customers . Yes the employers the unions, the government, etc. I shouldve had senator collins caper poster up. Thats a big space. Thats an awful lot of it doesnt seem like its going to the consumer, which is that bottom line. Right . I think its a perfect example of pbm competition, we saw the price of ration, it was at the point in time when we had more than one product. And so the result was a defining cost for our customers while the manufacturer was increasing pricing. We are going through 98 of that value over the last few years. And we will invest in outofpocket expense copays. Got it. Senator, for our commercial employers, our labor groups are health plans, and public sent sector entities we passed back 95 presented 95 of rebates. The lights list price goes up at the height weve asked for years for them to lower their list prices you no one made them increase their list prices, they made the decision on their own. And in the Italian Restaurant in boulder colorado, anyone in that position would have a difficult choice. 98 of the value of the savings that we negotiate its passed to our customer. They do use it for customers like vizio zero dollar outofpocket that we saw, and we always recommend that dollars are used to protect the patient through things like the high deductible which would provide for lifesaving drugs and for disease. I was puzzled when i went home last night because as i lifted this it became more puzzling. As i looked into this, it became more puzzling, but it became symbolic of the whole Health Care System, the trouble we have. And this is just googling so might be out of date. But if you look at fortune 500 fortune 100 the fortune 25 cvs is number four in the country. United health care is number five, and asked us scripts, you guys and cigna is number 12. Three out of the 15 largest operations in america all significantly, in this spectrum which i find puzzling because the top 20, there are eight companies that are health related, im not sure if you would say walgreens is health care or retail. But the math seems inconceivable that these companies could be that large if they are pushing 90 through to their customers, that they would be able to do 7 billion stock buybacks. Mr. Hudson, at one point you said, or someone has said that he felt that you were the canaries in the mineshaft. Is that some reflection of the situation . What ive mentioned before is that when we used the savings and reduced pricing by 60 . We wanted to see if the system would pass that on the lower price to patients. We recently reduced the price again. And we have some anxiety that it wont make its way to patients, that patients may be taken off. The more you lower the price, the last patient you achieve. As chairman synder said, we in this committee might look again in a year and see if its impacted access of affordability. Its a key question. When you put the price down, 21 a vial. That should change what is available and what patients pay. And if you come back in one year and nothings changed, i have to say, the system is not working. That is for sure. Lets ask all three of the pharmaceutical companies the same question. If you, and you know what your price is. Do you think you will have gotten your profits through more customers a year from now . Mr. Ricks . I think there is a risk to lower our prices, one that was worth taking. We are happy to independently follow that. But we want to make sure that we can stay on formularies and available. Fully we will availability hopefully we will increase availability. I hope we will have better access to lowprice insulin. What is your sense of that . I agree. I think we spend a lot of time talking about pricing. Its really what money makes it more affordable to patients. If one years time or patience can have more affordable insolent, it was worth doing. Mr. Jorgensen im going to assume you are of the same mind . We do not know yet whether we will have access or the patients will have access. What the net price off of discounts today is lower than what we offer for the product. Im out of time, but i think we can challenge the pbm representative, you are part of the floor fifthlargest into the 12 largest and the 12 Largest Companies in the country, we can resolve this issue. Thank you mr. Chairman. Ive been wrestling with this issue across the board for at least 15 years prior to coming here. I actually did something about it in my own company across the board. To make things work for my own employees. That occurred in about 2008. And i was sick and tired of hearing how lucky we were through our Insurance Companies that it was only going up five or 10 every year. And earlier we talked about free markets, he and i are in agreement, mostly, they tell you what free markets have in common. The less it is entangled in government, like this businesses, even more so than most industries. There are barriers to entry. Robust competition, full transparency and the most important one, the consumer. The consumer has no skin in the game as its currently constructed. They either want remediation which is an inelastic demand. You have you at you are tickly ill or have a bad accident they wanted done mostly, they wanted done immediately and paid mostly by the government or their employer. It is about far from free enterprise. Its an unregulated utility and youre part of it. When i first started looking at it, hospitals were about 30 of the health care dollar. Practitioners were about 3030 5 . And pharma was 15 and insurance was 15. Insurance and pharma has not changed a lot even though insurance becomes disproportionately more impactful in terms of keeping the whole system glued together in a way that it is. Sadly, hospitals have grown to mostly 45 of the health care dollar simply because so many practitioners it would be like losing farmers and agriculture. Are not even wanting to get into the business like they used to. It used to be not only the product both, but they want to have their own business. They are increasingly being employed by large corporate hospitals that all play into this lack of what most markets have. Pile that up it is where senator sanders is. People get fed up with it, the rest of the world can buy prescriptions at one price. And 15 of other countries gdp they have health care as good if not better. And here in america we have 18 of the gdp and health care and it gets more extensive. Look at pharma itself, you have a product that will take a long time, investment in r d, they pointed out that a lot of these have a five dollar material cost and then sell for hundreds of dollars. You have very low variable costs and very high fixed costs. Thats a classic case of how you can charge things and not have it related to your actual cost of doing business. It sounds like maybe if that is are accurate that you are working on a 4 profit margin, im assuming thats on sales im assuming youre Getting Better return on equity than that or she probably would be growing your business is, something has to give. You are either going to get what senator sanders is proposing, where all of the countries have done it because they never found a way to address the broad issues ive mentioned, and probably, the easiest place that you can fix it would be may be an primary health care, which never insurance intended to cover scratches indent and dense, never should consumers be in a market where they went one person to pay 100 of it. Though should not be under insurance for primary health care, those that can should have that support. Otherwise you will never have a real market. Im going to go through the things that struck me most, significantly. When i heard senator sanders ask , why are you selling im sure its simple, molecule drugs as well as the ball biologics, why is it selling at sometimes 1 10 the price of other markets. You are covering your variable costs. Why are we as americans paying the bill even though it is only 50 of our gdp if its not working here, how are we going to get the rest of the system to work . Why is that i never was clear, i didnt hear a clear answer other than you are going to continue to do it . Do you want to start, mr. Ricks . Yes. For the question. I think that one problem with the data thats often cited is the list prices in the u. S. , we get paid on net pricing, so prices are between 30 and 35 in europe, not double, they are higher on an average basis, and you have the earliest access to new medicines in any country in the world, and in general, we have an industry here as well. Which i think supports dobbs etc. Supports jobs etc. Attributes of our system should not cost 50 more than what health care does across the world. And in your case, because most people have a prescription as their first entry into the Health Care System, here you are showing us where you are to are charging minimally, four times as much instead of 10 times. I dont think politically that will get you into the next generation where you will be able to regulate utility and it will be the same format that all of their countries have had to go through. One other thing that we want to mention is that the possibility of new cures and treatments. That is funded by, more or less the premiums that we get in developed world. They fund that for the world. We need to strike a balance. What does that have to do with charging us, 10 times or at least four times. Why cant they carry it, they are not doing the work they should be paying more. Used you raise a good point, lily will spend about as much as the entire country of germany spends in one year. I think you need to address that question because we simply cannot afford it. You run a business that has the peculiarity of uncertain outcomes, rnd, that is bona fide. But i think maybe you defaulted somewhere down the line saying we dont need pbms. Weve had that conversation, why would you then not need pbms when they are making a strong a smaller margin and such a complicated system and you are the producer of the product. In all other industries you have a wholesaler that designs it, and distributes it across the marketplace and then was at seven minutes, mr. Sanders . Senator eight minutes. Senator i will yield the floor, and we will have the discussion further. Senator thank you to all of you for being here with us today, i would like to art with going at how this system affects folks who do not have health insurance. My first work in the senate focused on this when i met my fellow minnesota, nicole smith holt, who chairman sanders mentioned earlier, died of ketoacidosis after he couldnt ration his insurance his insulin and died. Weve heard about your Patients Assistance Program and you brought up today that insulin is better and different than it was 100 years ago. Diabetic patients need different drugs, and insulin based on their body and what works best for them. So my first question to the Drug Companies, can uninsured patients currently access each of your Insulin Products through all of your patient assistance programs at somewhere between 25 and 45 which i believe is the range of prices . Yes. Is the answer, if your insured is 25 for insulin, and if your income is less than 57,000 a year and youre uninsured, it is free. The same for us. Uninsured patients use the facility over 100,000 times last year. For all of the Insulin Products not just some of them . Ok. And mr. Jorgensen . Yes, senator we also offer a program where you can access free insulin if you are in a situation where you need to ration. Ok. So i dont understand, i hear about patients being charged list price if they dont have insurance. Im having cognitive dissidents trying to understand. Why dont you just lower the list price for all of those medications and just make it simple . We would be happy to get there, we dont like the system, rebates dont do anything for us. Let me turn to pbm because Drug Companies are saying they would lower list prices you have been saying that you would lower wrist lower list prices, that you wont lower list prices and will be all done, new all done . Weve been asking for years for them to lower list prices. The lower prices are coming far too late to when they could have occurred years ago and now, because of the medicaid cap is going away they are going to be paying more. They are doing this because of Government Intervention not because it going to lower the price. We welcome them to lower the list prices and we do so to increase the value that is provided to our patients. Similar to express scripts we would apply applaud the lowering of her truck prices. And the graph that senator collins showed on her chart that appears to be rebates and discounts, you would get rid of those . Theres two things, one is what is done to date. And the prices that have been announced on that chart is below the cost for coverage. Mr. Hudson . To be clear, it was 2018 that we brought a lower price and it had nothing to do with recent policies or announcement. And ive reduced the price of that three times to no effect. And that we bought in the same factory is 60 off long before this years debate. Im a bit perplexed. To the ppm executives, what do you say to this critique that your products or higher when the list prices are higher . I will give this as an example because it is an important point being made. The lower price brought to the market has not been accepted by ppm. In 2017, one came to the market which was generic competition in that category. We lowered the list price and we lowered the overall net cost for the customers, so we converted 97 of all on that. It was significant savings our customers and we embraced a much lower list price than what plant was promising at the time. So this critique that pbns do better when list prices are higher, does anybody is that on their critique, or how do you see that . Senator, our focus continues to be for our employer clients and patients that we drive to the lowest net cost regardless of where the list price is. An his was an interesting example. Lantis was an interesting example. When it did not have competition, it actually lowered in price. When competition entered the market, discounts were about 3 and increased to about 20 in the 2015 range and tripled since that point. To the questions earlier on products in other countries and how expensive they are, unless there is competition in the market for us to drive that competition, you will continue to see sky high prices listed by drug manufacturers. We will do anything to bring those prices down, which includes rebates which may come back to our employers and patients. Let me follow up on that. Senator braun and i tomorrow will be marking legislation that we have introduced that would basically be a bill that would help bring lower costs generics to the market more quickly. This is another place where i am having cognitive dissidents dissidents because this basically determines which medicines patients can get at what cost. Medicare part d, a greater proportion of generic drugs are being placed on higher tiers, which leads to increased patient cost sharing. Another report shows similar trends forcing patients where they end up paying more for generic because it depends on what tier they are placed in on the formulary. Can you explain how you see that and what is going on there . Why is it happening. Why is it appearing that lowercost generic benefits are not getting passed onto patients as we would have expected and hoped . Senator, we are absolutely supportive of legislation that can help improve the acceptability to generic drugs that will remove pay for delay and will provide faster accessibility to more competition in the market. And we welcome anything that can help to do that. On a similar front, we also welcome reducing the patent expiration down from 12 years to seven years to create more competition and interchangeability roles as well on similar products that makes it easier for bayou farm markets to come to market and the competitive. Thank you. Senator marshall. Sen. Marshall thank you. Ms. Chan frog, how much of the rebates go back to United Health care ms. Chan frog cian frocco, how much of the rebates go back to United Health care . Ms. Cianfrocco along 98 . United health car, we pass on 90 of the discounts to the client. What percentage of your rebates are set back to cigna . We passed back over 95 of rebates to our clients. I do not know the exact number that passed over to cigna health care. Sen. Marshall that is exactly what i said, do any kind of kickbacks go back to cigna . We do not have any to our company. We pass over 90 of our rebates over to our customers. At this point, it goes back to our parent company, cvs health, not edna. Sen. Marshall most everybody up here agrees america is spending too much on Prescription Drugs. Americans spend 600 billion a year on Prescription Drugs, almost as much as we are spending on the military. I do not want to tell anybody need to tell everybody here that americans have spent more per capita twice than what comparable nations spend. For my next one, it is important to separate brand name versus generics, that brand names only represent 8 of the drugs, accounting for 80 of the cost. Generic counts for 92 of Prescription Drugs dispensed at only 14 of the cost. Need to have a conversation about what games are going on with those types of drugs. Next, i want to talk about the history of insulin. The thing about insulin today compared to 100 years ago, comparing the single airplane that Amelia Earhart flew compared to todays 737. And we need to look at the innovation that has occurred in the industry. Insulin was launched in 1923, slow acting insulin added in the 1930s and 1940s. We added zinc and made it last longer. Influenced with the first protein to be synthesized in 1963, so we figured out the immunoassay chain. There is a lot going on, but synthetic insulin was not produced until 1978. It took the industry 15 years to tease e. Coli into making insulin. It was not a simple task, but it took in the industry another four years to bring it to market in 1982 and we have to highlight that the fda only approved five at a time. We go on through the history of this and there is more advances in the Technology Pumps and eventually we are able to manipulate the amino acid sequence that we come up with even new and better insulin, able to better match what we are doing with our own pancreas. So it is quite a development and we think we should share the value of what has happened. If you think back to 1921, insulin dependent diabetes, type one diabetes was a death sentence. Life expectancy was one or two years, but once we started looking at the pancreas of animals, people might have lived five or 10 years, but still 25 years below the Life Expectancy of other people in the general population. We continued to 1950, and there are 15 years below the general population. The 1970 8, 12 years below the general population, and today we are saying about seven years below the general population. It is not perfect, but because of these improvements, we have made a lot of progress. Mr. Hudson, what does the future look like for you as far as innovation opportunities . Mr. Hudson thank you for sharing the journey. I think it is important to realize the contributions and we continue to improve on innovations. The next barrier is to help patients protect the insulin making function they have and treats them earlier. We launched a program a few months ago which is to try to stop the progression of the disease, giving people a chance to live insulin free for a couple of years. A life free from needing insulin and from needing medicines in general is the ultimate goal. We would all agree with that. Sen. Marshall we do not want to throw the baby out with the bathwater. We certainly think Prescription Drugs are too expensive, but we do not want to get rid of the innovation. I want to turn back to the pbms for a second. Again, 600 billion dollars spent on prescriptions for the country , pbms revenue last year was 58 billion. I want america to see what has happened in the industry. This picture paints a thousand words, that we see the integration occurring within the industry. Mr. Hudson, of the dollars spent on Prescription Drugs, what amount of that money will go to the middleman . I just want to get this on record. Mr. Hudson it is 84 cents of insulin on the dollar goes to the system of the middleman. On lantis, it is 93 across all channels. Are you also in the same range, mr. Ricks . Mr. Ricks we are also along the same range. Gross pricing, two thirds of it goes to pbms. Sen. Marshall these are top 500 companies, cvs is number four, cigna is number 12. To my executives from the pbms, you were recently looking at gpos. Where is the location of your gpo . It is located in switzerland. Ms. Cianfrocco ours is a delaware company. Mr. Joyner ours is in the states as well, a delaware company. Sen. Marshall what is the purpose of the gpos . I hope you do not tell me it is to increase purchasing power. Ms. Cianfrocco it is a purchasing organization, so it is designed to allow other companies, companies that negotiate with pharmaceutical manufacturers, to increase the counterweight against those high risk prices and negotiate Additional Savings to lower the cost of drugs. Sen. Marshall ok. It feels like a shell gain to me, feels like we are hiding money here and there. Mr. Joyner, why dont you put these lessexpensive insulins on your list of drugs you can sell . Mr. Joyner as i mentioned earlier, we have. The lantis example so you are telling me the pharmaceutical majors do not have the story right. All three said there are certainly drugs that they have sold that you will not put on your formulary. Mr. Joyner it is not on the formulary because it is not the lower net cost for the middleman. Thank you. Senator hudson. Sen. Hassan thank you for the hearing and i want to thank all of the witnesses for being here today. I want to start by following up on senator smiths line of questioning because i think all of us here would like a world in which your doctor writes you a prescription and you go to your pharmacy, and the pharmacy produces the prescription at a predictable price that the Drug Companies tell us is their price. That is what i would like, and i would like it to be a low price. Everyone of us has experienced going to the pharmacy counter and being told by a pharmacist standing in front of the computer, this will not go through, or you will need to pay 300 and i know your copay for medications is supposed to be 10, but this is 300 and they cannot tell you why. We all know, everybody in this room knows, when you have got a child who is sick or a loved one who is sick and you have been through a process of getting a diagnosis or prescription you hope will help, this is the last complication you need. Senator smith was asking about, why not just offer to the pharmaceutical representatives here, why not just offer insulin at the price at the Pharmacy Council counter . Eli lilly, is to ricks, you have insulin at 35 or less. Mr. Jorgensen, your company has made similar commitments. My question is, in your patient assistance plan, how does the patient go about getting this assistance if one of you said it is 57,000 income threshold . What happens to people who are not on one of these plans are uninsured in terms of getting the actual assistance you say is available to make sure people do not pay too much for insulin . I can start. In q4 the question. We have all experienced the frustration. The 35 buy down, anyone with a Valid Insurance card, that covers eli lilly insulin. It is automatic in 85 of the cases. The 15 of it is that the pharmacy computers are not plugged in yet, but we are working to close that gap. If someone does not have insurance, they can go to our website and have a few clicks to get a coupon for qualifying for that sale, or they can call our number and we can help them. Mr. Hudson much the same. If you go to value. Com, you can get the resources. If you are uninsured, you can print it off and get your insulin for free. Sen. Hassan and you print out the coupon . How lengthy is the application process . What kind of information do the people need to provide . Mr. Hudson it is not that complicated, and it was over 100,000 times done for the uninsured, over 600,000 times for people to reduce their copay. Sen. Hassan i think it is straightforward to you, but i am not sure it is for patients. In the case of the emergency that we have heard about, and it is a terrible situation that should never occur. If you contact lilly today, we send you a supply at no cost with one question, what is your address . And you can input information for your income level, but that is for next year. Sen. Hassan and what happens if you are over 58,000 . Mr. Ricks you are available for the buy down for the sale, and many people can use insurance as a shortterm need and 35 is reasonable, or they can buy our 25 vice pro, which is able to be purchased without insurance. Sen. Hassan mr. Jorgensen, what is the process like for your company . Mr. Jorgensen is a similar process. I do not live in the u. S. , so i took the time to visit and ask patients about their experience, and through that, we enhanced our provision programs. So patients without insurance, they can just go to our website, it is a few clicks, and you can get access to insulin at these prices at some 35 or even go to walmart and buy a bottle for 25, and that requires no paperwork whatsoever. Sen. Hassan thank you. I want to return to our representatives from the pbms now, and this goes to point senator kaine was trying to make. Manufacturers are taking steps to lower prices and overthecounter prices of insulin. However, patients with insurance only benefit from these lower prices if pbms also step up to ensure these lowercost options are insured. So how are each of your companies ensuring that lowercost insulins including generics are available to patients with commercial insurance . This is a very good question and we start with using competition to negotiate the lowest net cost. Once we do that, that passes on to our employers, Government Entities in order to manage the benefits. We encourage them once the savings are generated to actually offer more affordable benefits either on the drug list or encourage them to use the discounts at the point of sale. 10 million lives is already on the preventative drug list. We have a number of customers doing the preventative drug list, so on average the average cost of insulin is 25 or less. Cvs health specifically tells our own 2000 employees, does pass through the discounts on the point of sale and we also have preventative drug lists so our employees play pay zero. We are very much in alignment. Sen. Hassan dr. Kautzner, i will follow up. I think it was senator marshall who said we are hearing Something Different from our pharmaceutical manufacturers this year about their ability to list the lowest price drug insulin on your formularies. Why dont you address the question . Dr. Kautzner thank you, senator. In 2020, we capped the cost of insulin across the different types of insulins and working with these manufacturers at 25. Last year, it saved our patients 18 million and utilizing that program, we also recently absolved another copay assurance plan. This plan caps not just insulin, but for all players that have all Branded Products at 25 that are not specialty drugs, so it keeps it affordable. We also are expanding our preventative drug list as well for payers that do have high dockable health plans or hsa accounts, having additional options today where medical and pharmacy are combined in the deductible, separating those from pharmacy is the most utilized component benefit for a lot of times for the year. And that would be another benefit for patients. Sen. Hassan and i am sorry we will not get to our last witness. I do want to followup with you, dr. Kautzner, on the relationships you have with independent pharmacies. Thank you. Senator bud. Sen. Bennet thank you for being here. Miss cianfrocco, in your testimony, you said that through clinical formulations. I would like to understand this better and this committee will vote tomorrow to ask pbms on their rationale. What do you mean by Clinical Foundation for formulary placements, and how does this influence patients ability to fill a prescription with their doctor . Ms. Cianfrocco thank you for the question. Some of the drugs we have talked about today which are rebated, hundreds of drugs are generic and they are meant to be the lowest cost option for customers on behalf of their consumers, but it all starts with clinical evaluation, having an independent committee that assesses the efficacy of those therapeutics before they can be offered on our formularies. Thank you. In north carolina, about 40 of our 10 million residents live in rural areas of the state, and access to pharmacies is critical, especially for those rural patients. I have heard about rural pharmacy closures and concerns about them, so mr. Kautzner, mr. Joyner, ms. Ms. Cianfrocco, what steps are your pharmacies taking . Mr. Joyner in the rural markets, they are a central to our pharmacy network. Then many cases, they represent represent close to 40 of all pharmacies in our network today. We do negotiate generally with what i would call a group participating organization, so the independent pharmacies come together with large wholesalers to contract specifically for them. Our contract with the group participating organizations is higher than it is for other chains and Grocery Store pharmacies. We reimburse them more, make sure they are aligning with large purchasing organizations, and it is what we believe is an essential part of our pharmacy network. Thank you. Dr. Kautzner . Dr. Kautzner as a pharmacist and rural american myself from missouri, it is important for organization to ensure patients have access regardless of where they live. Unfortunately today, less than 10 of physicians live in rural america, even though over 20 of the population does. We are working with independent pharmacies in improving overall reimbursement rates for rural pharmacies on average of 10 . Secondly, we are working with them to do things beyond pharmacy to provide improved access to care and other services, whether those before for diabetes testing, vaccines, doing components around Behavioral Health testing, opioids, so those are Additional Services where they can provide quality of care and be acceptable, where you do not have to go to your doctor if you do not need to. We are working with rural and independent pharmacies to ensure patients have access to quality care regardless of where they live. Thank you. Ms. Cianfrocco the independent pharmacies make up over a third of the optumrx network, so there are Quantum Services that are unique. What we point to for our pharmacies is number one, increase reporting, predictability of reimbursement, and reimbursement that addresses their unique Business Model together with revenue enhancement opportunities in areas where they would qualify, such as medication and insurance coaching, disease management, diabetes, and identifying barriers to things like rationing and inability to get insulin because in many cases, they are the source of trust and access and some of the only sources of trust and access in our rural community. I thank all of the witnesses. Thank you. Senator casey. Sen. Casey thank you, mr. Chairman, and thank you to the witnesses. I will be brief in light of the time and the vote going on. I do not have to explain to anyone in this room, i think there is a consensus when we go back home and here are people about the cost of Prescription Drugs, it is for a lot of families a heavy bag of rocks on their back every single day. And we have got to do a lot more on both sides of this table to lower those costs. We are happy that Inflation Reduction Act got those costs down for Medicare Beneficiaries and we are happy companies took actions after that, but my question is why stop at insulin . I will ask first on my left side of the table, starting with you, mr. Ricks, i want to in one minute, youre being the first one, itemize for me specific steps that your company is taking right now or will take to lower the cost of Prescription Drugs more broadly well beyond insulin. Mr. Ricks thank you for the question, and i agree with the sentiment. We need to do more. We are working on a number of things. Have capped outofpocket costs for all of eli lillys medications and brands at 25 or 35 in the u. S. , so people with insurance should have a limit on what they pay, no matter what they use. Increasingly we have talked today about the dysfunction in the system whereby lower listed price products may not be on someones formulary, so it is not listed as an option, but i see a future where there will be more products introduced with a high price and a low price so those with high deductible plans will have an option that is cheaper for them, and that is something we can do. The third thing i would say is we support policies that have a system where there is a beginning and an end to patents and to intellectual property. Foods intellectual property periods. Lowcost generics in america is a Success Story for American Health care. We support that world. Also support a world where we can afford to invent the products that became generic to begin with. Mr. Hudson starting with the outofpocket commitment as well in 2022, the cost was 850 million, so we are all in on trying to make sure we help. We have a rather challenging Health Care System, investing in r d, and helping to make sure customers get the drugs they need on the other end. I accept as well that it may be that we need to have a high and low price tier four the medicines we offer now. For lantis, it is disappointing that it has to be the case, and there must be a different way where the lower prices and lower outofpocket is provided along the chain. It needs some effort. Mr. Jorgensen by similar penetration, the u. S. Lags the rest of the world, and it really should be 60 or 70 mirroring what is happening in europe and other places, and we bring those forward, but that is a broader conversation about how to reduce Health Care Costs in the United States. Thank you, senator. We have a similar program, so patients who have insurance can get copays from us, so they typically pay around 25 in copay, and for patients who are insured, we have programs for all of our products. I think we should really focus on what is it the patient pays at the counter. We hear about rebates to clients, but we see what the patient pays at the counter. Sen. Casey mr. Jorgensen, a similar question, but what steps can you and other pbms take to reduce the cost . I will go back to the premise and say that competition works, so we will continue to look at competition in different categories, looking at the cost for unions and employers that fund the other benefit, and encourage them to have benefit designs that allow them to be more affordable for the members, similar to what we do at cvs, which is a zero dollar copay for insulin. Dr. Kautzner thank you for the question. We are focused on continuing to lower costs for our employer plans, our clients, but also for patients. We just introduced a new copay Insurance Plan which is a flat dollar copay, five dollars for generics, that we are bringing out to our constituents. We are also continuing to beat the drum on similar sex ability similar accessibility and reducing the patent to enhance competition, which will pull through, to have additional options in the biologic space. There has also been a lot of focus on price. Care is also a key component of what we do and what we must continue to do. When patients are on the drawing, they are on the right drug and we are able to help them with specialized care models we have based on specific disease states like multiples lareau said so you have nurses, physicians, doctors who are trained to help those patients. Over 80 of the patients that have specialty conditions are adherent on their medications and can have Better Health outcomes to live Better Healthier lives. Ms. Cianfrocco thank you for the question, senator. The first thing is a continued commitment to work for lower drug cost, and that is through a negotiated savings or list price , but looking for lower list prices, we embrace the lower list price. We embrace the lower list prices from the insulin manufacturers and we request more of it. I will give you one example. Bio similar, new ones are coming to the market and we are offering up to three of those at parity with the original project so patients, their providers can choose a better option for them and where bio similar manufacturer offered a lower list price, we are offering the low list price. Second thing i will point to is we will continue to recommend and push for benefit designs for our clients that would use the savings that we negotiate and put those to consume outofpocket costs, particularly in the high deductible plans. The third thing, that no one should be confused at the pharmacy. Additional tools that help consumers navigate their benefits, understand the best options for generic and brand drugs, so they can find the best affordable option for them. Thank you, mr. Chairman. Thank you. Senator mullen . Thank you. I will make an open comment. Chairman sanders and i actually agree on something, and that is something to be done with pbms, so i appreciate you having this hearing. That is a compliment coming from my side, if you can believe that. I want to point out this chart we have, the integration chart where it starts showing how the pbms have integrated themselves and become their own customer, which is like the fox in the hen house. It is difficult when you start thinking about that congress was actually one of the ones that helped stand up to pbms to bring down costs. You have seen costs do nothing but skyrocket on Prescription Drugs and at the same time, you have seen pbms it is literally a billion dollar industry. In the last five years alone, you have seen Prescription Drugs increase by 16 . At the same time, you see the net income of pbms and their integrated Companies Grow substantially. You start thinking why . If the billiondollar industry has grown up, it is not because of taxpayer dollars. It has got to be going to the drug costs. Who is ultimately playing that price . It is the consumer. Obviously. The money has got to be passed on to someplace, it is just retail politics and retail consumers. The price has to be made up because everyone of you guys are in business for profit, and i think that is great, this is america and you are able to do that, but i want to bring down on things that may need to be clarified. For instance, when senator marshall was asking the question of, why is it that some drugs are not able to make it to the market . And i believe it was said that they are at are the lowest cost. But mr. Hudson, when that comment was being made, you were shaking your head because what senator marshall was asking is what prohibits drugs from coming to market, especially competitive drugs . Competitive is what brings down the price, but i do not think you actually agreed with mr. Joyners answer when he said it is based on formula and whatever is cheapest for the consumer. Can you explain more from your perspective what prohibits drugs from coming to the market . Mr. Hudson yeah, i think what i was perhaps reflecting was a lack of unknowns. In 2018, we launched a lower price into the market, a lower price direct from manufacturing. You would expect if prices come down perhaps we talk in slightly different terms, i am reflecting on the fact that if the intent of the chairman and everyone here is to lower the price and it does not change for patients, i do not know why you brought a generic to the market that was significantly cheaper than the other ones, but it did not reflect for patients . Mr. Hudson it did not get listed in any way. And what is preventing them from being listed . Mr. Hudson i was not part of the conversation. But the pbms are the ones that i think you are being politically polite and i appreciate that, but we did not want to read between the lines on this one. Mr. Ricks, lets talk about rebate checks because a question was asked earlier about rebates, and are pbm officials were saying that they go to the customers will which i am curious about who their customers are because i think the public would assume it goes to the individuals, the person buying the drug, but i know six click i know my six kids always need to be getting something for a Prescription Drug, and i have never gotten the rebate check. Who are the customers . Where do you send the rebate checks to . Where does the check actually get mailed to . Mr. Ricks we were instructed to send them to the gpo. Where is the gpo at . Most of your checks, what country are they mailed to . Is that the United States . Mr. Ricks there are some that go outside of the United States. The total rebates in the United States for commercial was 8 billion. It is not one third to each, but it is roughly that. And several billion goes outside the United States . But these are customers that go inside the United States . The rebate checks are not actually staying in the United States . Mr. Ricks correct, a big chunk. That is interesting. So when we Start Talking about customers for the pbms, who are your customers that you are referring to that the rebates go to, because you say pbms only keep 97 or 98 of your rebates, right . And a customer is the Insurance Company, right . Our customers, we have over 2500 customers, many of them are small customers, labor unions are the clients, Public Sector entities. And health plans, right . But also your Insurance Companies, right . So the whole reason is to supposedly bring down premiums, but yet if you look at this top line where it says issuer, the pbms only Insurance Company is where the rebates are going to. So you are rebating yourself. That is just a great Business Model. And we wonder why prices are high to the consumers, and this is why the chairman and i actually agree on something. This is not working for americans. It is working for you all great. You guys are killing it. But if we are talking about bringing down prices, what have you all done to bring down prices . That is the whole reason you guys were created, to bring down prices. We have seen nothing but greed. It is not only the pharmaceutical companies that are making it, it is not going to the pharmacist unless you own them, but if you own them, you do not care if it makes them because it is upstream or downstream depending on the integration tract. It is where youre getting your money back. And you wonder why you are here . Are you actually serving your purpose . Heck, no. You are not. And as i said before, it is like the fox has gotten into the henhouse. You have forced us to make the changes. And my private company, if i have an entity that has not been effective for what their intended purpose is, i would shut them down. That is what i think the solution here is. I yield back. Thank you, senator mullen. Thank you. I appreciate that line of questioning. One thing i wanted to share with everyone as we open up today is one thing i am proud of is new mexico, as you all may know, recently moved to cap insulin at 25 for a 30 day supply. We will see more attention state to state throughout the hearing and i appreciate the agreement to make insulin more affordable at 35 as well. And i am hoping that we can find some Common Ground here to expand upon that, especially when you talk about folks where this is make it or break it. For me, that has meaning. Some of you may know, i survived a stroke a year ago. If folks do not get their insulin, it would be like not having a neurologist or a neurosurgeon. It is a choice to live without, and are too many families back home that have shared with me decisions that they have made, trying to make insulin last longer than it should, making decisions about what they are going to buy. And i join my colleagues in saying whether it is this or in other areas, around our country, i do not want to get in the way of innovation, i do not want to stifle research, but when we have something that can transform someones life and save someones life, there has got to be a better way for us to make this affordable so families are not having to worry about other stuff and then have the stress on top of whatever that insulin will help with. And i can tell you, that stuff does not help. You can land in the same situation i was in. While i am proud of what we did in new mexico, as you all know, the policy lifted out public patents. There are still almost 200,000 people in new mexico that need insulin that do not get the cap. And one of the reasons why wanted to be here today was that. Mr. Joyner, what percent of appeals coverage are denied for those that request insulin by a doctor . Mr. Joyner i do not have that stat, sir. Mr. Kautzner, do you have that information . Dr. Kautzner we can pull that up and get that information to you. Thank you, doctor. And ms. Cianfrocco . Ms. Cianfrocco we can follow up with the exact number. I appreciate that. Trying to work with additions and trying to understand what happens when there is a denial, and i am hoping we will not see high rates. I would not be surprised if we do, but that is another area where we can do some work and make sure that people are again, getting whatever their doctors think they should get as well. That is another conversation i have been having with people back home. Their companies have made recent announcements about reducing the list prices some of your Insulin Products, and i appreciate that. What my team tells me is that according to cbc, about 16. 5 of people in the u. S. Who use insulin report rationing it because of cost, something i was saying earlier. Mr. Jorgensen, do you commit to keeping the price of your current and future insulin prices affordable . Mr. Jorgensen yes, we have a free option. People in a situation where they have to ration, they can get free insulin, and last year over 60,000 americans got free insulin from our program. I appreciate that i heard you say yes. That is important to me as we talk about future insulin prices. Mr. Hudson, can you commit to keeping the price of your current and future insulin prices affordable . Mr. Hudson we can commit to that. Mr. Ricks, yuki do you commit to keeping the drug affordable . Mr. Ricks yes, and the drug for diabetes today is already cap for everyone. I appreciate it. I want to inform everyone that these reforms work. When there was an effort to cap Medicare Part d, we saw about 9000 new mexicans that will benefit from the order of 35 off the top. A 35 cap, im hoping because of actions taken that we can find a way to get there, but congress will probably have to take some action, and i Hope Congress is willing to do so so that when we are talking to families, that is at least something we can agree on with the research that is made in these spaces that we will say yes, we can save peoples lives. And when we have these incredible scientists and doctors that are developing these lifesaving technologies, that we are doing it in a way that says, you are going to get help regardless of how much money you make. You are not going to have to worry about getting that insulin to stay alive. I am certainly hopeful we can get there. I just wanted to come and share a few of those stories we heard from people back home as well, to get understanding, access to care, and like i said, this matters to me a lot. Before this last year. But there has been a bit of a revelation to me that when you get sick, when you need help, when you need prescriptions, they should be there for you. Otherwise, you might not get another day to fight for other people. And someone decided i was going to get another day. So, i will be here, i will smile and be nice, but i know how to fight too. And i am hopeful we can find a way to get through this together. Thank you, mr. Chairman. Obviously representing massachusetts, i am very proud about Biomedical Research and development. But the challenge remains that much innovation is locked behind walls of research institutions, drug manufacturers, and mazes of policy benefit managers and insurers. Innovation without access is a hallucination for patients across the country. They need access to these lifesaving drugs. One in five americans with diabetes is forced to ration their insulin. When patients do not get the insulin they need, they show up in Emergency Rooms, in acute crisis, patients receiving care from Community Health centers should not show up in emergency departments. And that is in massachusetts, and we pride ourselves as the number one state, we are the brain state. But even we have problems with this issue. In march, both eli lilly and sanofi announced cuts in insulin prices. Some of these forms of insulin have been available since 1996, and prices have only been going up. The price cuts that did occur followed intense public pressure. And drug price reform in the Inflation Reduction Act. And if i am right, it seems that Congress Acting was key to actually seeing a reduction in insulin prices that have not occurred in a generation. Mr. Ricks, do you agree with that, that congress has a role to play here . Mr. Ricks thanks for the question. I agree, everyone has a role to play. In the case of eli lilly, we started capping our prices in 2017 and started implementing programs like capping the prices of our bestselling products, so it has been going on for a while, but i agree everyone can play a role. Do you agree with that as well, mr. Hudson . Mr. Hudson i think everybody does have a role to play. We kept the prices in 2017, lowered the price of our most popular insulin in 2018. As recently as august last year, unbranded brands have made the same adjustments, moving at a lower price. I would add more importantly we have yet to see whether it makes a difference for patients, whether the outofpocket goes down, whether the lower list price actually has an impact on the choices and what they paid themselves. And again, that is another reason why congress should act. We put together a lot that insures the benefits flow out to those most in need, and i think what we have seen the last couple of years is once congress acted and got everyones attention in the industry, and some of it was voluntary, some of it was coerced, but from my perspective, it did demonstrate the need finally for the congress to be playing a role. Because the system is broken fundamentally and we have to find ways of ensuring that all of these benefits ultimately flow down to those most vulnerable. Mr. Jorgensen, do you agree Congress Acting has helped to control the drug prices in the marketplace . Mr. Jorgensen senator, we have faced prices since 2016. You have also had products at a lower list price, so i agree with you the complexity of the system creates a flawed system where patients are not getting the benefit. We should focus on the patient of what happens at the counter for the patient if you have an insurance with a high deductible, and they end up paying this big price, and that is the issue for patients. At the beginning of the year, a very tough situation. We have already matched one of the rebates so just this week, eli lilly released positive results from their phase three trial of their alzheimers treatment, and just these treatments for diabetes, these drugs can be a lifeline for people with alzheimers, but comparable drugs on the market cost over 25,000 per year. This is completely out of reach for most americans, and if the medication is covered by insurance, it will weigh healthily heavily on taxpayers. Eli lilly has demonstrated they can reduce their prices compared to competitors. They have done it. This is a good example that we are talking about here today. Mr. Ricks, will you commit today to offering your alzheimers drug at prices lower than your competitors . Mr. Ricks thanks for the question. You are really proud of those results, so i appreciate you highlighting it. We have been working on alzheimers for over a few decades. Today, unfortunately there is a blockade on medicare access to the alzheimers drug. The first is how to remove that. Any people rely on medicare who have the condition. When you have the average, the outofpocket cost for patients will be low, and what we want to talk about is how to lift the prohibition for medicare. I appreciate that. You are saying on the one hand we would like to help patients, but we need to have the federal taxpayer and couple it, and that would ensure that you get paid, but the question then comes back to you. What can you do to lower the price that makes it more affordable, separate from medicare reimbursement . I think that is the central issue that we are dealing with here today, is the excessive profittaking from a corporate perspective that leads to catastrophic pricing and the offramp is, we will just have to have the federal government pick up the tab. I think that is something that this hearing is intending put a spotlight on in terms of corporations reducing their pricing and may be having a more reasonable discussion with the federal government with regards to what is the cost to the federal taxpayer. Senator, we will be reasonable in our pricing in the sense we will produce value for the Health Care System, but unique to alzheimers, Medicare Beneficiaries pay into that program their entire life and have access to every other type of pharmaceutical for every condition, but not alzheimers right now. I am pointing out that flop in the current system. That needs to change. And what i am saying is 25,000 a year is too high. And it is the ask that then goes through the system and people are afraid of excessively impossible burdens for the system to be able to carry. It then comes back to you in terms of what you can do to lower that price as you are looking out at this vast number of 15 million baby boomers who are going to have alzheimers. And that is just for our country. It is a global issue obviously, so your market will be massive in 25,000 per year is too extraordinarily high. Thank you. Senator cassidy wanted to say a few words. Two questions. My first round, addressed spread pricing, but both of you spoke about things that your organizations are doing to address the market distortions. I want to acknowledge that. Both at the rural pharmacies as well as those who notice it in their deductible. It is a question of how we get wider spread adoption of some of the things you all are doing that would actually address the things we are frustrated about. I hear about the church, let me go, let me go, and i do not know if you have a quick comment on that. I will call on you about that, dr. Kautzner. All of the things you have done is a way we can get a faster uptake in the market effect. Dr. Kautzner thank you for the question, senator. Absolutely, we are leading the way on patients having accessibility and affordability with our new copay Insurance Plan we developed. Cigna as a player is going to implement it on 91 and implement that bid we are also asking pharmaceutical effectors to bring down the cost to employees as we get down to five dollar generics and 25 for brands. In terms of our initiative around helping independent pharmacies, we are absolutely working with them in partnership and have created a committee with other independent pharmacies from across america, owners of pharmacies that will help inform us so we can quickly implement those things that i spoke of with senator budd. We are excited to make improvements for rural americans. Ms. Cianfrocco, i do not know this, but i am told the rebate aggregator is where a lot of money hangs up and is not included in that 98 passthrough that you described. Your answer was no, in the vertical integration of the company, 98 is passed along. I do not know the answer to that. Is the money does money hang up in the rebate aggregator are known, no matter where it is in the vertical integration of the company, 98 of the rebate fee goes back . Ms. Cianfrocco senator, 98 of this comes back to the plan sponsor. For our gpo, it does not cost the client anything, so it is for the benefit of the client with no additional cost. Thank you very much. Thank you, senator cassidy. Let me begin by thanking all of you for being here. I know you have busy schedules, and i think mr. Jorgensen who is here from denmark as well. Anybody listening to this hearing has concluded that the system is broken. It it is normatively complicated, there is no transparent the. Transparency. Hospitals pay a different price, doctors pay a different price. All of this creates a lack of transparency that works for all of the Drug Companies. And the end result is, that there is an enormous amount of greed going on. Lets not all be naive. The Drug Companies, Major Drug Companies last year made 100 billion in profit. Pbms made and profit. And the company say the money is needed for research and development. But more money went back into stock buybacks than went into research. Wall Street Investors are making a new gym out of money while ordinary americans are going bankrupt trying to afford the drugs that you sell. And i am concerned that many of the new drugs that are coming out are outrageously expensive. In fact, nearly half of all new drugs coming to the market are over 150,000. I dont know how somebody who gets a cancer pays 150,000 for a drug. And ive talked to a leading oncologist that told me in some cases it costs a few dollars to manufacture those drugs. Let me just conclude by saying, this committee is going to stay on this issue. We need profound change in the industry, and having a markup on a very modest to set of bills. We are going to come back, and when you go to sleep tonight, i hope you ask yourself, think about the people who died because they cant afford medicine. Think of the millions of people not in the United States who cannot afford the products that you make that cost you a few bucks. I, for the life of me, cannot understand why if you have something that theyve the life and costs a few bucks to manufacture, and you are already making huge amounts of profits, why we cannot make it available to all. Its a moral issue. We have work to do, but we need to revolutionary changes in the way that we do Prescription Drugs in this country. And some of these republican senators have been ending twice as much or cap without on health care in this country. Drug prices are part of that people cannot afford health care as well. We will continue to work with you. I think you very much for being here. And this is the end of our hearing today. If there are any senators who wish to ask additional questions, questions for the record are due the 10th. And the many stands adjourned. Thank you all, very much. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [indistinct chatter] cspans washington journal, every day we are taking your calls alive on the air on the news of the day and we will discuss policy issues that impact you. Coming up thursday morning, we will discuss at the end of title 42. 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