Transcripts For CSPAN2 Pharmaceutical 20240706

Including comcast. Are you thinking this is just a Community Center . No, its way more than that comcast is part of 1000 Community Center. Wifi enabled list so students among them families can get the tools they need to be ready for anything. Comcast suprt cspan as a Public Service along these other television providers. Giving you a front row seat to democracy. Leaders of some of the nations Largest Pharmaceutical Companies testified on insulin prices before the Senate Health committee. Lawmakers as the Company Heads about stock buybacks, Prescription Drug prices and assistance for uninsured customers. [background noises] [background noises] the Senate Committee on Health Education labor and pensions will come to order. Let me begin by thanking the ceos of eli lilly, eat three major manufacturers of insulin. For being with us today as well as a heads up cvs caremark, express scripts and optimum rx three major pharmacy benefit managers. They had to judge authors schedules we very much appreciate all of them for being here. I also want to take this opportunity to thank eli lilly and reset months as i thank you all know announcing a substantial reduction in their list prices for some of Insulin Products. This is an important step forward. For me the bottom line of this hearing is not complicated. I do not care if you are a democrat republican whoever you are all of this country people are saying enough is enough they are sick and tired of paying outrageously high prices not only for insulin for other products as well. They want action in this committee is going to do what we can to respond to their needs. We need the help of the people to do that. And as we gather today i know we have some advocates in the audience of spent a great deal tsof time to lower insulin. This is important that we acknowledge manikins because they ration their inset 1. 3 million americans do that. Some of them died. Alex smith was 24f years old he dreamed of opening a b sports b. He is dead because he cannot afford insulin. The 10 year elite was 22 years old and worked two jobs to support herself she is dead she could not afford insulin. Alvin rivas was 20 years old and already lost his home because of insulin costs. This young man is also dead. These are just a few of the Many Americans have needlessly lost their lives because the outrageously high cost of insulin. Further we must acknowledge the thousands of americans who ended up in Emergency Rooms are hospital beds suffering from diabetic ketoacidosis. Very serious medical condition as a result ofli rationing there insulin. 1. 3 million americans in the richest country on earth cannot afford insulin. The committee today is convening for two major reasons in my view. One of them is low but personal. A couple years ago i took a trip from detroit, michigan to windsor ontario. An order to purchase insulin in canada which they were able to do for one tenth of the price. Then they were paint in the United States of america break one tenthod of the price for the exact same product foras it i wl never forget as long as i live the tears coming out of the mothers eyes because she could suddenly afford insulin. What i promise them t is that ty are notou going to have to go to canada or other countries to buy a lifesaving product that in america we can make sure they can get that here as well but secondly thisin committee is not only going to be dealing with the prices sent insulin to everything we can to end the outrage in which the americans, our people paid by far the highest prices in the world for virtually every brand name prescription on the market. Whether it is a drug for cancer, for Heart Disease for asthma, whatever it is we end up paying the highest prices in the world. We want to know why there are americans who are dying or becoming much sicker than they should because they cannot afford the medicine theyy need. Those are the question members of our panel are going to have to answer today in the future. Today one out of four americans cannot afford the medicine that their doctorsrs prescribed. That is beyond comprehension. And lets be clear the high cost of Prescription Drugs not only impacts the health of individual americans, but the budget of the United States of america. Ti if we paid the same prices for Prescription Drugs as major countries around the world, we could save over a trillion dollars in 10no years. I know many of my republican friends are concerned about the stuff a sit plate paid the same prices people around the world to save it trillion dollars over 10 years is real money. And lets be clear while americans pay outrageously high prices for Prescription Drugs the pharmaceutical industry and the pbmc make enormous profits every year. In 202110 Major Pharmaceutical Companies in america made over 100 billion in profits. And there ceos get very high compensation packages. The three major pbmc in america it made over 27 billion profits. Other its people and cannot afford the medicine at the Drug Companies in the pbmc make huge profits. In terms of insulin, let us not forget that a vial of insulin, this is a vial right here, cost reless than 10 to manufacture s i understand it. Someone will correct me if im wrong i think its less than 10 bucks. Meanwhile eli lilly increase the price 34 times since 1996 from 21 to do it at 75. The same exact product. Not change it at all. Why did they do it . Because they didnt know in your stop them for they can charge any price they want and they did is not just a lie leg. Novo nordisk increased 28 times from 40 in 2001 to 289. And sanofi increased from 35,002,001 to 292. Every instance is the exact same product crossroads astronomically. Lets declare this is a problem that is unique to the United States in france is 40 today it is 24, went down this country the prices soared. Meanwhile insulin manufacturers continue to increase prices, pbms signed a secret deals to increase their profits by putting Insulin Products not with the lowest list price pbms and the most generous rebates. The good news ispr as a result f a lot of public pressure wave recently seen the major Drug Companies reduce their prices. That is good news. Eli lilly announced the root reduce the price by 70 . Novo nordisk it would reduce by 75 . Transient announced it would reduce the pricece by 78 . It seems to me our job on this committee is w twofold. First, we must make sure these Price Reductions announced by the Drug Companies go into effect in a way that every american with diabetes thats the insulin they need at an affordable price. This committee holds a hearing nextxt year to make sure that isnt back tapping. We do not want words, we want actions. Lowering the cost of insulin is only part of what we must accomplish. This committee must do Everything Possible to make sure the American People no longer get ripped off by the Drug Companies for we ask hard questions. Eli lilly can lower the price by 75 , why is it still charging the American People about 200,000 a drug that treats cancer . 200,000 but that same drug is atsold for 54000. If novo nordisk can lower the price by 75 wife is still charging americans with diabetes 12000 exact same drug can be purchased for just 2 in canada. If it was at the starting Cancer Patients in america over 200,000 for drug they purchase in japan for just 37000. Questions the American People are asking. They want to know why at nearly half of all new drugs in america now cost over one her 50000, who can afford it . One her 50000, what world are you living in . How does that happen to cancer drugs which in some cases, if you dollars to manufacture. A few bucks to be effective. The accredited felling for 100,000. Really . Really . We have no conscience or moral values . Weve got a lot of work to do. Bottom line is we appreciate the work being done on insulin. We think all the advocates out there fighting that we have to make sure american can afford the price of Prescription Drugs. Looks like hr standards. The census is a culmination only to medical school in new orleans direct residency untreated patients in baton rouge. Each time diabetes is a concept also the ability to forgive drug as well for an interesting for me ive seen the work you have done, the technology the Drug Companies have put together that have made these medicines more convenient to take out of made it easier for the diabetic to manager diabetes. Going to tip our hat to you. On the other hand the ability to for the insulin is equally important as to innovation may have occurred because obviously cannot afford the innovation its as if the innovation is never current. In 1983 when i graduated from medical school, a lot more difficult to control the now. Not only have we had a medical breakthrough but we have had you come up with products that have made it easier for the diabetic to manage. I thank you for that. That goes without saying and that time. Had remarkable increase in quality of life. The teenager going to high school is much more managed therefore she is more likely to take her drug. We all thank you for that. But over time he got to for the innovation. Now we have to look at the issue is onut the cervical the kind of discussion here. When i go to church and people are pulling on my jacket they want to know about drug drug prices at the diabetic they want to know price of Prescription Drugs as a parent they areon really pulling on my jacket. Medically integrated with the Largest Insurance Company in the world. Managing 80 to the major drugld claims. What im told in recent years the knot is actually decreased even as the list price has increased. The money is going one place for a particular patient in her deductible is paying this price and is going from her parker to folks far richer than she. I appreciate the role they play prevent zoom hearings with academics pbm to drive down for a net price for patients. I will stipulate that. It is clear and always reaching the patient and at times particularly when choosing a deductible she is really paying a lot. That cannot afford. You have the manufacturers they have a look at todays hearing is to find answers and to find solutions. How to point fingers in the other will be fingerpointing because it is washington d. C. To address why are Prescription Drug costs so high particularly for the issue of insulin and what is the respective role of each of the players . I suspect if we realigned and sent those i want the graduation oftentimes bad behavior is driven more by bad incentives and that actors. In 10 bills aggressing pbm is a generic drug burn to try and make sure they can afford it. Today is the opportunity to inform or legislation birth till our objective and by the way the into law andl sign house of representatives passed the should be our goal. But for being here look for it you testimony as to how propose to lower cost American Families without ideal for quick thank you very much. Chair chief executive officer eli lilly. Senator as i understand it, wanted to introduce because he is from indiana were eli lilly is located. Thank you, mr. Chairman. Ranking member cassidy, i like to introduce mr. David ricks the fellow hoosier. Ceo of eli lilly and company. Indiana is a place for a lot of companies that have loomed large not only in pharmaceuticals were the biggest manufacturing state per capita in the nation with drug developmentsh served in a variety of domestic and Global Leadership roles with lily. Most recently becoming ceo 2017. Eli lilly was first pharmaceutical manufacturer to commercially produce insulin currently market several forms of insulin. Thank you so much for agreeing to be here in person to discuss your products we would ive had many discussions what ails the industry in general from hospitals, to Insurance Companies, to pharmacy, pbms in it. Even practitioners. A big lack of transparency, parent competition drives most other industries. Thank you for being willing here and thank you for being here to answer those questions. Roxio recognized the quick thank you chairmann sanders. Randy member cassidy distinguished members of todays community. Im d pleased to be your to participate in this hearing from david ricks chairman and ceo per click click you will do your mouth please . I maternity up eli lilly company. I joined 26 years ago because i believe in our mission. Innovation is at the heart of what we do. To good people diabetes. Type one piecece was a death sentence for the first animal which only introduced extended Life Expectancy to a person 30s. Today after a century of innovation Life Expectancy is now well into person 60s but we are notdi done. Diabetes still significantly reduces peoples Life Expectancy reading with modern insight and they struggle to keep their disease under control. There is more work to do. Not only am diabetes, on cancer and alzheimers and other serious conditions. That is by lily invest 25 of our total revenue this year 8. 5 billion into rnd that enables us to introduce newdi medicines. Nineteen in the last decade alone including the worlds first monoclonal value for covid. Armany more medicines coming in the pipe library just last week we showed exciting results from a new study, setting one of our medicines and alzheimers disease followed billions of dollars in investment, literally decades of work in several failures that preceded it. Of course medicines do no good if people t cannot afford them d access them but that is why i am proud we have led the industry in making insulin more affordable. About 75 cents a day. Before recent announcements which a dry the averages even lower. We began efforts years ago is not raise the price ofns any insulin since year i became ceo we only cut them into thousand 16 we lodged the first follow on biological insulin in the United States discount of the original brand on a box of it here with me today. A nonbranded copy of our leading selling at a 50 discount. We cut at the 70 may 1 is out 25 a bio. When the insurance system is not working for some people who need an incident where the First Company to cap their outofpocket costs at 35 per month. Now technologically possible. So the only company that will cap alter insulin at 35. These efforts and say people five east 185 million year to date about 100,000 people per month from the hundred thousand people. We let our way out of affordability ofof the headwinds of a system that unfortunately can incentivize others for hire list price medicine. Tireless prices allow for higher fees and rebates. While benefiting employers, one of many examples. In this identical cost 75 less, only one in three people today in the unitedpr states have accs to the lower price. In a preference for higher prices over a lower price product that is identical should never happen. Its a lot of recently announced price decreases neck price bubba have a log we take after rebates and discounts was about the same as in lodged in 1996 of the listed prices see brief companies who did not invent come did not develop nor manufacture the medicine. With the remaining costs the product of the making and distribute it which also thousand highpaying manufacturing jobs heree in america with full benefits and pension. We finance our patient p affordability commitments and also contribute 25 of that net revenue back to rnd. For newer and better medicines including insulin. Reforms are needed. We need a system that supports world i leading innovation and lower outofpocket costs for americans. Those reforms must help patients of the pharmacy counter while also incentivizing u. S. Companies to continue investing and leaving out some rnd which result in american having access to more and newer medication than any other country in th world. We are ready to continue to do our part and we are confident pulsing solutions are both simple and achievable. Thank you for having me today be good thank you very much for your next witness is mr. Paul hudson chief executive officer of sanofi. Thank you for being with us. Chair, Ranking Member, members of the committee be thank you for to be here today. Im here to talk about what hope is our shared goals to deepen our understanding of Healthcare System works, and what can be done to improve. Its also an opportunity to dispel some misconceptions. For example insulin sometime described as 100yearold drug. Much like the cause bears little resemblance to the model t todays insulin some after years of research delivered significant improvement to Patient Outcomes and quality of life. Determining transformers and medicine for patients is our strategic imperative. It is a role we in the biopharmaceutical industry uniquely play for society. Shortly after i arrived at sanofi refocus our development on medicines with potential to first in class and best in class treatments across the areas. Today im very proud of the progress weve made in support of these goals. Earlier this year we announced positive results fromto phase three study in copd. Third leading cause of death worldwide. If approved this to beem the fit innovation for patients suffering from this disease in over a decade. We anticipate the approval of the first immunization against rsv disease for all infants. This immunization, the burden of rsv on providers, the toll on families may never happen again. Finally we recently wrot launched the first medicine to delay the onset of type one diabetes. Over the next 15 months we will learn the results of another 36 pinnacle studies, each with the potential to become a first in class medicine or vaccine. These advances mean nothing if patients cannot get the medicines they need. This is why am equally proud of sanofi lungs and a commitment to affordability. We are transparent about our pricing including limiting our price increases, making medicines affordable for a Patient Assistance Program such as catholic outofpocket cost of business 35 for the uninsured and launching lowprice versions of oury insulins. We recently announced decision to reduce by 70 . This is not the first time weve offered a low price medicine to the system. Unfortunately, its time these medicines have received very minted coverage with limited benefits to patients. The system is largely driven by the financial structure rebates and fees to the list price. For all the focus on the price of insulin, the listed price is not the amount the system pays. In 2284 of our gross insulin sales were returned to the system as rebates and fees. Eightyfour cents on the dollar. In fact, since 2012 the average price for commercial insurance and medic cap part d plan has dropped by over 50 . Yet outofpocket costs are people on this plan has increased by 45 . Today the average amount the system pays is lower than it was when it launched in 2001. Simply stated while competition is working to drive down insulin prices for the system, the savings are not reaching many patients. Why are patients benefiting from that lower prices of the pharmacy counter . Today theyre just three players in the system that cover 80 of american lives. Consulted entities encompass benefit management, Health Insurance, specialty pharmacies and Group Purchasing organizations. This vertical integration through corporations do total control of the products the patients could access and the price they have to pay. Each of these integrate entities to benefit the selection of highpriced products because the rebates and fees they receive aredoe calculated as a percentae of the list price. Another committee is actively looking at solutionsot unwelcome changes that make the system work better for patients whileth protecting the Innovation Ecosystem that allows new miracles to be developed and delivered to patients we have contributed to the past we are willing to do so again. It starts with a holistic approach that fixes the g misaligned incentives to drive the systems preference to high list prices. Specifically the linking fees in the list price requiring rebates to be used to lower Prescription Drug costs for patients at the pharmacy. Otherwise they simply worry policy reforms will do little to help patients. Thank you again. I look forward to answer your questions. Thank you very much. Our next witness is lars he is going to be speaking to us virtually from denmark is that where you are now . . Yes. Thank you very much mr. Fruergaard for being with this request sherman sanders, Ranking Member cassidy, members of the committee. Thank you for the opportunity to speak today on behalf of novo nordisk. We scientific breakthroughs and cure the diseases we research we show the committees concern to many people fall the crooks of the u. S. Healthcare system. We hope todays conversation will lead to meaningful action. I like to begin by briefly introducing myself. I grew up in a small rural town in denmark my sisters tonight helped our parents run the arfamily farm. That early experience taught me too take responsibility and to work hard mentally for myself but also for others. I joined a mystery tears that went on to work for the company in the netherlands, the u. S. , and japan. Its headquarters in 2004. By then my father had been diagnosed with diabetes. I note the disease professionally and personally. Im humbled to service a company that always keeps the patient at the center of everything we do. Our company it was born out of a love story between two danish scientists. When marie developed diabetes on a path to find a cure. This is where commitment to treat and defeat diabetes began. Today comprised more than 555,000 colleagues worldwide. For the majority of shareholders and the foundation. Just last year the Foundation Awarded almost 1 billion worldwide. Some of these projects report between industry and academia here in the unitedee states. Others focus on cutting innovation around quantum computing and drug resistant bacteria. We are proud of our companys Financial Success feels the foundations work. As we have worked to treat and cure diabetes for over a century. Competent repeated misconception that insulin is still the same as it was in 1921. Nothing could be further from thed truth. One hundred years ago patients were supplies with a large reusable needle, glass syringes and a whetstone to keep the needle sharper. They borrowed the needle between users and insulin had to be injected repeatedly throughout the day and night. Early insulin saved lives but it was difficult to use came with serious risks. While advancement and insulin may seem minor or insignificant to those of us who cannot have diabetes patients tell us how innovation have meaningfully improve their lives. We ought to know no matter how pounding and might be them only help patients when it is accessible and affordable. No one who needs insulin should have to ration or go without it because they cannot afford it. That should not be the case. Most of us work hard to fill the gaps of the u. S. Healthcare system but we know the problem remains. Too often find themselves trapped by Healthcare Systems with the misaligned incentives. The system for more andt work dollars the newly createdbe subsidiaries so quote root participating organizations but not for patients. We now pay on average 75 cents of every dollar of medicine. This money goes back to the middleman to ensure our medicines remain available to t patients. Everyday we ask ourselves what work we do for patients . What we can do is try to fill the gaps for those the system has left behind. Quite simple we provide an immediate onetime supply of free insulin to any patient who faces rationing. We provide longterm supply at no cost for americans in need whose household make less than four 100 of the poverty line. That is 120,000 for a family of four. We supply insulin for patients through walmart and other pharmacies thats for 25. We work hard and help as many patients as possible. We like to do more work with you today. At the time for all t participas in Healthcare System look forward to your questions thank you. Thank you very much. We have heard from representatives of the three major Drug Companies now are going to hear from representatives of the three major pbms. Our next witness is executive Vice President president Pharmacy Services for cvs health. Thank you for measuring with the spirit. Thank you german sanders, Ranking Member cassidy and members of the committee. Thank you for the opportunity to discuss our work. We make healthcare more affordable, accessible and ultimate improve the health care that comes this country vertical at the pbm is to remove as many drug pricing challenges as possible for our clients and their members. When people cant afford their medications like insulin, theyre more likely to adhere to the prescribed therapies. Adherence means Better Outcomes, Better Outcomes means Healthcare System will spend far less on complications and hospitalizations. In order to make medication more affordable are job is to go head to head of the drug manufacturers and negotiate the lowest possible prices. The last two years of been challenging for millions of america is ablation search constrained healthful budgets represent 2023 study by the institute examined direct costs found over theut past five year, list prices have increased at a rate of 7. 4 . The same type of pbm industries help clients hold increase spending to four and half cap member to just 1. 4 . Specifically for cvs clients and for the sixth Consecutive Year we have reduce patient cost at the pharmacy counter with an average member outofpocket cost below 9 for 30 day supply. Today it is important to note more than 90 of all prescriptions dispensed are generic. They represent just a little bit more than 18 of the total spent. By using competition in the generic category generic prices have beenn deflationary over the past decade. So, now we are securing affordability for the mild 10 of the name brand drugs that is our focus for competition the brand marketplace is critical. We assist competition to deliver discounts to our customers. By negotiating rebates and discounts will or cost for our clients andet their members for competition existed. Not surprisingly many drugs without competition the high list price medications without discounts and account for much of a client spending today. We encourage the committee to focus its efforts here and we support the three bills addressing competition the committee will consider its market. So, drug manufacturers like rebates of the reason for price increases but faxed or otherwise government study after government study has concluded price increases are not the result of rebates or discounts. Now, we also understand this questions but the level of transparency would provide to our clients. The trust of our client is critically important to us the trust is built on thiss transparency. Transparency starts the beginning of our client contacting process and is the of our approach throughout her using thirdparty consultants clients negotiate transparent contracts and granular detail and understand counter healthcare dollars are spent. Weve always prioritized bringinghe transparent offerings to the marketplace and today we pass more than 98 of all rebates back to our clients. We also provide them with regular detailed updates on drug spending and utilization, prescription claims process cost savings achieved also it manufactured rebates we receive. Our clients choose how to use as discounts or rebates. By either reducing the outofpocket cost andh or delivering lower overall premiums at the point of sale of the medications. I begin by highlighting the importance of adherence in reducing complications and hospitalizations. Tp that is wholly create and maintain preventative drug list for that allows our clients to offer member 0dollar copays including insulin to treat diabetes and many other medications that are treating chronic conditions outside of the deductible. At cvs health wheezes program to help our children thousand employees stay healthy. We have made tremendous progress on Insulin Affordability through negotiations by inducing competition encouraging clients to adopt plan designs at lower outofpocket cost for the members. Reproduced on average 7 per year for the last fivead years. Ourin client in plant pay one third less on average for 30 day supply of insulin in 2022 and they did in 2017. Cvs caremark the average number cost for 30 day supply of insulin was less than 25. And for those using the preventive drug list is again zero. We also launched rx for the uninsured and underinsured patients with high outofpocket costs providing insulin at just 25 per vial. The probably provide pharmacy benefits over 110 Million People and improving their health every day. We will continue to improve and innovate on our model of client to provide affordable coverage for the medications that members need to stay healthy. I look for chance your questions. Thank you very much. Our next a witness is president f express scripts. Thank you for being with us. German sanders, Ranking Member cassidy and members of the committee. Thank you for inviting me too testify today. My name is adam and i grew up in Rural Missouri outside of st. Louis began my career as a pharmacist in ade regional hospital. After working Nuclear Pharmacy i began my career at express scripts just over 15 years ago. I am proud of our work to deliver Affordable Access to lifesaving medications. This cause is personal to me price diagnosed with stage iv melanoma in my early 30s. That experience strongly shaped how i approach our work to advancene pharmacy care at lower Prescription Drug costs. For patients and employers. As a Business Leader and guided by my experiences as a father, a cancer survivor, Rural American and a pharmacist. Express scripts believe all patients have access to the medications they need at affordable prices. For decades if taken on why the most toughest challenges negotiating pharmaceutical manufacturers to lower costs help plant federal and state governments and most importantly patients. We exist to help solve the challenges you are exploring here today. Ouri companys been at the forefront of introducing solutions to address the insulin crisis. In 2019 we launched a program capping patient cost for insulin to 25 or less. These lifesaving medications also have been extended for Additional Savings for cardiovascular diseases as well but we are constantly evolving and improving our services. Shield patients from exposure to a height list at the pharmacy counter to shield our clients exposure to crippling drug costs and provide contracting options. Ensuring our clients have complete control and flexibility choose their benefit design, network and pricing structure provide robust financial disclosures. Our solution for driving lower drug spending for patients are workingth. Each year express scripts saves more than 30 billion foral employers, the Public Sector and the patients we serve this is driven by effective drug negotiations to medical management targeted clinical support program. Savings are passed on to our clients at their direction which benefits americans in the form of lower premiums, reduced outofpocket cost and expanded coverage. Help keep outofpocket average cost to listen 15 in the commercial market less at 18 for patients using High Deductible Health plan, less than 9 in medicare listen 1 dollar in medicaid. None of this means assistant cannot be improved. Drug manufacturers take the highest price point possible exploit the patent system. Monopoly status for their brands. For employers sponsoring High Deductible Health plansvi restrictions prevent lowering costs for patients before meeting their deductible. Rebates have been characterized by some as the mechanism for increasing list prices thus increasing cost for patients. This claim is false. Rebates are discounts we negotiate to lower prices. More than 95 of our rebates are passed to express group client and lower premiums, reduced outofpocket cost and expanded coverage. Without the ability to use this negotiating tool to achieve lower drug costs healthcare spending would be much higher. Drug competitions ultimately what drives rebate, lower list prices and a lower net cost we applaud recent efforts in congress to speed the availability of generics and address abuses of the patent system that worked to delay competition and maintain high drug prices. Transparency and availability of benefit services for express groups to be transparent to our clients their beneficiaries. We provide robust disclosures which include principal Revenue Sources and information on rebate arrangements, fees, pharmacy claims. We strongly caution against prohibiting contracting option entirely. These are options, not mandates within contracts that are serving many of our clients today. Overall, our beliefs, our Business Model and our orientation are geared toward one providing Innovative Solutions that enable access to medications at affordable costs with improved health outcome. To providing clients to have accessible affordable pharmacy benefits and three providing additional transparency about the value we create. Express scripts will continue innovating drug pricing challenges and respond to the needs of patients. I appreciate this opportunity to address important questions about our role in how to evaluate we create reaches patients for a look forward to your questions, thank you. The counselor thank you very much for the final witness chief executive officer. Ranking member cassidy often rx apart Central Services to our customers include employers and unions, health plans and government rents. Make Prescription Drugs more affordable improve Health Outcomes for people we do this michael review negotiating with manufacturingch and pharmacy to bring the cost of drugs. Use their benefits and lowest cost options in serving patients in our pharmacy. Customers pay for that medical and pharmacy care for their employees and their members. They count on us tont be a counterweight to the substantial market power of manufacturers as a full discussion setting and raising prices for the product. We are held accountable for consistently delivering savings on Prescription Drugs for lower overall healthcare costs and ensuring people have access to the medications they need. Overall we deliver on average 1600 in annual drug savings per person to our customers. 98 of our negotiated discounts passed directly to our customers. They use these discounts to help reduce premiums to provide pointofsale savings into Investment Health and Wellness Programs for without our negotiations with manufacturers, the cost of drugs would be even higher. Save the system one or 45 billion annually. People need consistent Affordable Access to insulin. And since was discovered it has saved and improved countless lives. Over the last decade manufacturers list prices have nearly doubled. Along leadership from congress, and others we began offering pointofsale discount 2018. 2019 is increased by 34 access to 89 people in United Healthcare fully insured group plans plate nothing outofpocket for preferred short and long acting insulin and other drugs includes epi pens and albuterol. We offer a monthly supply of insulin for 35000 for uninsured individuals. The standard offering we recommend to our customers caps insulin outofpocket at 34 and supports affordability for patients in High Deductible Health plan. And as aio result 1. 7 Million Consumers who take insulin now paid after 22 per month and her efforts are ongoing. We also welcome the recent announcement by the three largest insulinay manufacturerso lower their list prices on some insolent products. And let me be clear we support and encourage lower list prices across the board. Despite the recent progress in insulin, more can be done for cost sharing on a month supply of insight is capped at 35000 medicare. A similar approach in the commercial market would close the gap for americans who still cannot consistently afford insulin. But importantly, such a cap must preserve to negotiate the lowest cost of insulin for the customers. Because even with the welcome Price Reductions, some insulins the listen place of insolent is still above 35 per prescription. Beyond insulin broader reforms are needed affordable for americans is sustainable for country. Reforms are needed to provide access to generics including closing loopholes pay for it delay, product hopping and other delay tactics. A 10 year on a product exclusivity should be established. Regardless of the number follow on patents. Public policy should also support more value based arrangements to ensure resources are focused on treatments that deliver the best outcome for patients. We appreciate this opportunity to share our perspective with the committee. Our company will continue to our part to make insulin and all Prescription Drugs more affordable and to improve health for all abl americans. I welcome any questions you may have. Thank you. Thank you very much. When going to been questioning alba get it. Let me start off by saying if somewhat in the real world is watching this hearing, they have heard every Single Person from the Drug Companies up to that ppm is we are working tirelessly to lower the cost of Prescription Drugs. Just knocking our brains out. And yet, atat the end of the dae 11. 3 million americans are rationing their insulin. People have died, people end up in the hospital. You are working night and day to lower the cost . At all over the world people paying a fraction of the price not only for insulin but for other products, drugs and similar things. I am going to appreciate very brief answers but we do not have a whole untied up here. Let me start off with eli. Im going to go down the line here. Since 1996 eli increase the price 34 times from 21 to 275 bucks. Same exact products. I am told that cost 5 to manufacture this product. In the story is not different for the productss produced by novo nordisk and sanofi. So my question to you, into the other Drug Companies, will you commit to this committee today that you will not increase the price of any insulin product again . Thank you chairman for the19 question. As i mentioned in my comments for. Brief please pray. Increase prices since io im comfortable to say we will leave our prices where they are for the insulins on the market today for. All of your products . We been cutting them. Mr. Hudson. Quick to set before we have responsible and sustainable pricing approach. We have had it since 2017. Net prices continue to follow the net price for insolent today is lower than it was when his launch in 2001. Im hearing from you that you will not increase the price of any Insulin Products again . To repeat myself we have responsible pricing policy standard for. Yes or no would be the better answer. We have a responsible pricing policy since 2017. Thank you center but we are committed to limits to single digit. Weve not taken any for the past many years. We seem double digit decline for the past six years. Our price dramatic following price. Theres a number of newer insulin that all of you brought forward to the market. So cost more than three to dollars. Will you commit to doing those products what youve done to your other Insulin Products and substantially reduce the price thof all insolent products . Will make that commitment to us . Senator we have capped the cost for the consumer at 35 for every lily insulin. Is that, i may be mispronouncing it. As can be sold for 35 . The patient will pay no more than 35. 9 for the product. The lesson 35 if i can have one quick thing. Most recent launch was atlantis at 60 lower at list price was not accepted by the system. Next i could also confirm we have ability of insulin thats below 5 for all of our entrance for patients if they want. Text thank you. Let me ask the ppms a question. Its a simple question appreciate a yes or no answer. Will you commit today, that your companys will but Insulin Products on your formularies with the lowest list price . We will commit to put the lowest cost product under formulator. Net of discounts and rebates. Whether it be the low list price or the high list price our job is to deliver the lowest net cost post discounts. Discounts off of high and low list price. Thank you for the question senator sanders. We will commit to putting the lowest net cost product on formularies. However, we also have other formularies that are other choices for our employers to choose from. Which do have low list to price products also will be proved to have different prices. We commit to always providing the lowest cost option to our client for the lowest cost. In other products are available to other clients through other formulas. Thank you. Mr. Ricks, elios lilly charges 196,000 ino United States for a cancer drug. That same drug to be purchased ine germany for just 54000. Will you commit to this conveyed to lower the price in the United States the same price you are selling it in germany 54000 . Yes or no . Respectfully senate that products on the market for a while program that is a primary mechanism in the u. S. The price will fall and that occurs. Im sure there will be competition too. The American People sanofi is a frenchh company. They sell a Cancer Treatment for 30,000 dollars a year. They sell the same drug in the United States for 203,000 a year. Nine times as much freight will you commit to lowering the price in the United States to 30,000 dollars, same price as it is sold in france . Over time, with the introduction of competition of other facilities et cetera youll see the price fall. The answer is no. Mr. Mr. Chairman i hate to interrupt for we are at seven members. Is every member have that . Absolutely. In denmark a diabetes treatment cells as epic 2000 per year. That is six times more to americans. Will you reduce the cost of os epic and the United States to what it is in denmark . Senator, i believe the amount you mention in the u. S. Is before rebates. They have 75 rebates in the u. S. As epic we see the price going down. Our price going down. So we get a lower price already. The answer is no. I deferred to senator paul. The great thing about capitalism is that supply and demand intersect to get the largest supply at the least cost when you allow capitalism to function. Capitalism is not functionally drug marcus because it. Prices need to be based on supply and demand. To promise to base their practice on bullying from a politician its illegal december and make all the prices go down my company the companies would be gone they would no longer exist. If a patient has a copay of 50, with the rational decision be then to choose . Whats in the case they buy one unit they would pay 25 not 50. Of the patient had a copay of 25 and that is 25 by my going to pay 25, is there any rational reason why i would want to buy the least expensive why wont i buy the more expensive drug at that point . Whats the identical and that will be indifferent to paying 25 out of pocket either way because heres the interesting thing the lower the copay the less the consumer cares about the price. You can mandate lower and lower copays you might get the opposite for you might drive consumers toward something thats actually more expensive. So for example under obamacare we made have no copay there is no copay forpa Birth Control. Buif you look at the price of Birth Control as if it came free the demand became enormous or greatly enhanced. So thenh prices went up from 2013 2019 you had a threefold increase in the price of Birth Control. The most important thing is we think things through but we all want lower prices if you want to mandate Lower Company prices for things you may well get the opposite because you are taking away the consumer from the equation. The consumers only involved in drug prices to the copay or the deductible. Much of healthcare, 80 or 90 is beyond that. So how do we Lower Company prices . With lower prices for drugs they hire intermediary. 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. No one is forcing anyone to hire them much as i understand the Companies Represented here represent tense of thousands of businesses who voluntarily come to you and hire you. They pay you and you make a profit. Your profit. Is it exorbitant, is your profit greater than the Drug Companies somehow . Its 4 . Thats likeha walmart. Surprised walmart isnt here to beat up on walmart. Spread pricing. We shield from incremental costs and we its more for the is pricing cheap or more expensive if im a customer . Generally roughly equal in price or cost. There maybe. Spread pricing is where they pay one price for the all the farms iowa adjudicated and it offering controlled pricing and can be less expensive than if they pay every claim in a pass through model. If you ban the cheaper form, might get the opposite result and might get higher prices. Not to mention while we should be banning any of this but is there a possibility to ban spread pricing and people decide toed a more of a fee on the pass through pricing because their obligation is to their stockholders and legally bound to make a profit. If you tell them they cant make a profit here, isnt it smuggling else if theyre going to please their stockholders. Ive bone to the drugstore and were angry. Why is it so obscure. Synergy home different than electronics or buying a car or expensive things . Weve made it opaque through the Different Things weve mandated. In the 1930s we passed antitrust law and Robinson Patman act why dont they go to another pbm and e70 some odd ones and well forbid this. Are you keeping people that are dike in my business . Diabetic in my business . Thanks for the question, senator. Lwere focused the most on lowr cost and as we all know, all inspire hope lips are not degret created equal and theyre separated in three different categories. Say theyre equal. Our fust is on where lowest focus is where lowest net cost is a complaint. Theres a possibility and theres the rub. Theyre giving you the lowest net price and say this generic and underneath the copay and outside of the negotiation is. List price means absolutely nothing and meaning nothing in medicine we have a complicated thing and because of antitrust law in the 30s and court case on the 90s and we have this complicated system. Instead of trying to unravel the complications on the market, asking to ban certain contracts. Unintended consequences of making things worse. This very Committee Held several hearings on drug prices and we had panels not totally unlike the one today with representatives from pbms and representativess from Drug Companies and a lot of finger pointing. I remember a few weeks after those hearings having then secretary of hhs alex azare in front of us who was formally associated with the form suit cal company as an executive and i was reading a letter from a constituent and how much the family had to spend each month to keep his sons healthy. At the end i said what should i tell my constituent about why these costs are so high. And he said its complicated. Thats what he said. I find that basically an issue of the industry not being transparent. Help me follow the doll lori harmon and the price of a drug and whos packeting that extra riprice. And i get its complicated as animals. Were going to make good policy, we have to have more transparency. Its why im glad this committee isli working on measures to achieve that. Looking at people versus profit is greed is not complicated. Did yes or no, did eli lily have stock bye backs in the year 2022 . I believe thats the number. Mr. Joiner, yes or no, did cvs health conduct 3. 5 billion in stock bye backs in 2022 . Yeah, im not sure. If i had the consolidated Financial Statements in front of me, ista that what you figure would be the figure . I would. Dr. Cots fertilizer. Yes or no, did express scripts Parent Company cigna conduct 7. 6 billion in stock bye backs in 2022. Yes or no, did optum healthcare conduct 7 billion in stock buy backs in 2022 . I believe thats correct. 3. 6 billion worth of e give linted to 544 million u. S. Dollars . Thats correct, senator. Thank you. We are taking, mr. Chairman, some steps in the right direction and legislation well be working on tomorrow in the committee, and im helpful that we are able to specifically tackle insulin prices later this year,ns but we cant ignore the Business Practices of the companies that have come before us today. Part of tackling drug prices relates to that need to get transparency and that need to take on the aspect of greed. You say clients pay exactly what they pay for the prescription and in this mod and he will clientsts receive 100 f rebates that the scripts get and clients pay one simple fee. Then the Pilot Program from 500,000 people with a negative 3. 5 drug trend and total medical reduction and 193 in saves from closing Clinical Care gap. P. It varies based on the performance of the network. Mr. Senator, i dont have the exact information of where its going. I cant speak to the specific per claim and on some claims theres a difference by claim and pass through the 98 discounts. There is through the Pharmaceutical Company. Paying 22 place to play 506789 3. 80 went to the pharmacy, 2. 71 went to the wholesaler, 6. 73 went for the manufacturer. And 41 or 9. 18 went to the pbm. Pretty good spread. Now i spoke to someone in the i dont need to read the article and someone that looked at commercial market and the spread is 11. 50. I agree with senator paul. It shouldr be transparent someoe says waitl a second, 3. 5 decrease and full pass through. They have a really hard time getting this. Thats a fortune 500 company and local 200 people employed and dont have assets so im told. Medicare part d its a 9 something spread and a percentage of the rebates and here when its purely a claim at 8. 50. Strikes me from your data and this and anecdotal data this employer is doing better and difficult to find out if youre a smaller employer. The average person pays 18. 50 for her prescription. But we know that in the High Deductible Health50 plan, theres a initial deductible of 3,000 and pick that number and then through the course of the year, continued drug spend. Its unclear to me is that when you are paying list price for a drug, not insulin because apparently you guys have done a good job with some of the drugs trying to lower and i spoke to you do you all have that data . Thats write have a concern with that and thats where if the insurance policy Company Knows what the deduct is and thats been negotiatedsu with the plan sponsor and now paying full freight for the list price because the rebate does not pass to her. The predicting pricing is fully operative and paying full freight. A sense of what that average drug cost is during that period. Mr. Joiner . I dont have the exact average. But i will t say that most of or clients will high deductible plans and the first dollar coverage and the fact he wanted to and over 10 million of the lives in the high deductible plans. 10 million employees with the high deductible plan and point of sale rebate. Exactly. Our average insulin cost per month. Talking drugs in general and average out of pocket spends for athe members less than 9 a month. Im talking about specifically. I understand. Theyre all vertically integrated within the same Pharmaceutical Company and business line and the egg regatta fee and et cetera and one they may aggregate and include the margin. Is your margin net of that or include that. Its net of that. Senator cain. Thank you. To my colleagues i have good news. In virginia theres a Company Called civica and nonprofit Pharmaceutical Company thats taken over a closed pharmaceutical Manufacturing Company and reopened as a nonprofit to bring both low prices and transparency to Prescription Drugs. Theyre interchangeable with the most popular brand names on the market, leeanne tis and more. Will you commit to offering such low cost and tier 1 product withs zero dollars or low cost copays . Well certainly well certainly open toed aing any drug that come withs the low net cost and low on drug price. In partnering with the manufacturers here today at no mar than 25, we saved patients last year over 18 million with that solution and now offering a new flat dollar copay plan design for the plans, which also will cap preferred brands at 25 and specialty inaner icks at generics for 25. Senator, in addition to all of the things were talking about lowering the cost of llinsulin, i want to be very clr that any insulin offering thats clinically effective can be delivered with support to our patients at scale and is available list price or net price ase long as its the lowt cost and its competitive. Its offeredos and it will be offered. Let me move to my pharmacy execs. I had a peak spl and ive heard so often from pharmacy Pharma Companies that you tried to develop a low cost product. Pbms slow you down. The list price is meaningless maybe to a patient but not in the industry. The pbm collect a percentage of list price when the negotiated price is lower and mr. Hudson, you said something a few minutes ago that perked my ear up and talked about trying to offer a low cost insulin product that was not accepted by the system. Thats too opaque for us slow senators to understand exactly what you mean by that. Can you go into more detail what it means that santa fe had a low costst insulin that you wanted o provide to more patients but it was not accepted by the system. Of course, senator. Insulin has been around by 20 years and trying to bring lower cost and not used by any great dee tails in 2016. Last year in august, we launched unbranded lantis in the fact with the same people with a 60 discount to the list price. It was just not listed on the health plans. What was the reason for that . Theul conversation between te pbm and the health plan and between me and not the pbm. We try to bring a much lower cost, much lower price to the table and therell be less rebate associated with that. Thanks for the question, senator. I brought two boxes of the product earlier and made by the same hard working people and after four years the per product is the copy. Based on market share of the poor performance. How about your company had a similar experience. Around onethird of access and the hierarchy. And are you told no, we keep our rebates and they go in and they do not decide on the plan designs. All three of the Pharma Companies who are here today have had the experience of trying to put drugs with lower list prices out available for patients but have been told theyd not be offered on formularies. Even so that someoneon could mae a choice. If somebodys on a form somethings on a formulary, count have tof be the product chosen and not on the formular. To our pbm witnesses, no Fee Structure in your company collect ago fee based on percentage of the list price . We may have a few in and around our client base. Doctor cut merri bowl, how about you . Do you collect on the list price . We have a mix of both where some are percentage fees and flat fees and youre on the record before we welcome in over products making them do that for years. I chaired the hearing of the Senate Aging Committee and why the cost of insulin was so high. And mr. Chairman, one of the witnesses was a father from maine who was going to canada to get insulin for his 10yearold son. What we found afters system of getting insulin from the manufacturer to the customer that was rifed with per serve incentives the study on the system could not bully and explain the charge of all the links. I want to put up a chart that shows insulin list price, which is the top line versus net brices from 2012 to 2021. And starting with you, mr. 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. As you can see, that cap has gotten bigger. Youve testified that 80cents per dollar doesnt go back to the manufacturer. Mr. Hudson said 84cents so similar. Explain whous gets that money because i can tell you its not for the most part going to the consumer at the pharmacy counter. Mr. Ricks. Its a good question. I can explain what are the costs that make up the bottom line. From that thats our revenue we pay our workers and make the product and pay to distribute it and we invest 25 of that line for research and development. The difference our concessions made in price negotiations are large payers like the pbms here today, youll have to ask them how that gets redistributed flat i configuration the system. Jot list price increased over 50 but the out of pocket expense is paying a counter has increased 45 . So its on average not making it is way to the counter for the person trying to make the choice in groceries and thats fine. I think we have a very strange system here to say the least and most of us would think the rebate and the discount negotiated by the pbm would largely benefit the consumer at pharmacy counter and goes to pbms themselves and goes to the Plan Sponsors and that could be an insurer and the plan not making it is way w down. So the insurers will tell you that we use to moderate rates and keep rates lower for everyone. The problem with that explanation is insurance is based on the principle that the healthy are subsidizing the sick. What were do asking turning this on it is head. In order to lower the premiums, were notot passing on the savis to the sick. I would agree. Where senator cassie was going with the high deductible phase where patients are with full exlist pricing and enormous with that faze andff creates a surpls thats supporting premiums or other things. Mr. Joiner, who owns your pbm . Cvs. And isnt there a connection with aetna . Thats correct. Who owns express scripts . Senator, the cigna group owns express scripts. Thats another large insurer; correct . Yes. 24 is an example of the systems insent and i have if you are in fact negotiating for your clients, you are. Youre negotiating for your owner who is are all large insurers for other Plan Sponsors that are Insurance Companies for large selfinsured employers and not negotiating for the customer because its not to be fair, its not up to you what the people who hire you or for whom you work. Deciding what to do with the discount and they could pass it all on but the evidence is overwhelming that they do not. The issue senator cain raised and thats theth difficulty that biosimilar haves getting on to the market at getting chosen by a pbm for a formulary. This makes no sense whatsoever to me if you care about lowering prices. Its way cheaper and i would use the an example that came up with insulin gargine65 cheaper than lantis and couldnt get on the formulary sold it takes the same product, roadway launches it and only 5 lower and gets what, it gets chosen. Some months there was a snowstorm or something and have to go through incredible contortions to stay in business. You get frustrated and he went and doubled the prices of everything and it was an Italian Restaurant and pizza, spaghetti or whatever, he doubled it. Same food butic doubled the pris and that shouldnt be the case. I say that because that is an aberration of capitalism. Senator paul would say if he was here for sure. Thats what were seeing here for sure and a case where straight to the customers, employers, unions, government, et cetera. E okay. I should have guilty or innocent senator colins to keep her poster up and thats a big space for 98 sounding like a big number and awful lot of it goinr purchasing that to the bottom line. Thats a perfect example of pbm competition and saw the price separation and at point in time we selected one insulin product and the result was declining costs and passing through 98 of that time and investing in their out of pocket expense and 0 copays and trying to be witho the discounts with the point of sales. Got it. The more they raise their price just like Italian Restaurant in boulder, california, their sales go up, which is everybody put in that position would have a very difficult choice. The 0 out of pocket and we recommend those dollars are used to protect the patient through things like the high deductible and preventative disease and chronic life saving disease. Right. Okay. Im just going to throw out a fact and i was puzzled going home last night just because as i looked into this it became more puzzling but at the same time somehow a symbolic of the Home Healthcare and fortune 500, fortune 100 and fur which you know 25 and cvs is no. 4 in the country. United healthcare is no. 5 and express scripts cigna is no. 12 and three of the four are all in this and vertical exec tram and finds public and look at top 20, theyre really eight healthcare related or seven for sure. Not sure whether youd say wall greens is more of retailer or healthcare company. Seeps inconceivable these companies could be that large and pushing 98 through to the customers and theyd be able to do 6 billion, 7 billion tock byeio backs and not losing profitability i dont think. Mr. Hudson, you said like canary in the mine shaft and pass on to the lower price to patients and the more you lower the price, the less patients you achieve. Thats the canary. Chairman sanders said this committee may look again in a year to see if it impacted afford and the thats the key question. When you bring the price down 21 a vile ask that could change whats available and what patients pay. Coming back in a year and nothing isye changing and say systems not working. Ask all three of the pharmaceutical companies the same question theyre taking and follow that had and formularies out there and would increase availability and access to lower prices and your sense of that and we spend a lot of time and making it multiple for patients and access tore more affordable insulin than its worth doing and i hope thats the case. Right. Im going to assume youre of the same mind . Yes, i share the same concern. We dont know yet whether we have access to patients we have access to today. I canned a our net price often the rerebates lower than the products and the patients are paying more and the price has gone down or something has not worked. Actually did something about it in my own company across the board too to make them work for my own employees and that occurred in about 2008 and i was sick and tired of hearing how lucky we were through our Insurance Companies and its only going up 5 to 10 per year. Senator powell earlier talked about free markets and he and i will be in agreement on that mostly no barriers to entry and full competition and full transparency and the most important one for senator paul mentioned the consumer has no skin in the game the way its currently constructed. They want it done immediately and dont want to shop around and they want their employer to pay for most of it or the government. When i starteded looking at t hospitals were about 30 of healthcare dollar, practitioners were about 30 to 35 insurance disproportionally more impactful in terms of keeping the whole system glued together the way it is. They wanted their own business to boot. Theyre increasingly being employed by large corporate hospitals that all play into this lack of what most markets have. So pile all that up and to where senator sanders is and people are getting fed upward mobility it. I got fed up with it 15 years ago. The rest of the world can buy drugs for onefourth the price and they have look at pharma it system and take as long Time Investment in rnd pointed out a loath of drug haves a 5 maybe material cost yet sell for hundreds of dollars and very low available cost and very high fixed cost and thats the classic case for how to charge things and dont have it related to your actuall cost of doing business. A sounds like maybe on pbms if thats accurate on a 4 profit margin, assume thats on sales and assuming its a better return on equity and probably not growing your businesses. Something has got to give. Youll get what senator sanders is proposing where all other countries have done it because theyve never found a way to address the broad issues ive mentioned, and probably the easiest place that you can fix in primary maybe healthcare, which never did was insurance intended to cover scratches and dents and never should consumers be in any market where they want someone else to pay 100 of it. Those that can afford it eshouldnt even be under insurance for their primary healthcare. Those that cant should have that support. Otherwise theres never a real market. Ill goa to the thing that struk me thehe most kind of significantly was when i heard senator sanders ask why youre selling. Im sure its simple molecule drugs and biologics and why is this stuff selling minimally for one quarter of price and most other markets you sell to and sometimes one tenth. Obviously youre covering that are variable cost. Why are we as americans paying the bill even though its only 15 of gdp if its not working here. How do we get the rest of the system to work . Why is that . I never was clear and i didnt hear a clear answer other than hyoure going continue to do i. You want start, mr. Ricks . I can. Thanks for the question. One problem with the data its cited as listed in the u. S. And getting paid on net pricing after negotiation and those numbers versus europe are 35 higher than the u. S. And europe and not double some other number. Theyre higher on net average basis. Youre breaking the bank. The thing youve got realize is all the things you say are attributes of the system. They shouldnt cost us 50 more than what healthcare does across the world and in your case, since most people have a prescription has maybe first entry into the Healthcare System and here youre showing us where yourear charging minimally four times as much here if not ten times. I dont think politically that will get you into the next generations of where you will be like a regulated utility and itll be the same format that all of the a country haves had o go to. Ou having low cost medicines today. What that has to do with charging us ten times to at least four times. Why cant they carry . Lily will spend time times what germany does on this year. Why arent they funding it . Thats something to ask yourself or the structure of what youre used to is not going to persist into the future. Because we simply cant afford it. Youre in the business of peculiarity of outcomes and r d and bona fided and defaulted down the line and dont need pbms and weve had that conversation. Was that seven minutes, mr. Sander s . Six minutes. Ill yield the floor and have a discussion further. Thank you. Hesenator smith. Id like to start with going at how this system affects folks with who dont have Health Insurance and my first work in the senate focused on this when i met my fellow minnesotan and Nicole Smith Holt and heard about her son aleck, who i believe chair sanders braced at the beginning and died of quito acidosis and couldnt afford his tinsulin and diabetic patients need different drugs and insulin base odd on their body and what works best for them. My first question to Drug Companies can uninsured patients access each of your Insulin Products through y all of the Patient Assistance Programs at somewhere between 25 and 35 is the range of prices. Im sorry. Yes, the answer if youre insured kept at 35 for every eli lily insulin and uninsured and below 57,000 a year its free. Doesnt matter what insulin. All of them. Okay. Mr. Hudson. The same for us. In fact the data is uninsured patients use that facility over 100,000 times last year. Zero copay. For all of the Insulin Products you offer. We offer a program where they have access to free insulin and insulin in the situation to ration and we have insulin for all patients. Patients being charged list price if they dont have insurance. Im having cognitive distance and understanding how this all works and why dont you just lower the list price for all of the medications. Youd be willing to lower list price and let me turn to the pdms and they wont charge rebates and lower list prices and well be all done. I can answer that, senator. Weve been asking for years to lower list prices and unfortunately the lower list pricesng are coming far too late compared to when they could have occurred years ago. Now theyre coming because of the medicaid cap thats going away. So theyre going to be exposed and well have to pay more and theyre doing this because of Government Intervention not because they want to lower the prices so we welcome them to lower list prices and then well be excited to do so for the value itll provide for our patients. Mr. Joyner. Similar already to express scrips, wed apply and enjoy the lowering of drug prices. And then this gap that senator doll linns showed o colins showed on her chart is the rebates and discount and youd get rid of those. Yeah, i think theres two things. One is thats what the pbm has done to date and prices announced on that chart and its below the cost theyve listed for coverage. Mr. Hudson. Just to be clear, it was 2018 we brought a lower price and nothing to doht with recent policies or announcements. Reduced the price of that three times to no effect and then it was last august that we brought made in the same factory as i said earlier and unbranded 60 of that long before this years debate. So im a bit perplexed because they hav been there and we stepped up and done that. Im perplexed too. To the pdm executives, what do you say to this critique that your profitability is enhanced or higher when list prices are higher . Ill give thes example becae i think its an important point thats being made that a lower list price being brought to the market has not been accepted by the pbm. S set up, this critique the pdms do better when list prices are higher, is that an unfair critique or how do you see that . Senator, our focus continues to be for our employer, client, patient we drive to the lowest net cost regardless of where the list price is. Its an interesting example. When it did not have competition between 2010 and 2014, actually doubled in price. The price did not moderate until 2015 mbl competition enter the market. This comes about 3 that increased about 20 in the 2015 range. Have certainly more than tripled sinceri that point. The question on other products and how expensive they are. Letters competition to drive that youll see sky hyatt list pricesti. Were going to do everything we can to bring those prices down that maybe the form of rebates so we can provide discount spectrum players in our patients. Proximate bubble about that if i could. Actually, senator braun and i tomorrow will be marking up legislations under bra and i introduced that be a bill to bring lower cost generics to the market more quickly. That only benefits patients have access to them. This brings me to the formularies basically determine what patients can get at what cost. A recent study shows Medicare Part b great proportion of generic drugs on higher tiers which leads to increased patient cost sharing. Another report shows similar trends forcing patients who end up paying more for generics because of what tier they are placed in on the formulary. Can yout explain how you see that . What is going ond there and why is that happening . Why does it appear as not been passed on the patients likely wouldve expected and hoped customer. Center we are absolutely supportive of legislation that could help to improve the accessibility genetic drugs. That would remove paper delay, will provide faster accessibility to more competition in the p p market. We welcome anything that can help to do that. On a similar front we welcome reducing the patent expiration now from 12 yearspi to seven yes to create more competition enter changer rules. Easier for manufacturers to come to market and be competitive. Think it mr. German. What percentage of those back to Health Care Work similarly we pass along a majority. 98 but all clients for. What goes back to your Parent Company United Healthcare where customer can select from the other 5000 we pass on the 98 . Night healthcare is what it would pass along 8 the discount to a client. Doctor maybe can answer the question better. What percentage of your rebates are picked back . Or who send back more than 95 of our clients by do not the exact number that is passed to cigna healthcare if thats theo question. This exactly what he said any idea what percent your cap kickbacks go back westrick was you dont have kickbacks to our company. We do pass through 93 of our customers retaining for . Tell me how much is going to admit . I guess back to our Parent Company cvs health. We certainly agree most everybody agrees america spending too much on Prescription Drug. That is almost what we are spending on the military. I do not to tell anyone here but want to understand per capita almost twice almost twice what comparable nations spend. I think it is important to separate brandname versus generic street brand names 80 of the cost. For 80 of the, dollars, generis comfort 92 of Prescription Drugs and only 14 of the cost. Those two drugs. Compared to what it was 100 years ago comparing single prop airplane from the f35. Was launched in 19203, so acting engines were active 30s and 9440s. Want to point out synthetic inflows not produced until 1978. I took the industry 15 years to tease e. Coli into making ends on bridges not a simple task. But it took your industry, some of the players are another four years to bring it to market in 1982 and highlight fda approved this in only five months time. Went to the history of this is more advancement in technology. And eventually we are able to manipulate the amino acids and come up with new and better insulin. Able to match what we are doing with her own pain crispers quite a development. We should assure the value of what has happened. You think back to 1921 Insulin Dependent Diabetes was a death sentence Life Expectancy was one or twowo years. He started squeezing insulin out of the pancreas of animal they live five or 10 years they were still 25 years below the Life Expectancy of other people general population. We continue to 1950 theres a 50 year mortality rate 15 years below the general population. 1970 is 12 years below the general population. Im today were setting about seven years below the general population. Its not perfect but because these improvements we have gained a lot of progress. Mr. Hudson what is the future look like for you very briefly innovation opportunities . Thank you for sharing the journey. Its important to realize contribution and continued improvement has made. The next is to help h patients protect the insolent making function they have retreat theme earlier. Triton stop the progression of the disease. Tried to halt the degrees give young adults to live insulin g free for a number of years or indefinitely at the trial that. We do not know. But a life free from needing insulin medicines in general is the goal. Owing to be careful we do not throw the baby out with the bathwater. We certainly think Prescription Drugs are too expensive we do not want the root of the innovation if at all possible. I want to turn back to the pbms for Second Period i get the 6dollar prescriptions for in this country. Pbm Gross Revenue last year which 500 billion. Eightyfour cents on the dollar goes to the middleman. I what america to see what happened in this industry. This picture paints a thousand thwords ocs the integration that is occurring within the industry. Mr. Hudson the dollar being on Prescription Drugs what amount of that moneys going to go the middleman . I want to get this on record again. 84 cents of all insulin on the dollar goes to the system or the middleman. Its 93 across all channels 93 for. Mr. Rick somewhere in that same range . What similar insulin 80 cents on the dollar for us for the whole medicine is about two thirds come cvss are for unitedhealth or, cigna is number 12. Turn to my executives from pbn spirit you all been forming gpos. Doctor, or is the location of your gpo . What country . Senator is located in switzerland. Wheres yours . It is domestic with the delaware company. Mr. Joyner was yours . What certain things as well delaware. What is the purpose of the gpo . What is the purpose of the gpo i hope you do not tell me too increase purchasing power for. It is a good producing organization is designed to allow other companies, companies to negotiate pharmaceutical manufacturers to increase the counterweight against those prices. Negotiate Additional Savings for drugs. Both feel like is a shell game to me. That isin what it feels like toe were hiding many here and there. Mr. Joyner on evensons lessexpensive insulins on your list of drugs you can self . To think the mentioned earlier we have. The atlantis example which is very highh w price insulin. You are telling me the pharmaceutical managers eat makers dont get the story right . They all three said there is certainly drugs they have for sale you will not put on your formulary. Quicktime is not on the formula is not the lowest net costs in the therapeutic class for. Why would you put some of cothese on . Im sorry, thank you. Enter hassan . Thank you center chair and Ranking Member cassidy for the hearing. I want to thank all the witnesses for being here today. Start by following up on senator smiths line of questioning. I think all of us here would like a world in which her doctor writes you aes prescription and you go to your pharmacy. In the pharmacy produces the prescription at a predictable price of the Drug Companies tell us is there price. That is what i would like and i would like us to be a low price. Everyone of us us have experienced going to the pharmacy counter being told by a pharmacist standing in front of a computer this wont go through or you are going to need to pay 300 on your copay for medication to supposed to be 10 but for this when it is 300 and they cannot tell you why. We all know, you all know. Everyone in this room knows when youve got a child who is sick or a loved one who is sick and you just want their process of getting a diagnosis and getting a prescription hope is going to help this is the last complication you need. So it senator smith asking about why not just offer to the pharmaceutical reps here why not just offer insulin at the price at the pharmacy counter . New line then let you recently announced you would have insulin for 35 or less. Mr. Hudson and mr. Jorgensen your company so said you have made similar commitments. My question is, and your patient assistance plans, how does the patient go about getting this assistance if what you said its 57000 income virtual. What happens to people who are not on one of these plans, or who are uninsured in terms of getting the actual assistance you say is available to make sure people do not pay too much for insulins . I can start thanks for the question. Its important weve all had the that you just described for 35dollar buydown anyone was a Valid Insurance card that covers lily insolent automaticin and 8 of cases only reason you 15 the art the pharmacy Computer Networks are not plugged in yet but we are working to close that ,gap. Someone has no intrinsic to obligate will eat. Com literallyc a few clicks qualify for the coupon ensure that at sale. Reagan phone number and we will help them. Whats okay mr. Hudson . About the same unit of value. Com you can do that. Go to many of the Patient Association website get a connection of your uninsured to go printed off you get your and some for free. Click to print off some sort of coupon or application . How lengthy is the application process . What kind of information to people have to provide . You can start mr. Hudson progress is not that complicated. 0it was over one 30,000 times it was done for the uninsured. Andre over 600,000 times for people to reduce appropriate it is very straightforward. What to think its very straightforward for you im not sure it always is for patients. A case of an emergency which we have heard about the terrible situation that should never occur we all agree on that. If you contact willie today will ship you ata month supply with e question whats your address . And then need to enroll in an annual program if you are below the 57000. But that is for the next year. But in an emergency its actually simple. What happens if 58000 . What you are eligible for the buydown the 30 the pointofsale. When it many cases people are between Insurance Plans at the shortterm need and 35 is reasonable they can buy 25 just often purchase without insurance now. Mr. Jorgensen, where is the process like for patients for your company . What does a similar process. I do not live in the u. S. I took the time to go to the u. S. To ask about some of these and we have enhanced our programs it is for patient without insurance to go to our website it is a few clicks and you get access. These prices send 30 go to buy a bottle of insulin that is 25 it takes the paperwork whatsoever. Think it terms were represented to the ppm now. This following up on point synergy was trying to make her did make. We heard today manufactured taking steps to lower list prices and overthecounter prices of insulin. However patients with insurance might benefit fromr, these prics also step up to make sure the lower cost options are covered. So mr. Joyner and doctors tower each of your companies ensuring lower costs insulin including generics are available to patient . Its a very good question. We start with using competition to negotiate to the lowest net costs. Once we do that that passes on to our employers and Government Entities et cetera in order to manage the benefit. We encourage them with the savings generated to the rebates andce discounts to actually offr more affordable benefit improvements use discount pointofsalesc. 10 million lines of done the preventive drug list ripper large number of customers during the preventative which is a report on average the actual cost of insulin is 25 or less but cbs helped specifically earn 200,000 employees who want to make the model plan does a pasty discount pointofsale have preventive drug list so our employees actually pay zero we are very much in alignment. Are dropped from going to you to address the same thing. Im going to follow up i think it was senator marshall to just say we are hearing Something Different for our pharmaceutical manufacturers here to list the lowest priced drugs insolent on your formularies. When to an address the question . Think you senator. Back in 2020 we cap the cops of insulin across all different insulin. Working with these manufacturers at 25. Last year utilizing announced another copay Insurance Plan. This plant caps not just insulin but for all employers adopted all of the are just 25 theyre not specialty drugs it keeps it very, very affordable or expanding our preventive drug list as well for those employers have High Deductible Health plans or hsa accounts. Having additional options were today medical and pharmacy are combined in the deductible separating those pharmacies the most utilized component of the benefit 11 times of year having a separate pharmacy deductible would be another benefit for patients for. Think im sorry for not going to try last witness our time is up i went to follow on the relationship she will have independent pharmacies especially rural parts of the country thank you. Chairman again thank you panel for being here. In your testimony you said your bms have formularies the placement of Prescription Drugs using clinical foundations. I like to understand this a little bit better. Asl you know this committee is going to vote on a bill tomorrow ask about the rationale for replacement. E. What you mean by clinical foundations for formulary replacement . How does this influence a patientsoe ability to fulfill a prescription from the doctor . Oh sure, thanks for the question first to be clear art formularies have some the drugs we talked about today which are rebated but also hundreds of drugs generic that are meant to be the lowest cost options for customers on behalf of theirof consumers. But it all starts with clinical evaluation by independent committee that evaluates the efficacy of the outcomes of this therapeutics before they can be offered on our formularies. Its okay, thank you. In North Carolina about 40 over 10 million residents live in rural areas of the state. Extra pharmacies is critical for those rural patient delivered from north carolinians about rural pharmacy closures in their concern aboutlo them. What steps are your company taking to make sure Rural Americans have access to pharmacies to fill the prescriptions . Exodus good question. As a reminder independent pharmacies especially rural markets are an essential part of our pharmacy network. In many cases they represent close to 40 of all the pharmacies in our network today. We do negotiate generally. I would call a Group Purchasing organization for independent pharmacies come together with large wholesalers structured contract specifically for them. Our contractsts are with purchasing organization attire further changing brokers or pharmacy. We reimburse them more when with large purchasing organizations to improve theth purchasing. So he believes an essential part of our pharmacy network. Thank you forar that. It is extremely important for our organization to ensure patients to have access regardless of where they live in this country been p proportionay today less than 10 of physicians limit Rural America over 20 the population does. We are work with independent pharmacies, improving overall reimbursement rates for rural enpharmacies after 10 . Secondly we are work with them to do things beyond pharmacy to provide improved access to care of other services. Whether they be for diabetes testing, vaccines, doing components around Behavioral Health testing, opioid. Those are Additional Services the right qualityo of care be accessible, we go to your doctr or they may not be enable rural and independent pharmacies think and beat much more of a Health Center so people access to quality care regardless of what zip code they live in america. Thank you forve that. Independent pharmacies make up over one third of the network they are aof critical part in their service is unique. The focus i point to for our Community Pharmacies is number one increase reporting, predictability reimbursement and reimbursement that addresses your unique m Business Model to get the revenue enhancement opportunities in areas they are uniquely qualified such as medicare adherence coaching. Diabetes, most importantly identifying barriers to things like rationing and inability to get insulin buried in many cases are the source of trust and access might be the only trust and access in a community. Thank you, thank all the witnesses i go back. Think you senator. Thank you, mr. Chairman thank you in the Ranking Member for the hearing and think of our t witnesses for being here. Going to be rather brief in light of the time of the vote is going on. I do not think i have to explain to anyone in this room. There is a consensus when we go back home we hear from people about the cost of Prescription Drugs. Its for a lot of families like a heavy bag of rocks on their backs every single day. We have got to do a lot more. Both sides of this table has to do a lot more to lower those costs. For happy the reduction act of those costs down for medicareho part two. Happy Company Took Action after that. My question is why stop insulin . Going to ask on my left side of the table starting with the mr. Ricks i just want to in one minute, you being then first 11 minute itemize for mee specific steps for Companies Taking right now or will take to lower the cost of Prescription Drugs more broadly beyond insulin . Thank you for the question. I totally agree with your sentiment we need to do more. We are working on a number of things for us only cap outofpocket costs for basically all of newly branded medications. Typically 25 35 United States people with insurance should have a limit of what they pay no matter how much they use. That is a step youve already taken increasingly talked at length family dysfunction in the system or break lower list price is not presented as ann option. I see a future where there will be more products introduced with two forms the high price and a low price to those in high deductible plans will have a choice thats cheaper for than that is something we can do. The third thing i would say is we support policies that have a system where theres a beginning and an end to patents at the end competition should floors we do support that system. Ultimately a chairperson said earlier about lowcost generics in america that is a Success Story for American Healthcare we have cheapest generics in the world. We also support a world where we can afford to advance the product that became generic to begin with. That requires a premium. If you could itemize for me . Start with outofpocket commitment as well 2022 the copay card was used 2 million times the cost upwards of inner 50 million. We are all in and try to make sure we help. We have a rather challenging Healthcare System in. Trying to help patients make sure they get on the other end. I accept as well it may be that we have to have high and low price. I think it is somewhat disappointing that has to be the case there has to be a better way were lower prices lower outofpocket in a reasonable fee for Services Provided on the chain. Similar i think by a similar penetration in the u. S. Legs the rest of thehe world. And i think it really should be 60 or 70 mirroring whats happening in europe and other places and it isnt. We have to look to why that is. We bring them forward but is not for us to choose what goes on a plan thats a broader conversation about how to reduce healthcare costs the unitedni states. Thank you, senator prevent similar programs patients who have insurance get copay support from us. They typically pay around 25 and copay and for our patients without insurance we have programs for all of our products. I would just add we should really focus on what is of the patient pays at the counter . We hear passing on rebates to clients. But its really what the patient pays at the counter. A similar question about what additional steps can you and the other pbms take to ensure patients can afford Prescription Drug costs . Ogle back to the original premise that competition works. So we will continue to look for competition in therapeuticmp categories. Lowering the cost for Plan Sponsors the employers and et cetera that pay and fund the benefit. And then encouraging them to adopt benefit designs that actually allowed to be more affordable for us. Similar to what we do at cvs which is 0dollar copay for insulin. Doctor . Thank you for the question senator. We are actually focus on continuing to lower costs for our employer plans. For our clients but also for patients. We just flat dollar copay 5 for generic and specialty generics. We are bringing out to our constituents. Competition containing to beat the drum bio similar accessibility, interchangeability having more access and t reducing biologic from 12 year old to settle your handset competition will flow through to have additional options in the biologic space. Theres been a lot of unjust place. Care is also a key moment of what we do must continue to do. Im patients are on the drug in the drugs are able to help the with Specialist Health and wealth based on specific diseaso states multiple grosses and diabetes. If you have, berkshires that are trained and can help the patient. Through our m80 patients that have specialty conditions are a parent on the medication think and have had better Health Outcomes feel better and healthier lives. They give to the question centerpoint at the things the first is a continuing commitment to work for lower drug costs. That is negotiated saving sort list price for looking for lowest list prices for we embrace the lower list price insulin structures we request more but one example bio similar for a highly utilized drug humira. Have and are coming to market our offering up to threear of those at parity with the original product. Patients, their prescribers and the health plans and clients can select the best option for them where the bio similar manufacturer offered low list price we are offering the low list price for the second thing i will point to we will continue to recommend a pushan for beneft design for our client that would use the savings that we negotiate and put those two consumer outofpocket costs. Particular in the high deductible plann the third thing when it should be confused with the pharmacy. So additional tools to help consumers navigate their benefit. Understand the best option in generic and branded drug so they can find the best affordable option for them that is our commitment. Thank you, mr. Chairman. Thank you, senator. Thank you chairman. Went to make it open comments here i kinda feel it is freezing over. Chairman sanderson i agree on something. Something needs to be done pbms. I do appreciate you having this hearing inn the order we are having it come chairman. Thats a compliment coming from my site if you can believe that. I want to point out this chart by patient chart work starts showing how pbms integrated themselves and become their own customer garden and house. And it is difficult when you start thinking about Congress Actually one to help stand up the pbms to bring down costs. We have seen cost you nothing but skyrocket on Prescription Drugs and at theke same times he become literally a billiondollar industry. The last five years alone you have seen Prescription Drugs increased by 16 . The same time you seen a net income bms and their integrated Companies Grow substantially. Start thinking why . A billiondollar industrys growth of the crop because of ntaxpayer dollars. It is got to be going to the drug costs bruce going to the drug costs was ultimately paying the price . Well, it is the consumer obviously. The monies that he passed on to someplace its retail politics and its retail consumers. The price has to be made up because every one of you guys are in business for profit thats a great, thats called america youre able to do that. To bring down on some things that maybe need to be clarified. For instance, senator marshall is asking the question why is it some drugs are not able to make it to the market . And i believe it said they are at the lowest cost. But, mr. Hudson minette, was being made your shaking your head what prohibits drugs and coming to the market especially competitive drugs competitiveness brings on the price and i agree with that. But i dont think you agreed with mr. Joyners answer when he said its based on a formula which covers the cheapest for the consumer. And i was noticing reading your body language youre going like this. Can you explain more from your perspective what keeps drugs from coming into the market . I think perhaps what i was reflecting was a lack of unknown. As i said in 2018 we launched a low price into the market last year a low price and direct equivalent made the same factory. You would expect if price was the answer and perhaps we talk in slightly different terms. The idea of cost versus price im not sure the above site and reflecting on the fact that if the intent of the chair and everyone here is to lower the price of medicines we do and it doesnt change for patients. You brought a generic to the market that was significantly cheaper than the other went in but it did not reflect patient payment . It did not get listed anywhere. If price is really the motivated request to prevent it from being listed . I was not part of that conversation affects the pbm spring that to market, right . My assumption is the pbm. Youre being politically polite here and i appreciate that but i think we canan all rd between the lines on this one. When you are talking about rebate checks because the comments were made earlier the question about rebates are pbm officials over here saying they go to the customers. Which im curious to the customers are because i think the publicth would assume it gos to the public the individual to the person buying the drugs i have six kids who always seem to be in the emergency room and seem to be getting Prescription Drugs or something. And i have never gotg a rebate check. So who is the customer . Where do you send your rebate check to . Thank you for the question we send them to the pbmc. Were to get mailed to . We were instructed to send them to the gpo. Was a gpo . Lexi was asked earlier the various organizations. What country are they mailed to . Out of the United States . There some to go outside of the United States for. Attitude of how much can you guess . External rebates for commercial paid to the major three was 8 billion sought a third, third with her but roughly the progress of the chart was outside . Several billion. Yet these are customers for inside the United States . Rebates to access to u. S. Formularies for. Your rebate checks are not that sings and enunciates the biggest chunk of them . Correct or a big chunk for quickset is interestingre too. Wonder why that is . And so when we Start Talking about customers for the pbms, who are your customers you are referring to the rebates go to . You say that pbm escape 97, 98 resend up 9798 of your rebates, right . The customer is the Insurance Company, right . Senator, has over 2500 customers. Any many of them are employers small middlemarket employers to large employers. Labor unions are clients. Public sector and health plan. But also your Insurance Companies, right question at the whole reason is to supposedly bring down premiums. But yet if you look at the type top line where it says insurer the pbm only Insurance Company rebates are going too. So you are rebating your self. That is well, great Business Model. And we wonder why prices are high to our consumers . This is why the chairman and i n actually agree on something . This is not working for america. Its working for you all great. You guys are killingt. It. But if we are talking about bringing down prices what have you all done to bring down d prices . Hows the whole reason you were created to bring down prices but we have seen nothing but increase but is not going to pharmaceutical companies that are making it. Its not going to the pharmacist unless you own them. If you own them you dont care if it makes it because upstream toward jones dream thats where youre getting your money back. Wonder why you are here . Are you actually serving your purpose . Heck no you are not. As i have said before it is like the fox guarding the hen house. You have literally forced us to make the changes. Might private company five an entity that isve not being effective for what their intended purpose is i would shut them down. And that is what i think the solution here is and with that i yield back. Thank you. Senator lujan . Thank you, mr. Chairman i appreciate that line of questioning as well, sir. One thing and one to share with everyone as we open up today is one thing i am very proud of his in new mexico as you may all know recently moved to cap insulin at 25 for a 30 day supply. We have more and more state to state. I appreciate agreements to make insulin more affordable at 35 as well im hoping we can find Common Ground to expand upon that we talk about folks where this is make it or break it. For me that has new meaning some may know i survived au stroke about a year ago. Folks dont get their insulin it would be if i didnt have a neurologist or a neurosurgeon. Its a choice you cant live without. There are too many families back home that have shared with me decisions they are making trying to make that insulin lasts longer than they should. Making decisions about what they are going towh buy. I joined my colleagues and saying whether to this or in other areas, theres a lot in our country i do not want to get in the way for innovation. Do not want to stifle research. But when we have something that can transport someones life and save someones life there is got to be a better way for us to make this affordable so families are not having to worry about other stuff and they have the stress on top of whatever that insulin is going to help with. I can say that stuff does not help. You could wind up in the same situation i was in. Now, while im proud of what we did in new mexico as you all know also the policy left out public players. There still almost 20000 people that need insulin do not get the cat. Thats one of the reasons why i wanted to be here today. So mistress joyner what percent of appeals for coverage are denied for the insulin prescribed and preferred by a patients doctor . I do not have that step, sir. We can pull that for you senator and get it to you. Quickset appreciate that doctor. Is it miss cianfrocco today peninsula properly . Yes similarly bring a file of your office with the exact number. I appreciate that. Because in the end here being able to work with physicians and well and try to bettere understand what happens when there is a denial. Im hoping we are not going to see high rates here. I would not be surprised if we do but that is another area where we can do some work and make sure people are getting with their doctors think they should be getting as well. It is another conversation ive been having with people back home. Mr. Riggs, mr. Hudson mr. Jorgensen your company should meet recent announcements about reducing list prices to some of your Insulin Products. And i very much appreciate that. What mike team tellsac me is according to cdc about 16 have of people in the u. S. Report rationing it because of. Something i was saying earlier. Mr. Jorgensen yes or no can you commit to keeping the price of your current and future insulin prices affordable . Yes we have a free option. So people are in the situation that have to bring they have can get a free or at leicester more than 60000 americans got free insulin from our company regards appreciate you saidin yes. That is important to me as we talk about future insulin prices. Mr. Hudson yes or no can you commit to keeping the priciermm current and future insulin a affordable . We can commit to that. Is ricks own just the same question in its approve for weight loss we keep that affordable question text yes we will connect to that and already for insulin is 25 a cap for everyone too. I appreciate that pearlescent way to point out we know these work. When there was an effort to cap Medicare Part d, we saw about 9000 new mexicans are going to benefit saving for the 43 right off the top. Thirtyfive dollars cap here i am hoping because of actions that were taken and everyone involved we can find a way to get there. But, this probably going to have to take some action and im hoping congress is willing to do so, so when we are talking to families that is something we can all quickly or with the work, the research the investment made in these spaces we are going to say yes we can save peoples lives. We have these incredible scientists and doctors developing the lifesaving technologies that we are doing it in a way that should 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. Im certainly hopeful we can get there. Mr. Chairman i just wanted to come in and share a few of the stories we heard from people back home as well. E and again understanding access to care im like i said this matters to me a lot. Before this last year theres been a bit of a revelation to me that when you get sick, when you need help, you need prescriptions they should be there for you. Otherwise she might not get another day to fight for other people. Someone decided i was going to get another date. So im going to be here, going to smile, im going to be nice but i know how to fight two. I h am certainly hopeful we can find a way to get this done together, thank you, mr. Chairman. Thank you. X think it mr. Chairman very much. Obviously representing massachusetts im very proud Biomedical Research and development. The challenge remains much innovation is locked behind walls of researchrc institution. Drug manufacturers, and mazes of pharmacy benefit managers and insurance. Innovation without axis 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 insulin. When patients dont get the insulin they need they show up in Emergency Rooms. In acute crisis patients receivingpa 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 china to announce cuts and insulin prices. Some of these forms of insulin have been available since 1996 and prices have only been going up. Ice cuts that did occur follow it intense public pressure and drug price reform and 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 had not occurred in a generation. Mr. Ricks do you agree with that that congress has a role here to play . Center, thank you for the question i agree everyone here has a role to play in the case of Little League started our prices in 2017 implement programs including halfprice versions of her own bustling products and 2019 but its been going on for a while but i agree everyone can play a role progress you agree withut that . Ask mr. Hudson . Think everybody does have a role to play we have responsible pricing in 2017, lowercost versions are most popular version of insulin in 2018 as early as august last year an rancid atlantis made the same manufactured by the same highly qualified people at a much lower price. I think we are all trying to do our best. I would add importantly we are yet to see if it makes a difference for patients whether theyre out of pockets go down by their access goes up whether the lower list price actually has an impact on the choices and what they pay themselves big. Again that is just another reason why congress should act. To put together a format that insures these benefits flow down to those most ine need. And think what we are n seeing n the last couple of years is once congress decided to act got everyones attention in theev industry. Some of it was involuntary, some of it was coerced. But from my perspective it did demonstrate the need finally for theyi congress to be playing a role because the system is broken fundamentally. We have to find ways of ensuring that all of these benefits ultimately flow down to our most vulnerable. Mr. Jorgensen do t you agree Congress Acting has helped to control the drug prices out in the marketplace . sanofi we have had declining prices since 2015 we tried to launch products with a lower list price. I agree with you the complexity of the system creates a flawed system where patients are not getting thee benefit. We should again really focus on the patient what happens on thet counter if you have insurance with a high deductible and end up paying aienc list price thata big issue and thats a story i hear from many patients. They are in a very tough situation. For those patients reverted pass on the rebates. Just this week eli lilly announced positive results are based three trails on its own sealzheimers treatment. Justice insulin for people with diabetes keystrokes could be a lifeline for people diagnosed with alzheimers. But comparable drugs on the market cost over 25000 per year. This is completely out of reach for most americans. If the medication is covered by insurance it will weigh heavily and ultimately on taxpayer. Eli lilly has demonstrated they can reduce their prices compared with their competitors. They have done it. Thobviously this is a good exame were talking about here today. Mr. Ricks will you commit today to offering your alzheimers drug at prices lower than your competitors . Thanks for the question we are really proud of those results that you are highlighted weve been working alzheimers for three decades and spent over 8 billion to get to that point. Today unfortunately there is a blockade on medicare access for Alzheimer Drug the first we need to talk about is how to remove that. Because as you can imagine most people rely on medicare who have the condition. When you have Medicare Coverage the outofpocket costs will naturally be low. In the primary issue is to live that provision for medicare progress i did know that appreciate that. Your sink on the one hand we like to help patients but we have have the federal taxpayer to cover it. That would ensure obviously you would get c paid. But the question then comes back to you. What can you do too lower the price and make it more affordable separate from a medicare reimbursement . That is the central issue we are doing with her today. The profittaking from corporate perspective the catastrophic pricing and the federal tab. Nment pick up the that is something is hearing is intended to finally put a spotlight on in terms of corporations reducing the pricing may be having a more reasonable discussion regard. A recent pricing that will have value to the Healthcare System. Unique to alzheimers used to be paid into the program entire life. That access to every type of pharmaceutical for every other condition. But not alzheimers right now. Pointing out that flawed in the current system. That needs to change for a collection 25000 a year people are going to have excessively ball comes back to you in your court to lower the price is youre looking up this vast number 15 million baby boomers who are going to have alzheimers. And that is just for our country. Your market is going to be a massive 25000 per year. Its two extraordinarily high. X2 quick questions. Both of you spoke of one to acknowledge that. Both of the rural pharmacies as well as the people within their deductible. Its a question of how do we get wider spread adoption at some of the things you all are doing i would actually address the things we are frustrated about. Did i hear about in church, let me go, let me go, go perfect dont give a real quick comment on that. I will call you appreciate our conversation. All of things you have that is there a way we can get better faster uptake in the market for that . Thank you for the question senator. Absolutely. We are leading the way on patients having accessibility and affordability for the note copay Insurance Plan we develop. Sanofi is an employees night one or implement that and lead the way. Pharmaceutical manufacturers to help us offset thee cost to employers as we bring down the cost of getting 5dollar generics, photo specialty specialty generics and 25 valida reasons. In terms of our initiative read helping independent pharmacies we are absolute work with them in partnership with the gift create a committee with other independent pharmacies from across america so owners of pharmaceutical help form. We can very quickly implement some things i spoke of. We are excited to work on that and make real improvements especially for Rural Americans request thank you. I dont know this i dont im told that what i know. I told the rebate aggregator is where a lot of money hangs up and is not included and 98 pass through. Your answer suggested no vertical integration a company 98 mp is passed along i do know the answer to that. So, is what does money hang up in the rebate aggregator for, no matter where it is the vertical integration of the company 98 of our rebate and fee respect to the plan sponsor . Editor, 98 total discounts go back to the plan sponsor. For our gpo it does not cost the client anything. Itfo is for the benefit of the client with no additional cost. Thank you very much. Thank you, senator cassidy. Let me begin by thinking all of you for being here. I know you had to chuckle your schedules. With that mark for being here as well. I think anybody who hashe listed to this hearing as concluded the system is broken. It is enormously complicated. There is virtually no transparency. And of the price medicare will pay for drugs different than medicare which is different than va pays hospitals pay a different price and doctors pay a different price. All of that opaqueness, lack of transparency works for both the Drug Companies and i think the ppms as well. The end result is weve got to conclude there is an enormous amount of greed going on. Members have touched on this. Lets not all be naive. Major Drug Companies last year made 100 billion in profit. Ppms made 27 billion in profit. Drug companies it goes into development. Guess what, not money when stock buybacks, significantly more that went into research. So wall street and your investors are making huge amounts of money while ordinary americans are going bankrupt trying to afford the drugs that you sell. And i have got a real concern that many of the new drugs coming up are outrageously expensive. In n fact, nearly half of all te drugs coming to the market are over 150,000. I do not know how somebody got cancer pays one or 50000 for a drug. And by the way i talk to a leading oncologist who told me that in some cases it cost a few bucks to manufacture those drugs. All right, let me just conclude by saying this committee is going to stay on this issue. We need profound change inou the industry and in pbms Group Tomorrow or having a markup on a very modest set of bills. We are going to come back for it when you go to sleep tonight, i hope you ask yourselves, think about the people who died because they cannot afford medicine. Think about that millions of people not even in the United States whoni could not afford te products that you make that cost you a few bucks. I, for the life of me just do not understand how when you have something that saves a light and it cost you a few bucks to manufacture a new art of making huge amounts of profit why we cannot make that Product Available to all at a price they can afford. That is a moral issue. So we have got a lot of work to dork. But we clearly need revolutionary changes in the way we do Prescription Drugs in this company country. Thats tied into the effects on the republican senators have made we are spending twice as much per capita on healthcare in this country. Drug prices are an important part of that people cannot afford drug prices in healthcare but will afford to continue to work with you thank you all very much for being here. S this is the end of the hearing today. Randy senators who wish to ask additional questions, questions of record will be doing 10 business day at may 24 at 5 00 p. M. I asked unanimous consent to entry at the one stakeholder outlining their views on insulin access and affordable crisis the committee stands adjourned. Thank you all very much. [background noises] [inaudible conversations] [inaudible cspan2 a picture of front rest. On the campaign trail with announcements, meet and greets, speeches and events to make up your own mind. Campaign 2024 is bent now our free mobile video app. Online at cspan. Org. Your unfiltered view of politics. American history tv, saturdays on cspan2 exploring the people and events that tell the american story. 8 00 p. M. Eastern on lectures and history Boston College economic professor on the evolution of job skills how computers and robots have changed labor markets and the tops of jobs available. 9 30 p. M. 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