Drug companies need to step up as Congress eyes reforms

February 7, 2019 GMT


This week key committees in the House and Senate held focused hearings on the cost of prescription drugs. In both cases, pharmaceutical CEOs were asked to testify and declined.

This issue has been building for months and it appears that there is bipartisan interest in addressing the problem in the new Congress. President Trump addressed the issue directly in his State of the Union speech Tuesday evening.

For private-sector CEOs, testifying on Capitol Hill is never enjoyable. But it is their responsibility to provide on-the-record answers to tough questions so our representatives can be informed on public policy issues.


In the case of the Senate Finance Committee hearing, none of the pharmaceutical companies appeared and two of the CEOs said they would only meet with Chairman Chuck Grassley in private.

The Iowa Republican was less than pleased.

“I want to express my displeasure at the lack of cooperation from the pharmaceutical manufacturers recently,” Mr. Grassley said. “The Senate Finance Committee has a long history of working in a bipartisan manner to solve difficult problems for the American people. So, when [ranking committee Democrat Sen. Ron Wyden of Oregon] and I invited several pharmaceutical companies to come and discuss their ideas to address high drug prices, I was extremely disappointed when only two companies agreed to do that. The companies that declined said they would discuss their ideas in private, but not in public.”

The Senate panel “invited the heads of several of the largest drug companies to testify today,” Mr. Wyden added. “They weren’t willing to come answer our questions about why their products cost so much. Even if it means using our power to compel the drug company CEOs to show up, they will come before this committee. ... It is grotesque that price-hiking drug makers have turned American patients into beggars.”

Mr. Grassley and Mr. Wyden said the panel plans to explore the causes of rising drug prices, the complexity of price-shopping in drug advertising, and the need for more transparency from pharmaceutical companies. The two lawmakers have introduced legislation that would prevent the manufacturer of the EpiPen from unreasonably inflating prices. Mr. Wyden pointed out that insulin prices have increased from $29 in 1996 to $275 today, even though the drug has not changed much.

Another area of focus are the pharmaceutical benefit managers, the so-called PBMs, who Mr. Wyden contended make a profit without providing any benefit to the consumer, driving prices higher.


The House Oversight and Government Reform Committee had its first hearing of the year this week and the subject was reducing the cost of drug prices.

Chairman Elijah Cummings, Maryland Democrat, highlighted the role of PBMs, the inability of Medicare to negotiate lower drug prices, and the exclusivity period for new drugs as areas he wants to explore.

Congress is deeply divided and there are precious few areas of true bipartisan legislative potential. But Republicans and Democrats on Capitol Hill have promised to tackle high drug prices this year and their work began this week. Mr. Trump gave the effort a high-profile endorsement in his speech Tuesday.

The reality is that the high cost of prescription drug prices directly benefits these companies, at the expense of consumers, so any legislative effort to lower drug prices must begin with these companies. Would these drug company executives rather Congress act without their input?

Big Pharma needs to ask itself one question: Would it rather be at the table or on the menu?

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.