Bad actors in the pharmaceutical industry are engaging in unconscionable practices—including annual price spikes on existing drugs and efforts to decrease competition—that hurt patients and public health and bankrupt families. Yet, for far too long, Congress has done nothing, refusing to even require the basic transparency necessary to shed light on companies’ deceptive practices.
For the past year, my colleagues and I on the Senate Finance Committee have worked together to draft bipartisan legislation that would lower the cost of prescription drugs for patients and taxpayers. As we debated and compromised, one thing was clear to almost all of us: The lack of transparency in our healthcare system is a massive boon to the pharmaceutical industry. I worked with my colleagues on both sides of the aisle to incorporate a transparency study into the bill, but there is far more we can do on a bipartisan basis.
By keeping their pricing strategies, negotiations with purchasers and rebate agreements opaque, pharmaceutical companies gain preferential placement on drug formularies and artificially increase utilization by patients, without lowering the actual list price of their drugs.
Drug companies also increasingly use anti-competitive practices and marketing tactics to inject themselves into clinical decisionmaking and prescribing, the consequences of which are only beginning to be revealed. Pharmaceutical companies run direct-to-consumer advertisements and fund foundations to direct patients to certain drugs—even drugs their doctor has not prescribed. This practice steers patients toward a company’s products and away from products manufactured by their competitors. And under current law, drug companies receive approximately $2 in tax breaks for every $1 they donate to one of these foundations.
These tactics lead to higher costs for patients and taxpayers and interfere with the relationship between physicians and patients. They also fuel our country’s opioid crisis.
Recent data released by the Drug Enforcement Administration showed that from 2006 to 2012, companies distributed 76 billion oxycodone and hydrocodone pills throughout the country. That includes 290 million pills sent to my home state of New Hampshire—a state with only 1.3 million people.
As they distributed those unfathomable amounts of opioids, pharmaceutical companies pushed these drugs with deceptive marketing tactics, including advertisements, payments to physicians who were willing to write high volumes of prescriptions, and donations to educational foundations willing to spread misinformation about the safety of opioids.
Recent reporting suggests that the maker of a particularly dangerous fentanyl drug was able to exert influence over the third-party development of the risk evaluation and mitigation strategy for this drug, which is required by the Food and Drug Administration to keep it from being improperly prescribed.
In their wake, these companies left an opioid crisis that is devastating communities across our country.
As the Finance Committee works to address drug pricing, one of my top priorities has been holding pharmaceutical companies accountable for their actions, including by increasing transparency around the tactics these companies use. In particular, Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) are conducting important oversight investigating the ways drug companies are using foundations to provide misinformation on pain management and the safety of opioids.
One way we can jump-start that effort is expanding the Medicare Open Payments database to include payments made by opioid manufacturers to not-for-profit foundations and require these foundations to submit annual disclosures to HHS’ Office of Inspector General. By increasing transparency and eliminating these deceptive anti-competitive practices, we can improve our healthcare system, lower costs for taxpayers and, most importantly, save lives.