McConnell throws cold water on bills to control drug prices, rein in surprise medical billing

Senate Majority Leader Mitch McConnell says divisions within his Republican caucus are keeping the Senate from taking up bills to control drug prices and surprise medical billing.

The Kentuckian spoke "hours after Sen. Chuck Grassley (R-Iowa) said he is gathering GOP support for his bill (S. 2543), and Senate Minority Leader Chuck Schumer (D-N.Y.) insisted that senators also get a chance to vote on House Democrats’ Medicare drug-price negotiation plan if the Senate takes up-drug pricing legislation," John Wilkerson reports for Inside Health Policy.

McConnell said, “We have internal divisions within my party in the Senate on both the Grassley bill and the bill that came out of the HELP committee on surprise billing,” referring to the Health, Education, Labor and Pensions Committee.

Wilkerson reports, "Legislation to control drug prices and curb surprise billing are supposed to help pay for renewing a group of popular health care programs called the 'extenders,' and McConnell said the Memorial Day deadline for funding those programs will 'generate another discussion' on both policies. However, he said the division within the Republican party and between the two parties makes it difficult to get a deal on drug pricing."

The House has passed a bill to let Medicare negotiate drug prices using international prices as a reference, and Senate Democrats support it. "The House bill is more aggressive than the Senate Finance bill, which would let drug companies continue setting launch prices but would make companies pay the government back when prices rise faster than inflation," Wilkerson reports.

“We’ve also told Leader McConnell that if he wants to bring any drug pricing proposal to the floor for a vote, we will demand a vote on H.R. 3,” Schumer said.

During the markup of the Senate drug pricing bill (S. 2543), Finance Committee Ranking Democrat Ron Wyden (OR) said Democrats planned to tie a vote on drug pricing legislation to a vote on letting Medicare negotiate drug prices. Democrats also insisted Senate Majority Leader Mitch McConnell (R-KY) allow a vote on preexisting conditions legislation prior to a floor debate on drug pricing. -- John Wilkerson

Ky., 43 other states sue generic drug makers, alleging price fixing; Beshear sues 3 top insulin manufacturers, making similar claim

Screenshot of CBS illustration of emails among drug makers

Kentucky is among 44 states that filed a lawsuit Friday in federal court in Connecticut, accusing 20 manufacturers of generic drugs of fixing prices and suppressing competition.

Meanwhile, Attorney General Andy Beshear announced that he had also sued the three major makers of insulin for driving up prices. In both cases, he is seeking changes in conduct, recovery of excess profits and civil penalties.

Beshear, a candidate for the Democratic nomination for governor, is one of many politicians who have targeted drug companies over price increases in the last decade. "The criticism has come from across the political spectrum," the international news agency Reuters notes. "Generic drugs can save drug buyers and taxpayers tens of billions of dollars a year because they are a lower-priced alternative to brand-name drugs." Generics account for 90 percent of U.S. prescriptions, one official told CBS News.

The generics suit claims the companies "engaged in illegal conspiracies to divide up the market for drugs to avoid competing and, in some cases, conspired to either prevent prices from dropping or to raise them," Reuters reports. The suit claims Teva Pharmaceuticals USA, the American subsidiary of Israeli-based Teva Pharmaceutical Industries Ltd., orchestrated the scheme.

Teva said in a statement, “The allegations in this new complaint, and in the litigation more generally, are just that – allegations. Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability.”

The 500-page lawsuit "is parallel to an action brought in December 2016 by the attorneys general of 45 states and the District of Columbia," Reuters notes. "That case was later expanded to include more than a dozen drugmakers."

Since 2016, generic-drug prices have declined slightly, but "I don't think that means the conspiracy has ended," Connecticut Attorney General William Tong told CBS's "60 Minutes." He added, "If they stopped colluding, you would expect prices to go down dramatically."

Tong said his investigators found "an industry-wide conspiracy" that answers the question, "Why are prescription drugs so expensive?" He said everyone in America is affected: "It affects health-insurance premiums . . . it impacts Medicare and Medicaid, and it is a chain reaction that drives up the price of American health care to unnatural heights."

The latest suit "accuses the generic drug industry, which mainly sells medicines that are off-patent and should be less expensive, of a long history of discreet agreements to ensure that companies that are supposedly competitors each get a 'fair share'," Reuters reports.

The suit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

In the other case, in Franklin Circuit Court, Beshear sued Eli Lilly & Co., Sanofi-Aventis Pharmaceuticals and Novo Nordisk, alleging that they "have increased the price of their analog insulin products at least 10 times, while the costs to make insulin have stayed low, usually less than $7 per vial," a news release from his office said. "The wholesale price has jumped to nearly $300 and the price paid by those Kentuckians hit hardest by the deception can exceed $1,000 a month."

The suit "alleges that Kentuckians without insurance or on high-deductible health plans, Medicare Part D recipients, and those who pay co-insurance are hurt most, as they are forced to pay the full amount or a percentage of the artificially inflated list price of the drug," the release says. "The companies who control the drug market, pharmacy benefit managers, pay a lower, negotiated price. As a result, Kentuckians pay too much for their insulin, while the PBMs profit by paying less. Through this deceptive strategy, drug makers curry favor with PBMs and are able to not only retain profits, but also increase their number of sales."

Beshear noted that Kentucky has the seventh highest rate of diabetes in the nation.

Drug prices keep rising, with no end in sight

By Trudy Lieberman
Rural Health News Service

Recently a tweet from Lauren Sausser, a fine health reporter I know in South Carolina, caught my eye. “Crazy drug prices became personal. My dad will start Keytruda regimen on Friday, $15,000 per infusion, once every three weeks indefinitely.” The high cost of pharmaceuticals had hit home!

Her 61-year-old father, Jim McCallister, who lives in Spartanburg, S.C., had been diagnosed with a melanoma discovered during a routine skin exam a few weeks earlier. It had spread to his lungs. Doctors recommended the drug, which uses the body’s immune system to attack cancer cells and has showed promise in treating aggressive melanomas.

McCallister’s employer-provided insurance is paying for most of his treatment, and the family is looking into Merck’s co-pay program. In the meantime, McCallister faces several thousand dollars of out-of-pocket costs.

McCallister may be lucky cost-wise. But the fact remains: Somebody is paying for the high cost of Keytruda and other new drugs coming on the market. Sausser said her dad asked if insurance would cover the drug. “The doctor told him they would find some way.”

That’s the nub of the dilemma. For many like McCallister, there may be help, often from the drug companies themselves in the form of patient assistance plans. Remember drug company AstraZeneca’s ads for some of its costly drugs: “AstraZeneca may be able to help”? Sometimes state or local government programs, private charities, nonprofit agencies, or coupon programs help patients pay for their drugs. Patients who can’t get help from any of those sources often go without.

None of the assistance programs, however, attack the underlying prices for the drugs, which pharmaceutical makers can set according to what the market will bear. They can pretty much do whatever they want with little push back from those who end up paying the bills – governments, insurers and patients. The U.S. has no cost controls, and government doesn’t negotiate drug prices the way many other countries do.

So the price of commonly prescribed drugs like the EpiPen, a shot that stops life-threatening allergic reactions, has risen to more than $600 for two pens. In 2009 two pens cost $100. The price for Abilify, an antipsychotic, has risen 113 percent between 2007 and 2014, and the cholesterol-lowering drug Crestor has climbed 103 percent over the same time period, according to The Campaign for Sustainable Rx Pricing, a group of employers, insurers, and unions that are trying to raise public awareness of high drug prices.

That helps explain why Medicare recently reported its spending on prescription drugs increased more than 17 percent in 2014 even though the number of claims from the program’s 38 million beneficiaries rose only 3 percent.

Medicare’s prescription drug law was never meant to pay all a person’s drug expenses. This year once a beneficiary and her drug plan have paid $3,310 for medicines, she reaches the coverage gap where she must pay the cost of most of her drugs. If she spends, out of her own pocket, another $4,850 for drugs this calendar year, she qualifies for catastrophic coverage and pays only 5 percent of all her remaining drugs for the year.

The trouble is that with prices so high, it’s easy to end up in the coverage gap paying out-of-pocket. Even protection offered by catastrophic coverage may not be enough. That’s especially true for people taking high-priced specialty drugs.

In 2013, about 3 million people were in this predicament. “Not a lot of people pay above the threshold, but those who do can pay through the nose,” says Tricia Neuman, senior vice president of the Kaiser Family Foundation.

Escalating drug prices affect everyone – even those not taking expensive drugs or not on Medicare. High drug prices affect all insurance premiums sooner or later.

Not long ago I spotted a letter to the editor in USA Today from Heather Block, age 53, who has Stage 4 breast cancer. She was calling for patients to organize and build a network to help craft solutions for the problem of skyrocketing drug prices.

I talked to Block about this. Her zeal and interest in organizing patients reminded me of the early days of the consumer movement in the 1960s when citizens organized to pass legislation to make the marketplace safer and more fair. With drugs, Block says, it’s hard to organize people because of drug assistance programs that take the sting out of prices and make patients less willing to work against the companies, the presence of disease advocacy groups funded by the pharmaceutical industry, and a general reluctance to speak up for fear of jeopardizing their own health and survival.

She’s asking for consumers to share their stories at this email: h3ath3rblock@gmail.com.

What problems are you having paying for prescription drugs? Write to Trudy at trudy.lieberman@gmail.com.