House Democrats are quickly intensifying oversight of the pharmaceutical industry, opening what may be one of the most significant investigations into prescription drug pricing in decades.
House Oversight Committee Chairman Elijah Cummings of Maryland sent letters to 12 drugmakers requesting detailed information and documentation on “price increases, investments in research and development, and corporate strategies to preserve market share and pricing power,” according to a statement.
“For years, drug companies have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs while recording windfall profits,” Cummings wrote. “The goals of this investigation are to determine why drug companies are increasing prices so dramatically, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices.”
The panel is focusing its initial efforts on medications that were the costliest for Medicare Part D, as well as those with the most significant price hikes during the past five years. Among the companies that received requests for information are AbbVie, Amgen, AstraZeneca, Pfizer, and Eli Lilly & Co.
The oversight committee is slated to hold its first hearing on the issue on Jan. 29.
January is a common time period for drugmakers to hike the cost of their products. This year, at least 60 companies raised the price on more than 300 treatments, according to data from Rx Savings Solutions reported by multiple news outlets.
AbbVie, for example, rose the price of Humira by 6.2 percent. Sanofi increased the cost of diabetes drug Lantus by 4.4 percent, while Novo Nordisk hiked the price of its diabetes treatment Victoza by 5.2 percent. All three companies received inquiries on the cost increases from the oversight panel.
And more hikes could be coming. “Some companies chose to go forward early, but by the end of January, we expect the majority to raise,” Bernstein Research analyst Ronny Gal wrote in a recent note.
President Trump earlier this month expressed outrage at the increases, tweeting that the companies “are not living up to their commitments on pricing.”
“Not being fair to the consumer, or to our Country!” he wrote in a post on the social media site.
The administration is expected to advance in 2019 several new regulations targeting the pharmaceutical industry. Among them is a controversial proposal to tie federal reimbursement for treatments in Medicare Part B to the international benchmark price. Critics have labeled the concept as socialist, given that several foreign governments effectively set the cost of prescription drugs offered in their respective countries.