Democrats on the House Oversight Committee pressed executives from Amgen, Novartis and Mallinckrodt to explain price hikes on their drugs in a series of hearings Oct. 1 following the committee's 18-month investigation into the drug industry's pricing practices, STAT reported.
The Oct. 1 hearings largely focused on pharmacy benefit managers after the House panel's investigation found both Novartis and Teva Pharmaceuticals contracted with insurers and their affiliated PBMs to block cheaper generic drugs from competing in the market. Teva testified Sept. 30, along with Celgene and Bristol Myers Squibb.
Internal documents from Novartis showed that executives openly discussed certain PBM and insurance plans' willingness to help organize a strategy to block generics from entering the market, STAT reported. The executives also allegedly discussed how to work around states that had passed laws banning this practice.
The investigation found that Teva engaged in what's called a "house brand" strategy, where PBMs would block generics from being put on insurance formularies or pharmacies would give patients branded drugs even when a generic was prescribed.
Amgen blocked competition for Enbrel, its blockbuster arthritis drug, by waging patent battles with biosimilar companies, STAT reported. It also engaged in "shadow pricing" for Enbrel, meaning it waited to see how much competitor AbbVie raised the price of Humira, a similar drug, before raising the price of Enbrel.
Amgen CEO Robert Bradway said PBMs were to blame for the price hikes.
"I know this sounds strange, companies in virtually every other industry compete by offering the lowest price, unfortunately the current rebate system in the U.S., created with good intent, now often leads to a situation in which not getting kicked off formulary requires matching a competitor’s higher price," Mr. Bradway said, according to STAT.
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