July 02, 2018

Drug Prices Remain High Despite Trump Administration's Promises of "Voluntary, Massive Drops" in Prices

Senators Warren and Smith Continue Investigation; Question Pharmacy Benefit Managers and Distributors about Allegations Made by Secretary Azar during Senate Hearings

Text of letters (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) are continuing their investigation of President Trump's promised drug price reductions after these reductions fail to materialize. The senators sent letters to nine Pharmacy Benefit Managers (PBMs) and drug distributors asking them to respond to Health and Human Services (HHS) Secretary Alexander Azar's allegations that they are setting up roadblocks that are preventing drug companies from voluntarily lowering their drug prices. This latest effort follows similar letters previously sent to Secretary Azar and to drug manufacturers.

"These are extremely disturbing allegations by Secretary Azar," wrote Senators Warren and Smith. "If they are true, these allegations suggest that PBMs and drug distributors are acting to maintain high list prices in order to maintain high profit margins, potentially raising antitrust concerns."

The senators continued: "If Secretary Azar's allegations are untrue, he owes the HELP Committee and Finance Committee an explanation for why he publicly and repeatedly raised them in his testimony."

President Trump promised in May 2018 that "We're going to have some of the big drug companies in two weeks and they're going to announce ... voluntary massive drops in prices." When asked about this statement by Senator Warren during a Senate Health, Education, Labor, and Pensions (HELP) Committee hearing, Secretary Azar indicated that multiple drug companies were considering lowering their prices but were running into opposition from PBMs and drug distributors. He repeated the same allegation during a Senate Finance hearing. 

The senators' letter noted numerous public statements PBMs have made about their interest in lowering drug list prices.  The senators asked the PBMs and distributors if they were engaged in conversations with drug companies about reducing prices, if they had received any commitments of lower list prices from drug manufacturers, if they "pushed back" against these offers, and how they would react to offers by drug companies to lower list prices.