Drug companies brace for chairman Bernie

By: Peter Sullivan; Axios

Sen. Bernie Sanders has long made no secret that he thinks drug companies and health insurers are ripping off Americans. But now he’s chairman of the Senate health committee.

Why it matters: Sanders has signaled an early focus of the committee’s work will be drug prices, and manufacturers are bracing for some contentious hearings.

  • “I have no doubt there will be tough hearings with people from industry being forced to testify, subpoenaed to testify, etc.,” a pharmaceutical industry source said. “And I think that’s going to be a real challenge.”

What they’re saying: Sanders told Axios in a brief hallway interview last week that he does plan to have hearings in the Health, Education, Labor and Pensions (HELP) Committee on drug prices.

  • Asked specifically if that will include calling drug company executives to testify, Sanders said: “We’re working on a strategy right now that will be very aggressive.”
  • Sanders has already set the tone for his chairmanship with a Fox News op-ed saying “greedy pharma rips off Americans.” In a short video he posted on Twitter, Sanders previewed the committee’s agenda, including how it would “take on the greed of the pharmaceutical industry.”
  • Sanders allies say it is little secret that he wants to press pharmaceutical executives. “I think very near the first order of business for Bernie Sanders at HELP is calling these corporations to account,” said Alex Lawson, executive director of the progressive group Social Security Works.
  • Lawson said he expects Sanders to send letters to drug companies with questions before calling hearings.
  • “It doesn’t take reading tea leaves to think that Sanders will want to do that,” Louisiana Sen. Bill Cassidy, the top Republican on HELP, said of drug company hearings. “If he calls them in, I have questions,” he added.

Between the lines: The important upside for industry is that with a divided Congress, Sanders has basically no ability to get his most sweeping ideas signed into law at the moment. What he will have is the use of the bully pulpit and the public relations battle.

  • “We’re seeing companies intensify their proactive education and advocacy efforts, while also preparing to deal with fresh attacks from the senator,” said a consultant who works with pharmaceutical companies.
  • The consultant added that there is hope attention can shift to other players in the drug supply chain, starting with pharmacy benefit managers, or PBMs, who negotiate drug prices on behalf of health plans and have been the target of more finger-pointing over what patients actually pay at the pharmacy counter.
  • Lori Reilly, chief operating officer at the Pharmaceutical Research and Manufacturers of America, said they are “preparing for anything and everything” when asked about Sanders as chairman.
  • She said they had not heard directly from him about hearings, but “my assumption is he will be having hearings on that, and our companies have testified before and we’ve testified before, so I wouldn’t be surprised if that happens.”
  • PhRMA spokesman Brian Newell said in a statement that “we can’t ignore the real drivers of health care spending or middlemen who are shifting costs onto people at the pharmacy.”

Keep in mind: Democrats last year fulfilled a long-held goal by passing drug pricing provisions in the Inflation Reduction Act that for the first time gave Medicare the power to negotiate the prices of some drugs that have been on the market for several years but don’t have competition from generics.

While Sanders has put his early focus on drug companies, the Medicare for All proponent and two-time presidential candidate is certainly no fan of health insurers either. But one health insurance industry executive said they hope to work with him on drug pricing — and putting heat on manufacturers.

  • “Senator Sanders certainly has his point of view,” David Merritt, a senior vice president at the Blue Cross Blue Shield Association, told reporters last week. “I do think we can find some common ground on the need to reform the prescription drug industry.”

The bottom line: Sanders is getting ready for a fight.

  • “However scared they are, they’re not scared enough,” Lawson said of the health care industry. “Because that’s the energy that Bernie Sanders, from my opinion from speaking with HELP, is bringing to this.”