Kenneth Frazier, CEO of pharma large Merck, is about to face senators Tuesday who say drug prices are “sky-high” and “out of control.”
But Frazier doesn’t want new speaking factors. Sixty years in the past, a distinct panel of senators grilled a distinct Merck boss about the identical downside.
To a putting diploma, the topics prone to floor Tuesday — excessive drug costs and income, restricted value transparency, aggressive advertising and marketing, alleged patent abuse and mediocre, “me-too” medication — are similar to the problems senators investigated a long time in the past, historic transcripts present.
Frazier is scheduled to testify earlier than the Senate Finance Committee, led by Iowa Republican Chuck Grassley, together with the CEOs of AbbVie, AstraZeneca, Bristol-Myers Squibb, Pfizer and Sanofi, and a prime government for Johnson & Johnson.
Hearings led by Sen. Estes Kefauver in 1959 and 1960 had been the primary vital congressional inquiry into rising drug prices and drug-company income. While that showdown led to new authorized requirements for drug security and effectiveness, cost-control measures by no means made it to the ultimate invoice.
Health coverage students say the same hearings present simply how a lot unfinished enterprise stays and the way nicely pharma corporations have protected income and restricted regulation through the years.
“Every decade since the Kefauver hearings has seen at least one set of congressional hearings into the increasing prices of prescription drugs,” mentioned Dr. Jeremy Greene, a drug-industry historian at Johns Hopkins University.
“Drug prices, especially at the high end, are only ever higher” for the reason that 1960s, mentioned Dr. Scott Podolsky, a well being care historian at Harvard Medical School. “The issues of transparency and profitability certainly have been there from the very first day of Kefauver.”
A Tennessee Democrat recognized for investigating the Mafia, Kefauver launched a sequence of hearings on enterprise within the late 1950s. His Senate antitrust subcommittee started taking testimony on excessive pharmaceutical costs in late 1959.
“While this country has the best drugs in the world, it would appear from the great number of letters which the subcommittee has received that many of our citizens are experiencing difficulty in being able to purchase them,” Kefauver mentioned in opening remarks.
The periods, which lasted on and off till September 1960, had been “among the most sensational” hearings of that Congress, a syndicated columnist wrote on the time. Appearing had been the bosses of Merck, Pfizer, Schering, Bristol-Myers, Upjohn, Smith Kline and American Home Products. Senators dug into the costs of antibiotics, corticosteroids and tranquilizers, the marvel medication of the time.
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John Connor, then Merck’s president, mentioned he had “deep sympathy” for folks unable to afford drugs. So did Schering’s boss, however he mentioned it wasn’t the ’s fault.
“Undoubtedly some people find it difficult to pay for needed medication. They will also have difficulty in meeting their rent and food bills,” mentioned Francis Brown, Schering’s president on the time. “It is a matter of inadequate income rather than excessive prices.”
The executives urged Congress to create authorities applications to assist folks pay for well being care, which it did a couple of years later. Today Medicare, Medicaid and subsidies for personal well being protection price taxpayers greater than $1 trillion yearly.
But medication are nonetheless unaffordable for a lot of. A fourth of Americans in a recent survey by the Kaiser Family Foundation mentioned any individual of their household skipped doses or left prescriptions unfilled as a result of drugs prices an excessive amount of. (Kaiser Health News is an editorially unbiased program of the inspiration.)
Sixty years in the past, as now, policymakers questioned why Americans pay a lot extra for drugs than folks elsewhere.
“I still don’t understand why druggists in London buy this drug for $7.53 and our drugstores have to pay $17.90,” Kefauver instructed Connor, the Merck government.
“We meet different market conditions in different countries,” was Connor’s response. Americans had been getting “a reasonable bargain,” he mentioned. “Merck’s Head Defends Drug Prices” was the front-page headline the following day in The New York Times.
Senators accused corporations of marking up the price of medication by 1000’s of %. Then as now, executives defended excessive income as essential to finance analysis and growth, regardless that they typically spent extra on adverts and advertising and marketing than R&D.
“They were advised that whenever the senators mentioned high prices, just mention research and how difficult it is, how expensive it is,” mentioned Donald Light, a well being coverage professor at Rowan University in New Jersey. “Since 1959, that is the repeated and successful theme of Big Pharma.”
“The few successful products have to pay for the hundreds of research failures,” Alvin Brush, president of American Home Products, instructed Kefauver’s committee.
Like these of at the moment, sufferers of 1960 had been baffled about what drugs price till they obtained the invoice. Such obscurity led to overpayment.
“The consumer, in this field, cannot exercise his normal, economic prerogative of shopping or pricing before a purchase,” the top of a generic-drug producer instructed the committee. “The normal laws of supply and demand have no application here.”
Drug corporations engaged in a “pharmaceutical numbers racket” by selling completely different strengths of established medication as new drugs and charging extra, Louis Lasagna, a pharmacology professor from Johns Hopkins University, instructed the committee.
“Now this is like saying that a dime is more potent than two nickels because you can use one coin instead of two,” he mentioned.
While this nation has the very best medication on the planet, it will seem from the nice variety of letters which the subcommittee has obtained that lots of our residents are experiencing issue in having the ability to buy them.
Sen. Estes Kefauver
Companies typically labored to not develop breakthrough drugs however to take an current product and “modify the original drug just enough to get a patentable alternative,” mentioned Dr. Frederick Meyers, a pharmacology professor at what later grew to become the University of California-San Francisco.
In distinction to the nonstop client TV commercials of at the moment, adverts for prescription medicines in 1960 had been aimed toward docs and hospitals, showing in medical journals. Even these had been deemed aggressive. A committee staffer dumped out an enormous pile of samples, adverts and flyers that a Minnesota physician mentioned he had obtained in just one month.
Maybe if the businesses spent much less on adverts, armies of salesmen and “expensive stock options” for executives, Kefauver prompt, “you could lower the price of drugs, too.”
Senators proposed sweeping options.
Kefauver’s draft invoice would have withheld patents for modified medication except the brand new molecule gave a therapeutic response “significantly greater” than the unique. It would have promoted competitors by permitting anyone to license and promote a patented drug, in return for royalties paid to the patent holder, after three years.
One professional urged the federal government to publish an official record of patented medication and their generic equivalents together with costs so everyone may see what they price.
None of this occurred. The fought again. Any laws appeared doomed till the tragedy of thalidomide, a capsule taken for morning illness that produced deformities in infants, prompted lawmakers to behave.
But the Kefauver Harris Amendment of 1962, which set necessities for medical trials and laid floor for the trendy drug-approval course of, did little to manage price.
There was no have to restrict drug costs, Austin Smith, president of the Pharmaceutical Manufacturers Association, instructed the Kefauver committee. Attempts to show extreme pharma income had been “doomed to failure,” he mentioned. Drug costs had been rising extra slowly than client costs usually, Smith mentioned.
Smith’s counterpart at the moment is Stephen Ubl, who runs what’s now often called the Pharmaceutical Research and Manufacturers of America. He takes the same line, one that’s prone to be repeated on Tuesday. “Drug prices are rapidly decelerating,” Ubl tweeted final month.
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