Brand Name Drug Giants Refuse to Rule Out Future Insulin Price Hikes
On Wednesday, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing with executives from Big Pharma giants Novo Nordisk, Eli Lilly and Sanofi, who control 99 percent of the insulin marketplace. The hearing was titled, “The Need to Make Insulin Affordable for All Americans.”
During the hearing, lawmakers, from both sides of the aisle, highlighted the importance of ensuring American patients can afford the medications they need and slammed brand name drug companies for egregious pricing practices, including their lead role in hiking the price of insulin products.
Here is what lawmakers had to say in opening statements and key exchanges during the hearing:
Senator Bernie Sanders (I-VT), Chairman, U.S. Senate Committee on HELP:
“We’re going to do everything we can to end the outrage in which the American people pay—by far—the highest prices in the world for virtually every brand name prescription drug on the market. Whether it is a drug for cancer, heart disease, asthma, or whatever illness, we end up paying the highest prices in the world. And we want to know why there are Americans who are dying or becoming much sicker than they should because they can’t afford the medicine they need.”
“In 2021, 10 major pharmaceutical companies in America made over $100 billion in profits… If Eli Lilly can lower the price of Humalog by 75 percent, why is it still charging the American people about $200,000 for Cyramza, a drug that treats stomach cancer. $200,000 but that same drug is sold in Germany for just $54,000. Why is that? If Novo Nordisk can lower the price of Novolog by 75 percent. Why is it still charging Americans with diabetes $12,000 for Ozempic, when the exact same drug can be purchased for just $2,000 in Canada. If Sanofi can reduce the price of Lantus by 78 percent, why is it still charging cancer patients in America over $200,000 for Caprelsa, a drug that can be purchased in Japan for just $37,000?”
“One out of four Americans can’t afford the medicine that their doctors prescribe. That is beyond comprehension and let’s be clear, the high cost not only impacts the health of individuals in America but the budget of the United States of America.”
Senator Bill Cassidy (R-LA), Ranking Member, U.S. Senate Committee on HELP:
“The ability to afford the insulin is equally important as to the innovation that may have occurred, because, obviously, if you cannot afford the innovation, it is as if the innovation has never occurred.”
Senator Tammy Baldwin (D-WI):
Senator Tammy Baldwin (D-WI): “Mr. Ricks, yes or no, did Eli Lilly conduct $1.5 billion in stock buybacks in the year 2022?”
David Ricks, Chair and Chief Executive Officer, Eli Lilly and Company: “I believe that’s approximately the number.”
Senator Tammy Baldwin (D-WI): “Mr. Jørgensen, yes or no, did Novo Nordisk conduct 24 billion in Danish Krone—worth roughly $3.6 billion of stock buybacks in 2022?”
Lars Fruergaard Jørgensen, President and Chief Executive Officer, Novo Nordisk: “I believe that’s approximately correct.”
Senator Tammy Baldwin (D-WI): “And Mr. Hudson, yes or no, did Sanofi conduct 497 million Euro of stock buybacks in 2022—roughly equivalent to $544 million.”
Paul Hudson, Chief Executive Officer, Sanofi: “That’s correct, Senator.”
Senator Mike Braun (R-IN):
“You’re breaking the bank. The thing you have to realize is that all the things that you say are attributes of our system shouldn’t cost us 50 percent more than what healthcare does across the world. In your case—since most people have a prescription as maybe their first entry into the healthcare system—you’re showing this where you’re charging minimally four times as much here, if not 10 times.”
Senator Ed Markey (D-MA):
“Eli Lilly has demonstrated that they can reduce their prices compared with their competitors… It’s the excess of profit taken from a corporate perspective that just leads to catastrophic pricing. And then the off-ramp is ‘well, we’ll just have to have the federal government pick up the tab.’ I think that’s something that this hearing is intended to finally put a spotlight on in terms of corporations reducing their pricing and maybe having a more reasonable discussion with the federal government with regard to what is the cost to the federal taxpayer.”
During one key exchange, Senator Sanders (I-VT) asked the Big Pharma CEOs to commit to not raising insulin prices any further — and all three refused or caveated their answers:
Senator Sanders (I-VT): “Mr. Ricks, since 1996 Eli Lilly increased the price of Humalog 34 times from $21 to $275—same exact product. I am told that it costs $5 to manufacture this product. And the story is not different for the products produced by Novo and Sanofi. So my question to you and to the other drug companies is, will you commit to this committee today that you will not increase the price of any insulin product again?”
David Ricks, Chair and Chief Executive Officer, Eli Lilly and Company: “Thank you, Chairman, for the question. As I mentioned in my comments, all we’ve done is reduce prices since I’ve been CEO so I’m comfortable saying we’ll leave our prices as they are for the insulins on the market today.”
Paul Hudson, Chief Executive Officer, Sanofi: “We’ve said before we have a responsible and sustainable pricing approach. We’ve had it since 2017. Net prices continue to fall and the net price for insulin today is lower than when it was launched in 2001.”
Lars Fruergaard Jørgensen, President and Chief Executive Officer, Novo Nordisk: “We are committed to limit—potentially—price increases to a single digit.”
Eli Lilly’s response leaves the brand name giant the space to just introduce a new brand, Sanofi flat out refused to commit to anything, and Novo Nordisk would be scot free to raise prices, just at less than 10 percent at a time.
Senator Sanders (I-VT) also asked the Big Pharma CEOs to commit to lowering the price of certain other high-priced drugs, during which the CEOs of Eli Lilly and Sanofi admitted that competition from more affordable alternatives effectively lower drug prices:
Senator Bernie Sanders (I-VT): “Mr. Ricks, Eli Lilly charges $196,000 in the United States for Cyramza, a stomach cancer drug. That same drug can be purchased in Germany for just $54,000. Will you commit to this committee to lower the price of Cyramza in the United States for the same price that you’re selling in Germany? 54,000? Yes, no?”
David Ricks, Chair and Chief Executive Officer, Eli Lilly and Company: “Respectfully, Senator, that product has been on the market for a while. We do expect biosimilar entry. That’s the primary mechanism in the U.S. where the price will fall when that occurs. I’m sure there’ll be competition in the price.”
Senator Bernie Sanders (I-VT): “So what you’re telling me is that the American people will have to pay four times more than Germans do for the same product that you manufacture? Okay. Mr. Hudson, Sanofi is a French company and France sells a thyroid cancer treatment, Caprelsa, for $30,000 a year. Sanofi sells the same drug in the United States for $203,000 a year. It’s nine times as much. Will you commit to lowering the price of Caprelsa in the United States to $30,000—the same price as it’s sold in France?”
Paul Hudson, Chief Executive Officer, Sanofi: “Over time, with the introduction of competition and other biosimilars, etc. you will see the price fall.”
Read more on Big Pharma’s role in increasing insulin prices HERE.
Read more on bipartisan, market-based solutions to hold Big Pharma accountable HERE.