Senators Request Information on Agreements between Pfizer, Drug Benefit Companies, and Insurance Companies Pertaining to Promotion of Heart-Disease Drug Lipitor

Washington, DC - Senate Finance Committee Chairman Max Baucus (D-Mont.), senior Finance Committee member Chuck Grassley (R-Iowa) and Special Committee on Aging Chairman Herb Kohl (D-Wisc.) sent letters today to Pfizer, three companies that manage pharmaceutical benefits and two insurance companies asking for information about agreements aimed at limiting the sale of Atorvastatin, the generic equivalent of Pfizer's drug Lipitor.  The letters were sent after a news report alleged Pfizer agreed to provide discounts to pharmaceutical benefit management companies (PBMs) and insurance companies if the PBMs and the insurers would block prescriptions for Lipitor's generic equivalent.  In letters sent to Pfizer, PBMs Medco, Express Scripts, and Catalyst RX and insurance companies Coventry Health Care and UnitedHealth, the Senators expressed concern these arrangements will hinder access to generic drugs today and in the future.

"We need to do all we can to preserve access to the generic drugs that so are critical to seniors and millions of Americans across the country.  Patients and their families depend on generic drugs and they can't afford to see these generics pushed out of the market," Baucus said. "By working with manufacturers to push brand-name drugs, drug benefit companies may be abusing Medicare to boost their profits and denying generic alternatives to patients - a practice that needs to end immediately.  We need to take a close look to ensure we're protecting both taxpayer dollars and access to the medicine patients need."

"In what's been reported, just about everyone wins except consumers and taxpayers.  That's cause for scrutiny, and these letters reflect a commitment to looking at how to prevent the system from being manipulated so that access to generic drugs is restricted and taxpayers are forced to unnecessarily pay brand-name drug prices." Grassley said.

"Consumers and taxpayers foot the bill when drug benefit companies and insurers manipulate the marketplace to prevent access to generic drugs for millions of Americans.  We hope that scrutiny into these business practices will restore fairness and open the gates to affordable prescription drug choices and tremendous cost savings," Kohl said.

The news report indicated Pfizer and PBMs Medco Health Solutions and Catalyst RX have entered into agreements aimed at undercutting Atorvastatin sales.  Letters sent from the PBMs to pharmacies show the agreements will prevent customers enrolled in certain prescription drug plans from receiving the generic alternative to Lipitor.  While these letters indicate that a plan member's co-pay for Lipitor would be discounted and equal to the cost of a less-expensive generic prescription, the Senators are concerned the PBMs and insurance companies may charge health plan sponsors, including employers and Medicare Part D, full price for brand-name Lipitor from December 1, 2011 through May 31, 2012, while pocketing the discount from Pfizer.  The senators asked for a detailed list of all of all agreements which block generics or favor brand-name drugs and for documents related to the Lipitor deal.

Spending on the Medicare Part D program providing drug coverage for seniors will total $65 billion in the current fiscal year.  In the next four years, brand-name drugs with approximately $100 billion in sales in the U.S. have patents that will expire.  Without the prospect of true competition, generic drug manufacturers will be hesitant to invest the time and resources required to bring low-cost generic drugs to the market.  This heightens the concern that these types of arrangements will become a trend, ultimately compromising access to generic drugs and increasing costs to Medicare.

The United States Senate Committee on Finance has jurisdiction over the Medicare and Medicaid programs.  More than 100 million Americans receive health care and have access to affordable prescription drugs under those programs.

Thursday, December 1, 2011

Senator Chuck Grassley issued the comment below regarding new findings from the Government Accountability Office about dramatically higher rates of psychotropic prescription drugs being given to foster children over other children in Medicaid.  The GAO is finishing work on a report requested by Senator Tom Carper of Delaware.  Senators Grassley, Collins, McCain and Scott Brown joined in requesting the report.  The GAO today testified about its findings during a hearing of a subcommittee of the Senate Committee on Homeland Security and Governmental Affairs.  A foster youth named Ke'onte Cook also testified about his personal experience in having to take several medications while moving from one foster home to another.

Senator Grassley's comment:

"Children in the foster system are about as vulnerable as children can be, so more should be known about the degree to which foster children are given psychotropic drugs and the rationale for doing so, especially given the dramatic findings of this report.  The federal government should provide, without delay, the recommended guidance to states for monitoring what's happening.  Prescribing patterns and adverse effects need to be tracked for the well-being and protection of these children.  An environment needs to be established where there's accountability for the degree to which these drugs are used in order to make sure it's not just for convenience and at the children's expense.  There's also a public interest in making certain Medicaid isn't being abused through over prescribing.  My oversight, combined with investigative reporting, has exposed a few doctors in Florida who prescribed higher numbers of psychotropic drugs than seem humanly possible.  That's the kind of pattern states and the federal government need to monitor and nip in the bud as problems develop.  Also, disclosure of drug company payments to doctors will help to identify doctors who might be inclined to prescribe certain drugs at high levels because of a strong relationship with the drug maker."

Background information:

Senator Grassley has worked to make improvements to the foster care system and to make it easier for children in foster care to be adopted into permanent, loving homes, including the landmark 2008 law.  The Fostering Connections to Success and Increasing Adoptions Act of 2008 requires states to strengthen oversight of medical treatment and ensure that foster children receive high-quality, coordinated services when their placements change.

In 2009, Senator Grassley and Senator Mary Landrieu founded a Foster Youth Caucus in the Senate to draw the attention of policy makers to the needs of older children in foster care and the importance of helping children in the foster care transition out of the system and to independence, without the support of family.

Separately, beginning in 2007, Senator Grassley made the case for requiring pharmaceutical and medical device makers to disclose payments they make to doctors.  The disparities he disclosed between payments that research doctors reported receiving and payments that were made by drug makers galvanized support for enactment last year of a reform legislation sponsored by Senator Grassley and Senator Herb Kohl which will require disclosure.  Under their Physician Payments Sunshine Act, drug, device and medical supply companies must file annual reports with Department of Health and Human Services delineating all payments over $10, and the information will be posted online in a searchable manner beginning on September 30, 2013, and then on March 31 each subsequent year.  Physician names, office addresses, and specialties will be posted along with the form and amount of payments.  Senator Grassley has said this reform will provide transparency and, in turn, greater accountability in medical research and practice.

Senator Grassley: "Someone in the Justice Department leaked a document to the press along with talking points in an attempt to smear one of the ATF whistleblowers who have testified before the House.  This document was supposed to be so sensitive that you refused to provide it to Congress, but then someone provided it to the press.  The name of the criminal suspect in the document was deleted. But the name of the ATF agent was not.  This looks like a clear and intentional violation of the Privacy Act as well as an attempt at whistleblower retaliation. In a private phone conversation with me, you already told me that someone has been held accountable for this.  But your staff refused to provide my staff with any details.  Who was held accountable and how?"

Attorney General Holder: "You know, it - it's - it - it almost pains me and please don't take this away from Senator Grassley - pains me that as you said we had a private conversation.  You sent me a handwritten note that I took very seriously.  You and I have worked together on a variety of things, I think I have a good relationship with you. You sent me a handwritten note that I looked at, took serious, referred that letter to OPR, the I.G., I'm not sure which of the two, and asked them to try to find out what happened.  I called you to try to indicate to you that I had taken that matter seriously, that action had been taken.  You know, in a different time in Washington, I'm not sure that what you just said necessarily would have been shared with everyone here, but, you know, so be it, it's a different time I suppose."

FACT

A week and a half before the November 8th oversight hearing with the Attorney General, Senator Grassley was informed that the Attorney General wanted to speak with him.  Their discussion was a follow-up to a handwritten letter which Senator Grassley had sent to Attorney General Holder on June 30, 2011, but had never released or discussed publicly.  The letter raised concerns about the leak of a sensitive document to the press regarding a whistleblower who had come forward with allegations of gunwalking.

In the Attorney General's call, he assured Senator Grassley that someone had been held accountable for the leak of the document.  However, Attorney General Holder would not identify who had been held accountable.  At that time, Senator Grassley informed Attorney General Holder that in order to refrain from raising the issue publicly, Senator Grassley's staff would need more detailed information on the issue from Justice Department staff, such as who had been held accountable and how.  After the phone call, Justice Department staff contacted Senator Grassley's staff, but refused to provide any further details.

 

The evening of the November 8^th hearing, attorneys for former U.S. Attorney Dennis Burke acknowledged that Mr. Burke had leaked the sensitive document to the press.  The Justice Department Inspector General confirmed that the office continues to investigate the leak, which means there are others who may be involved in drafting and distributing the talking points and document to the press.  In addition to the Inspector General investigation into the leak, the Justice Department has confirmed that its Office of Professional Responsibility is conducting a separate investigation of other leaks.  However, the department has refused to provide additional details.

Wednesday, Nov. 30, 2011

Sen. Chuck Grassley made the comment below about his request for documents from the Federal Communications Commission (FCC) about its dealings with the firm, LightSquared.

Grassley has been seeking information from the agency as part of his effort to understand why the agency has allowed the company to move forward with its plans for a terrestrial 4G network, despite serious concerns of interference with the GPS systems used widely in military, aviation and emergency response venues.  The agency has refused to provide the public with insight into its approval process.

Months ago and subsequently, Grassley asked the FCC to provide documents regarding its interactions with LightSquared and LightSquared's parent company, Harbinger Capital Partners.  The FCC has refused to comply with Grassley's request.

Earlier this month, Grassley announced that he would place a hold on Senate action on two FCC nominees when the nominations are placed on the calendar for floor consideration until the FCC provides information, saying the public's business ought to be public.

In October, Senator Grassley wrote separate letters to the top investor in and the chief executive of the company, seeking related information.

The Commerce Committee today is holding a hearing on the FCC nominees.

Grassley comment:

"There's nothing new on whether the FCC will provide the information I requested.  The FCC hasn't made any move to provide the information.  As a result, my intention to place a hold on the FCC nominees, should they reach the floor, stands.  The FCC needs to make itself accountable to Congress and the American people.  An agency with control over a major piece of the economy can't be allowed to operate as a closed shop."