Rebates or Patent Abuse? Eli Lilly, Novo Nordisk, and Sanofi CEOs Cross Swords with PBMs in Senate Hearing

CEOs of Eli Lilly And Company LLY, Novo Nordisk A/S NVO, Sanofi SA SNY, and PBM executives from Cigna Group's CI Express Scripts, and UnitedHealth Group Inc's UNH Optum RX testified at a U.S. Senate committee hearing on making it more affordable.

Eli Lilly, Novo Nordisk, and Sanofi control 90% of the U.S. insulin market, and Express Scripts and Optum RX control 80% of the prescription drug market.

Related: Three Is Company - Sanofi Follows Lilly, Novo Nordisk, Slashes Insulin Product Price By 78%.

"Why, in the richest country on Earth, do 1.3 million Americans ration insulin because of the cost? Why are 1 out of 4 Americans not able to afford the prescription drugs their doctors prescribe?" asked Senator Bernie Sanders, chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee.

The drugmaker CEOs said, in the Reuters report, that the companies pay rebates to lower costs but that PBMs and insurers are incentivized to choose drugs with higher prices because they lead to larger rebates.

"Higher list prices allow for higher fees and rebates, which can increase patients out of pocket costs while benefiting employers, insurance companies and people who don't use medicines," Eli Lilly CEO David Ricks said.

PBM executives said manufacturers alone set the drug prices and abuse patent protections to stifle competition. Drug costs would be even higher without the rebates that PBMs negotiate for their customers, Optum Rx CEO Heather Cianfrocco said.

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