Pharmaceutical company AbbVie inflated prices for two major drugs, House Oversight report says
WASHINGTON — Pharmaceutical company AbbVie significantly inflated prices over the past two decades for patients in the U.S. who take the drugs Humira and Imbruvica, a report released Tuesday by the House Oversight and Reform Committee found.
The committee concluded that the price increases led to billions of dollars in corporate revenue and hefty bonuses for company executives.
“AbbVie pursued a variety of tactics to increase drug sales while raising prices for Americans, including exploiting the patent system to extend its market monopoly, abusing orphan drug protections to further block competition, and engaging in anticompetitive pricing practices,” the 43-page report states.
The report comes after the panel reviewed more than 170,000 of internal data, documents and communications related to the medications over the last 18 years. Chairwoman Carolyn Maloney, D-N.Y., issued a subpoena for the documents last year because the company refused to cooperate with a previous request for the materials.
A representative for AbbVie did not respond to a request for comment.
In testimony before the committee on Tuesday, AbbVie CEO Richard Gonzalez said the company provides financial assistance for customers who have issues paying for their medicine, spends billions of dollars on research and development, and blamed the structure of Medicare's Part D program for the high costs for some patients.
“The program's design has put a significant cost burden on them. For these patients, reducing drug prices alone will not alleviate the challenge of access and affordability,” he said.
Rep. Carolyn Maloney, D-N.Y., pressed Gonzalez on why the company was raising prices for some drugs in the United States while lowering the price for them overseas. "The system you described is how it does work," Gonzalez said.
Humira, a drug used to treat rheumatoid arthritis, other autoimmune diseases and gastrointestinal conditions such as Crohn’s, was released in 2003 when the company was Abbott Laboratories. AbbVie has since raised the cost 27 times and by more than 470 percent, with an annual supply now costing about $77,000, the report said.
Meanwhile, AbbVie, in conjunction with Janssen Biotech, has increased the price of Imbruvica, a drug used to treat mantle cell lymphoma and other cancers, by 82 percent since it launched in 2013. That year, for a patient taking three pills per day, the drug was priced at $99,776 annually. Today, it’s priced at $181,529. For patients taking four pills each day, it costs $242,039.
AbbVie separated from Abbott in 2013, and has since received more than $100 billion in net revenue from both drugs, which the report said was “driven in large part by AbbVie executives’ decision to repeatedly raise the prices of Humira and Imbruvica.” During that time period, the company’s top executives also received more than $480 million in compensation “much of which was directly linked to revenue increases,” the report said.
The committee also noted that Medicare is banned from negotiating with drug companies to lower prices and if Medicare received the same discounts for the medications as the Department of Defense and Department of Veterans Affairs, taxpayers would have saved several billion dollars.
The list price for Humira in countries outside of the U.S. is much lower. The committee found that in 2015, the cost for a 40-milligram syringe of the drug was $1,727 in the U.S. while price range was between about $400 and $970 in Canada, the United Kingdom, Germany, Japan and South Korea.
In addition to increasing the cost of the drug in the U.S., the Oversight Committee found that AbbVie “engaged in a series of anticompetitive strategies to block lower-priced biosimilar versions of Humira from entering the U.S. market.” The report noted that the drug Enbrel is Humira’s largest competitor, produced by Amgen, which increased its prices by “nearly identical amounts.”
Democrats and Republicans in Congress recently introduced separate pieces of legislation that aims to lower drug prices for patients. Even if the Democratic measure passes the House, it has less of a chance in the Senate where it would require Democrats to overcome a 60-vote hurdle to advance to a final vote.