But that is obscured at the pharmacy counter, where patients are paying higher and higher out-of-pocket costs because more often than not, payment is tied to the list price of the drug, not the net price after all rebates and other discounts have been taken into consideration.
This is a particular problem in Medicare Part D, said AbbVie Chairman and CEO Richard Gonzalez.
“Due to the structure of the Part D benefit design, patients are charged out-of-pocket costs on a medicine’s list price which does not reflect the market-based rebates that Medicare receives,” he testified.
Despite acknowledging that this is a problem, the executives gathered were hesitant to commit to simply lowering the list prices, or anything for that matter.
The closest the panel came to a commitment to lowering the list prices of their drugs was to do so if all rebates went away in both the public and private sector.
But beyond that, the pharma executives continued to assign responsibility for high out-of-pocket drug costs to other players in the health care system, adding that the only way to change the situation would be to have everyone come to the table simultaneously.
“I understand the dissatisfaction with our industry,” Mr. Frazier said. “I understand why patients are frustrated because they need these medicines and they can’t afford them. I would pledge to do everything that we could, but I would urge you to recognize that the system itself is complex and it is interdependent and no one company can unilaterally lower list prices without running into financial and operating disadvantages that make it impossible to do that. But if we all bring the parties together around the table with the goal of doing what’s best for the patient, I think we can some up with a system that works for all Americans.”
Ultimately, the panel suggested, legislation is going to be required to change the system.