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For Immediate Release
December 1, 2011

Baucus, Grassley, Kohl Examine Pharmaceutical Deals That Limit Access To Generic Drugs

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.