Senate committee seeks answers on drug pricing
Follow the money. If only it were that simple when it comes to understanding how much prescription drugs cost—and why. The Senate Health, Education, Labor and Pensions Committee will take another journey down the rabbit hole on Oct. 17, this time focusing on the delivery system. The committee started its probe in June with a hearing aimed at getting a basic understanding of the issue.

Follow the money. If only it were that simple when it comes to understanding how much prescription drugs cost—and why.

The Senate Health, Education, Labor and Pensions Committee will take another journey down the rabbit hole on Oct. 17, this time focusing on the delivery system. The committee started its probe in June with a hearing aimed at getting a basic understanding of the issue.

"More than 4 billion prescriptions are written for drugs each year for Americans who then receive those drugs at 60,000 drug stores, from doctors or hospitals and from online pharmacies. The total cost to the overall health system of these prescriptions each year is $450 billion, to be paid by taxpayers, patients, hospitals and insurers, among others," committee Chairman Lamar Alexander (R-Tenn.) said during the June hearing. "This is a discussion that affects the well-being of every American family. It is important that we work together to conduct this fact-finding in a bipartisan way."

While the June hearing was billed as a bipartisan effort, several Democrats used it as an opportunity to blast the GOP's efforts to derail the Affordable Care Act.

At the Oct. 17 hearing the committee will listen to testimony from officials representing big pharma, generic drug manufacturers and pharmacists. One topic that's sure to come up is trying to understand where the money goes.

A study published in June in Health Affairs tried to trace exactly that. Looking at a hypothetical $100 prescription, researchers combed through Securities and Exchange Commission filings and other analyses and projected gross profit for branded drug manufacturers to total $58 and $18 for generic makers. The study also found that pharmacy benefit managers raked in four times as much on generic drugs versus brands.

The concern is that policymakers will rush to judge the entire industry though a single lens, rather than assessing each player differently, said Chester "Chip" Davis, CEO of the Association for Accessible Medicines, which represents generic drug manufacturers. Davis is slated to testify at Tuesday's hearing.