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Pressed by Sanders, Big Pharma CEOs Refuse to Commit to Lower Drug Prices
"We are aware of the many important, lifesaving drugs that your companies have produced," said Sen. Bernie Sanders. "But I think as all of you know, those drugs mean nothing to anybody who cannot afford it."
Feb 08, 2024
The CEOs of major pharmaceutical companies refused Thursday to commit to lowering the prices of some of their top-selling drugs when pressed by Sen. Bernie Sanders, who noted that the same medicines are available in other countries for a fraction of the cost that Americans pay.
"We are aware of the many important, lifesaving drugs that your companies have produced. And that's extraordinarily important," Sanders (I-Vt.) said in his opening remarks during a Senate Health, Education, Labor, and Pensions Committee hearing. "But I think as all of you know, those drugs mean nothing to anybody who cannot afford it. And that's what we're dealing with today."
Sanders asked the chief executives of Merck and Bristol Myers Squibb whether they would pledge to reduce the sky-high U.S. list prices of their cancer and blood clot medications to levels that patients pay for those drugs in Japan and Canada.
Neither agreed to make the commitment, even after they acknowledged that they still make a profit in those countries despite selling their products at much lower prices than in the U.S.
When Bristol Myers Squibb CEO Chris Boerner claimed that medicines are cheaper in Canada because they are "generally made less available" and more difficult for patients to obtain, Sanders—who has famously traveled across the U.S.-Canada border with patients seeking affordable medications—countered that "life expectancy in Canada is six years longer than it is in the United States."
Three CEOs in total—Boerner of Bristol Myers Squibb, Robert Davis of Merck, and Joaquin Duato of Johnson & Johnson—testified at Thursday's hearing, which was titled, "Why Does the United States Pay, by Far, the Highest Prices in the World for Prescription Drugs?"
Boerner voluntarily agreed to testify in early January, but Davis and Duato only agreed to appear before the Senate HELP Committee after Sanders threatened subpoenas. The committee votes to approve the subpoenas were canceled after Davis and Duato dropped their opposition to testifying.
All three of the companies represented at Thursday's hearing are currently suing the Biden administration in an effort to kill the Medicare price negotiation program established under the Inflation Reduction Act.
Before questioning the executives, Sanders noted that a growing number of patients in the U.S. have been forced to resort to the crowdfunding platform GoFundMe to help pay for their medications. GoFundMe's website notes that "thousands of individuals in need use GoFundMe each month to raise funds for lifesaving prescription drugs."
Sanders asked Davis, who made $52 million in total compensation in 2022, whether he would "commit to not accepting a single dollar more in compensation until there is not a single GoFundMe page for Keytruda," a Merck cancer drug that carries a list price of $191,000 a year in the U.S.
Davis said Merck is "very much sensitive to what's happening with patients" but would not make the commitment.
Davis told Sanders that he has never searched GoFundMe for campaigns launched by cancer patients struggling to afford Keytruda. Sanders noted in response that his staff found over 500 stories of people trying to raise funds for the cancer medication, which brought in $6.61 billion in sales worldwide for Merck last year.
"One of those stories is a woman named Rebecca, a school lunch lady from Nebraska with two kids who died of cancer after setting up a GoFundMe page because she could not afford to pay for Keytruda," Sanders said. "Rebecca had raised $4,000 on her GoFundMe page, but said the cost of Keytruda and her cancer treatment was $25,000 for an infusion every three weeks."
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'Stakes Are Huge': Medicare Makes Opening Bids in Price Negotiations With Big Pharma
"For the first time, Medicare isn't just accepting whatever prices the drug corporations set for expensive and widely used drugs," said one campaigner.
Feb 01, 2024
The Biden administration announced Thursday that it made its opening bids as part of Medicare's historic drug price negotiation program, which major pharmaceutical companies are working hard to kill in court.
The initial offers, which were not made public, were sent to the manufacturers of the 10 drugs that the Biden administration selected for the initial round of price negotiations. Additional medicines will be subject to price negotiations in later years.
The companies—including Merck, Johnson & Johnson, Pfizer, and Amgen—have 30 days to either accept Medicare's proposed maximum fair price for the selected medicines or put forth a counteroffer. Over the coming spring and summer, Biden administration officials will hold negotiation meetings with drug company representatives to resolve price disputes if the government doesn't accept the drugmakers' counters.
In September, the Centers for Medicare and Medicaid Services (CMS) will publish the negotiated prices, which won't take effect until 2026.
Margarida Jorge, the head of Lower Drug Prices Now, said in a statement Thursday that "for the first time, Medicare isn't just accepting whatever prices the drug corporations set for expensive and widely used drugs in Part D like Xarelto and Eliquis—instead, the agency, newly empowered under the new Medicare negotiations law, will propose lower prices for 10 of the most expensive drugs in Medicare Part D to kick off the negotiations process."
Jorge noted that around 9 million seniors on Medicare "spent an estimated $3.4 billion out-of-pocket on these ten drugs in 2022 to treat blood clots, cancer, diabetes, arthritis and other common conditions."
"Big Pharma made record profits by using their monopoly power to set prices and keep them high, forcing many Medicare patients to forgo other necessities, incur debt, or go without medicine because the prescriptions were not affordable," Jorge added. "Now, despite a barrage of lawsuits, paid ads, and threatening prognostications from the drug corporations, Medicare is on track to implement the new reforms that will lower prices, make costs affordable, and save taxpayers billions over the next decade."
"We are moving ahead to help people in spite of pharma's efforts to block negotiation in the courts."
The list prices of the drugs chosen for the initial round of negotiations range from around $7,000 a year in the case of Johnson & Johnson's Xarelto to over $133,000 annually for AbbVie and Johnson & Johnson's Imbruvica.
Lawrence Gostin, faculty director of the O'Neill Institute for National and Global Health Law at Georgetown University, said he expects the price negotiations to be "tense and hostile" given that the "stakes are huge for industry and the administration."
"It'll end up at SCOTUS and become a central issue in the 2024 presidential election," Gostin predicted.
A majority of the initial 10 drugs are made by companies that are currently suing the Biden administration in an effort to strike down the price negotiation program, which represents a serious challenge to the industry's ability to drive up prices at will.
According to government data, the selected drugs accounted for roughly 20% of total Medicare Part D spending between June 1, 2022 and May 31 of last year.
An analysis released earlier this month by the Commonwealth Fund found that list prices for the 10 drugs are three times higher on average in the U.S. than in other rich countries.
David Mitchell, founder of Patients for Affordable Drugs, said Thursday that the Biden administration's opening offers mark a "big step forward to lower drug prices."
"We are moving ahead to help people in spite of pharma's efforts to block negotiation in the courts," Mitchell added. "A good day for America."
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Senate Panel to Vote on Subpoenas for CEOs of 'Pharma Profiteers'
"The pharmaceutical companies they run may make billions in profits," says HELP Committee Chair Bernie Sanders. "But that does not give them a right to evade congressional oversight."
Jan 18, 2024
U.S. Sen. Bernie Sanders announced Thursday that the Senate Committee on Health, Education, Labor, and Pensions—which he chairs—will vote later this month on subpoenas to force two pharmaceutical CEOs to explain "why their companies charge substantially higher prices for medicine in the U.S. compared to other countries."
Last November, Sanders and HELP Committee Democrats asked the CEOs of Johnson & Johnson, Merck, and Bristol Myers Squibb to testify at a hearing on drug prices. Bristol Myers Squibb CEO Chris Boerner agreed to testify. The January 31 vote will decide whether to compel Johnson & Johnson CEO Joaquin Duato and Merck CEO Robert Davis to do so.
"It is absolutely unacceptable that the CEOs of Johnson & Johnson and Merck have refused an invitation by a majority of members on the HELP Committee to appear before Congress about the outrageously high price of prescription drugs," Sanders—who has previously grilled Big Pharma executives about their price gouging—said in a statement.
"It is time to hold these pharmaceutical companies accountable for charging the American people the highest prices in the world for the medicine they need."
"These CEOs may make tens of millions of dollars in compensation. The pharmaceutical companies they run may make billions in profits. But that does not give them a right to evade congressional oversight," the senator continued. "It is time to hold these pharmaceutical companies accountable for charging the American people the highest prices in the world for the medicine they need."
"As the HELP Committee considers legislation to lower prescription drug prices, it is critical that these CEOs explain how they determine the price of medicine in the United States," Sanders added.
An affirmative vote would be the committee's first approval of subpoenas since 1981. Consumer advocates welcomed the prospect of such action.
"Time's up for the prescription drug price gougers," Public Citizen president Robert Weissman said in a statement. "For too long, Big Pharma executives have behaved as if they are immune from accountability. They take publicly funded research; skyrocket prices to the moon, forcing patients to ration or skip medications they need; and then laugh as the very government that paid for the original research accepts without negotiation their outrageous prices, paying multiples of what other countries pay."
Weissman continued:
Merck charges 30 times more for a diabetes drug in the United States than it does in France. Johnson & Johnson charges almost five times more for a blood cancer drug in the United States than it does in Germany.
Meanwhile, Johnson & Johnson is paying out more in stock buybacks, dividends, and executive compensation than they are spending on research and development, even though R&D is the only claimed rationale for high prices.
"The pharma profiteers know exactly what they are doing," Weissman asserted. "They know how they are forcing rationing. They know they are ripping off the government and taxpayers. And they know they are getting rich."
"What's different now is that they can no longer escape public accountability," he added. "The hearings at which they will be forced to testify are another key marker in the process of rationalizing prescription drug pricing policy in the United States."
That process, Weissman said, includes the federal government negotiating drug prices thanks to a provision in the Inflation Reduction Act signed into law by U.S. President Joe Biden in 2022. Last August, the Biden administration announced the first 10 drugs subject to price negotiations. The makers of those drugs—and Republican U.S. lawmakers—have challenged the policy.
However, as Weissman put it on Thursday: "It's a new day, Big Pharma. Get used to it."
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