(LR) Joaquin Duato, CEO of Johnson & Johnson, Robert Davis, CEO of Merck, and Chris Boerner, CEO of Bristol Myers Squibb, testify before the Senate Health, Education, Labor and Pensions Committee in the Dirksen Senate Office Building in February from August 8, 2024 in Washington, DC The Committee held a hearing to examine the cost of prescription drugs. (Photo by Kevin Dietsch/Getty Images)
Kevin Dietsch | Getty Images News | Getty Images
The CEOs of Johnson & Johnson, Merck And Bristol Myers Squibb defended high drug prices in the U.S. at a Senate hearing Thursday as the White House and lawmakers on both sides work to curb high health care costs for Americans.
The push to lower drug prices is one of the rare hot-button issues that unites the two major political parties, although they often take different approaches to cutting costs. The Senate Health, Education, Labor and Pensions Committee hearing comes at a crucial time as the Biden administration begins a long-awaited process to negotiate Medicare drug prices directly with manufacturers – which is expected to provide relief to seniors’ wallets .
At the hearing, Merck CEO Robert Davis and Bristol Myers Squibb CEO Chris Boerner did not commit to lowering prices for certain drugs in the United States to bring them in line with prices in other high-income countries such as Canada and to adapt to Japan.
But they said they would welcome cheaper copycats to the market as the main patents on each of their top-selling drugs expire. Drug manufacturers are notorious for using different strategies to extend the exclusivity of lucrative drugs.
J&J CEO Joaquin Duato also pledged to lower the price of its immunosuppressant Stelara in 2025, when competing drugs are allowed to enter the market.
According to a federal survey, about 9 million American adults did not take their medications as prescribed in 2021 due to high drug costs. According to another federal report, prescription drug prices in the United States are more than 2.5 times higher than in other high-income countries.
The Senate panel said this was particularly true for some of the top drugs from the three drugmakers testifying Thursday. including Merck’s immunotherapy drug Keytruda, Bristol Myers Squibb’s blood thinner Eliquis and J&J’s Stelara. Eliquis and Stelara are both among the first 10 drugs targeted for Medicare pricing negotiations.
“The overwhelming beneficiary of these high drug prices is the pharmaceutical industry,” Sen. Bernie Sanders, chairman of the Senate Health Committee, said during the hearing.
Merck CEO Robert Davis testifies before the Senate Health, Education, Labor and Pensions Committee at the Dirksen Senate Office Building in Washington, DC on February 8, 2024.
Kevin Dietsch | Getty Images News | Getty Images
The three CEOs acknowledged the high cost of health care in the U.S. but said their prices reflect the value of their life-saving medicines to patients and the entire health care system. There are also high investments in research and development. They also claimed that drugs reach patients much more quickly in the U.S. than in other countries, and alleged that pharmacy benefit managers – middlemen who negotiate drug discounts on behalf of insurers and other payers – often pocket savings rather than pass them on pass on to patients.
“Patients are bearing the brunt of a complex U.S. system that sees rising healthcare costs and a lack of affordability. We need to make the system work better for them,” Boerner said, adding that drugmakers “have a role to play in addressing affordability.”
But he added that Bristol Myers Squibb supports policies that “reduce patient out-of-pocket costs without ultimately harming innovation.” Boerner did not point to specific guidelines.
Drug manufacturers want to protect innovations
Duato noted that J&J sets prices for its drugs to reflect its commitment to innovation and developing new medicines for patients, which requires a “massive” investment. J&J has spent nearly $78 billion on research and development since 2016, he said.
Merck, in turn, invested $46 billion in research and development between 2011 and 2023 and expects to spend another $18 billion in the 2030s, as Davis emphasized in his opening speech.
Boerner said Bristol Myers Squibb has invested more than $65 billion in research and development over the past decade.
Still, a report released Tuesday by the committee said J&J and Bristol Myers Squibb each spent $3.2 billion more on stock buybacks, dividends and executive compensation in 2022 than on research and development to find new drugs. However, Merck spent less on executive compensation than it did on research and development this year, the report said.
CEOs say drugs are reaching Americans faster
The senators highlighted the disparity between drug prices in the United States and other high-income countries. For example, Sanders said the current annual cost of Eliquis is $7,100 in the United States, but only $900 in Canada.
He called on Boerner to commit to lowering the price of Eliquis in the United States to the price of the drug in Canada.
Bristol Myers Squibb CEO Chris Boerner testifies before a Senate Health, Education, Labor and Pensions Committee hearing on high drug prices on Capitol Hill in Washington, U.S., February 8, 2024. REUTERS/Leah Millis
Leah Millis | Reuters
But Boerner said he couldn’t make that commitment, especially because the two countries “have different systems that set very different priorities.” He noted that medications are often harder to access in Canada and take significantly longer to reach patients in Canada than in the United States
Merck’s CEO responded similarly after Sanders asked him to commit to lowering Keytruda’s price in the U.S. to the price in Japan. The panel said the current annual cost of Keytruda is $191,000 in the United States, but significantly lower at $44,000 in Japan.
“I think it’s also important to point out that access [to drugs] in the United States is faster and more than anywhere in the world,” Davis said.
He added that there are far more approved treatment uses for Keytruda in the U.S., which is partly why the drug’s price is higher than in other countries.
Davis said there are 39 approved uses for Keytruda in the U.S. in 17 types of cancer. That number is around 20 in Europe and even lower in Japan, he added.
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2024-02-08 18:31:01
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