Pharma CEOs grilled by senators over sky-high drug prices
S E E D E D C O N T E N T
WASHINGTON — Lawmakers sharply criticized the CEOs of three major drugmakers during a Senate committee hearing on Thursday, saying the exorbitant cost of prescription drugs in the U.S. means many Americans are unable to afford the medications they need to live.
Prescription drug prices in the U.S. are notoriously higher than other countries, a stark discrepancy that Health, Education, Labor and Pensions Committee Chair Sen. Bernie Sanders, I-Vt., called out.
The high prices mean people go without the medications, Sanders said.
"How many die as a result of that, how many suffer unnecessarily," he asked. "Nobody knows. But my guess is in the millions."
Senators heard testimony from Johnson & Johnson's Joaquin Duato, Merck's Robert Davis and Bristol Myers Squibb's Chris Boerner. J&J and Merck's executives only agreed to testify after Sanders threatened to subpoena
The hearing came shortly after the Biden administration kicked off drug price negotiations for the 10 costliest medications for Medicare recipients.
All three drugmakers have filed lawsuits against the federal government to stop the negotiations, which are a provision in the Inflation Reduction Act.
Five of the 10 drugs up for negotiations — blood thinners Eliquis and Xarelto, diabetes drug Januvia, blood cancer drug Imbruvica and arthritis drug Stelara — are made by one of the three companies.
The yawning gap between the prices the three drugmakers charge in the U.S. versus other countries for the same drug was the reason three executives were called to testify, Sanders said.
According to Sanders:
- Bristol Myers Squibb charges an annual list price of about $7,100 for Eliquis in the U.S., compared to around $900 in Canada and about $650 in France.
- J&J's Stelara is $79,000 in the U.S., but $16,000 in the United Kingdom.
- Merck's Januvia is around $6,000 in the U.S. but $900 in Canada and $200 in France.
The CEOs defended the costs, saying those high prices are based on the "value" the medications give patients.
They also noted that the higher prices mean U.S. patients often get access to the medications years before people in other countries.
"This is in stark contrast to many systems outside the United States, which while they may deliver lower prices, carry an often overlooked trade off that patients often wait longer for new medicines," Boerner, of Bristol Myers Squibb, said.
The executives also said that if the U.S. cuts the prices of their medications, they will be unable to invest in developing new medicines.
"Future treatment breakthroughs hinge on what we do now," Davis said.
Sanders countered that the companies spend more on executive compensation, stock buybacks and dividend payments to investors than on research and development.
The ranking member of the committee, Sen. Bill Cassidy, R-La., agreed with Sanders that drug prices are unreasonably high in the U.S. However, he also worried that aggressive policies that cut the price of drugs might discourage drugmakers from making investments in new medicines.
"Now we want to create incentive, but we want to be able to provide access; without access it's as if the drug has never been invented," he said.
The CEOs said that they supported lower out-of-pocket costs for consumers and pointed the finger at insurance companies and middlemen known as pharmacy benefit managers, which negotiate rebates with drug companies on behalf of insurance plans.
Sen. Maggie Hassan, D-N.H., was skeptical that the executives supported lowering drug costs, asking them why they were "actively trying to prevent generics from the market."
Bristol Myers Squibb's Eliquis, for example, was originally set to allow generic competition in 2019, but the drugmaker filed new patents that extended the drug's exclusivity for several more years.
Boerner addressed that, telling Hassan, "We have allowed generic entry in 2028."
"So we have two generics ready to go," Hassan responded. "Your original patent also past expired, but you still are actively trying to prevent generics from coming to market."
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The only way the US is going to control health care costs is to either ban for profit companies OR to institute price controls. I'm not sure either would be legal. They may be able to do something like Medicare-For-All to institute price controls... maybe... but I'm not sure that would ever pass congress. As long as enough Americans are happy with higher health care costs for smaller payoffs we'll continue with this madness.
The US cannot just move to a Medicare-for-all system, the Covid pandemic showed why that is not feasible. During that pandemic, hospitals stopped elective surgeries and care to focus on the Covid issue. Many hospitals ended up closing floors and laying off nurses as Medicare does not return a high enough dollar amount for them to stay open. Many rural hospitals ended up closing their doors for good.
People want to use other countries which have a medicare-for-all setup already such as England as an example. Problem is that these countries have set up their national healthcare systems from the ground up and these doctors/nurses are government employees and the hospitals are owned by the government. If you want to set up a system like that today, you will need to build up that system while the current system is also running, until the new system is large enough that the old system can finally be shut down. I don't think anyone is willing to take on the cost of that.
So... You can blame 'medicare-for-all' for all that stuff that happened when we had no medicare-for-all? Sounds reasonable.
No, that's not what I said. What I said is just moving to a medicare-for-all system will not work in this country. If you want it to work, you must build up the new medical system from the ground up before you can shut down the old system. The Covid pandemic showed us how Medicare/Medicaid works in this country when it's the only system paying the healthcare system, nurses were laid off and several hospitals shut down because they were not bringing in enough money to meet their expenses.
And before you state that shutting down the insurance companies will save a lot of money, how much money do you think the government will need to spend to set up their own billing and payment system? And do you think they can do it as cheaply as the insurance companies can? I worked for 22 years for the largest health insurance company in the country, all of it in the Medicaid division. The profit margin as governed by law is 2% and we made it work year after year. Do you honestly think the government can do it that cheaply?
and that 2% was how many hundreds of millions or billions, much of which ended up going to the industry lobbyists...to keep things as they are.
Having lived in countries that have ''national health insurance'' we, the US, have a lot to catch up with and drug prices are one of them.
I doubt if anything will ever be done to move us to a system that cares for all, sadly we are the ass end of the pony in that sense.
I just had a conversation with my doctor about this yesterday. He agrees that the US is just a stupid country for allowing itself to become what it is in this respect, among others. A new med that he wants to try for me costs about $550/mo, but only $25 with my insurance. It’s a med with an enormous advertising budget since I get assaulted with commercials for it numerous times a day. What a horrific business model. No doubt that as soon as the patent runs out it will cost pennies in generic form.
Capitalism makes the world go round...
Seven percent of Americans are severely obese, forty percent are ordinarily obese and another thirty two percent are just overweight. Stoners campaign for the right to be fucked up and smokers spend four hundred dollars a month on a killer habit. Stupid Americans - drug companies have you by the balls and it's largely your own fault. Now, you can flame away with your thyroid excuses.