Senate Grills Pharma CEOs Over Sky-High Drug Prices Amidst Revelations of Financial Priorities

Featured & Cover Senate Grills Pharma CEOs Over Sky High Drug Prices Amidst Revelations of Financial Priorities

Sparks ignited on Capitol Hill Thursday as the leaders of three pharmaceutical giants faced interrogation from the Senate Committee on Health, Education, Labor, and Pensions regarding the substantial disparity in drug prices between the United States and other nations.

During the nearly three-hour session, executives from Bristol Myers Squibb, Johnson & Johnson, and Merck engaged in a heated exchange with the committee members over pricing strategies and the allocation of company resources.

Senator Bernie Sanders, the committee chairman, acknowledged the significance of the life-saving drugs developed by these companies but underscored the critical issue of accessibility, stating, “those drugs do nothing for anybody who cannot afford it.”

The committee’s analysis revealed staggering discrepancies in drug prices across countries. Merck’s cancer drug Keytruda, for example, costs $100,000 more in the U.S. than in France, while Bristol Myers Squibb’s Eliquis is nearly ten times pricier in the U.S. than in Germany, and Johnson & Johnson’s Stelara is five times more expensive in the U.S. compared to Japan.

Executives defended the higher prices in the U.S., citing faster access to new drugs and the substantial share of list prices claimed by pharmaceutical benefit managers (PBMs).

Merck’s CEO, Robert Davis, highlighted the increasing pressure from PBMs for larger discounts, resulting in a widening gap between list and net prices, ultimately to the detriment of patients.

However, legislators countered with examples such as Japan and Canada, where despite longer drug approval processes, life expectancies surpass that of the United States, challenging the notion that delayed access necessarily compromises health outcomes.

Senator Sanders confronted Merck’s CEO about the human toll of exorbitant drug costs, revealing instances of individuals resorting to crowdfunding platforms like GoFundMe to finance their treatments. He recounted the story of Rebecca, a Nebraska school lunch lady who tragically succumbed to cancer after struggling to afford Keytruda.

Behind the scenes, there was drama as Merck and Johnson & Johnson initially refused to testify, citing a lack of expertise on drug pricing. Senator Sanders deemed their excuses “laughable to absurd” and threatened subpoena before they agreed to testify voluntarily.

PhRMA, the pharmaceutical trade group, preemptively defended drug pricing disparities, arguing that earlier drug launches in the U.S. provide Americans with swifter access to medications. They also pointed fingers at high healthcare spending and PBMs.

A Senate report released earlier exposed the disproportionate allocation of resources by Bristol Myers Squibb, Johnson & Johnson, and Merck, revealing that they prioritize executive compensation, stock buybacks, and dividends over research and development.

Senator Sanders raised questions about the discrepancy between corporate spending and the pursuit of new cures, emphasizing the need for accountability and transparency.

The report further demonstrated that these companies generate more revenue from selling drugs in the U.S. than in the rest of the world combined, while drug prices either decrease or remain steady elsewhere.

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