(L-R) Joaquin Duato, CEO of Johnson & Johnson, Robert Davis, CEO of Merck, and Chris Boerner, CEO of Bristol Myers Squibb, testify earlier than the Senate Well being, Training, Labor, and Pensions Committee on the Dirksen Senate Workplace Constructing on February 08, 2024 in Washington, DC. The Committee held to listening to to investigating the price of prescribed drugs. (Photograph by Kevin Dietsch/Getty Photographs)
Kevin Dietsch | Getty Photographs Information | Getty Photographs
The CEOs of Johnson & Johnson, Merck and Bristol Myers Squibb defended excessive drug costs within the U.S. at a Senate hearing Thursday, because the White Home and lawmakers on either side of the aisle work to rein in excessive health-care costs for People.
The push to chop drug costs is likely one of the uncommon hot-button points that unites the 2 main political events, although they typically again totally different approaches to decreasing prices.
The Senate Well being, Training, Labor and Pensions Committee listening to comes at a pivotal time, because the Biden administration begins a long-awaited course of to barter drug prices instantly with producers — which is anticipated to ease stress on seniors’ wallets.
On the listening to, Merck CEO Robert Davis and Bristol Myers Squibb CEO Chris Boerner didn’t decide to slicing the costs of sure medication within the U.S. to match the decrease costs in different high-income international locations, comparable to Canada and Japan.
However they mentioned they might welcome cheaper copycats into the market when the principle patents on every of their top-selling medication expire. Drugmakers are infamous for utilizing totally different methods to increase the exclusivity of profitable medication.
J&J CEO Joaquin Duato additionally dedicated to reducing the worth of its immunosuppressive remedy Stelara in 2025, when competing medication will likely be allowed to enter the market.
Roughly 9 million American adults didn’t take their medication as prescribed in 2021 because of the excessive price of medicines, in accordance with a federal survey. Prescription drug costs within the U.S. are greater than 2.5 instances as excessive as these in different high-income nations, one other federal report confirmed.
The Senate panel mentioned that is very true for a number of the prime medication from the three drugmakers testifying Thursday, together with Stelara, Merck’s immunotherapy drug Keytruda and Bristol Myers Squibb’s blood thinner Eliquis. Eliquis and Stelara are each among the many first 10 medication topic to the Medicare value talks.
“The overwhelming beneficiary of those excessive drug costs is the pharmaceutical trade,” Sen. Bernie Sanders, who chairs the Senate Well being panel, mentioned through the listening to.
Robert Davis, CEO of Merck, testifies earlier than the Senate Well being, Training, Labor, and Pensions Committee on the Dirksen Senate Workplace Constructing on February 08, 2024 in Washington, DC.
Kevin Dietsch | Getty Photographs Information | Getty Photographs
The three CEOs acknowledged the excessive price of health-care within the U.S, however mentioned their costs mirror the worth of their life-saving medication to sufferers and the broader health-care system, together with their excessive investments in analysis and improvement.
In addition they claimed that medicines attain sufferers far quicker within the U.S. than they do in different international locations, and contended pharmacy profit managers — middlemen who negotiate drug reductions on behalf of insurers and different payors — typically pocket financial savings as an alternative of passing them right down to sufferers.
“Sufferers bear the brunt of a posh U.S. system that sees rising well being care prices and an absence of affordability. We’ve got to make the system work higher for them,” mentioned Boerner, including that drugmakers “have a task to play in addressing affordability.”
However he added that Bristol Myers Squibb helps insurance policies that “decrease affected person out-of-pocket prices with out in the end harming innovation.” Boerner didn’t level to particular insurance policies.
Duato famous that J&J costs its medication to satisfy its dedication to innovate and develop new medicines for sufferers, which requires a “huge” funding. J&J has spent almost $78 billion in analysis and improvement since 2016, he mentioned.
Merck, for its half, invested $46 billion in R&D between 2011 to 2023, and expects to spend one other $18 billion within the 2030s, Davis famous throughout his opening remarks.
In the meantime, Bristol Myers Squibb has spent greater than $65 billion in R&D over the previous decade, in accordance with Boerner.
Nonetheless, a report launched Tuesday by the committee mentioned J&J and Bristol Myers Squibb every spent $3.2 billion extra on inventory buybacks, dividends and govt compensation than they did on R&D for locating new medication in 2022. Merck, nonetheless, spent much less on govt compensation than on R&D that yr, the report mentioned.
“I feel most People could be fairly stunned, given how a lot the trade talks about analysis and improvement, that you’re truly spending extra money, shelling out cash to traders and shopping for again inventory than you’re on analysis and improvement,” Sen. Chris Murphy, D-Conn., advised the CEOs.
However Duato argued that paying dividends is how J&J stays operational and sustainable, which allows the corporate to develop medicines within the first place.
Senators highlighted the disparity between drug costs within the U.S. and in different high-income international locations. For instance, Sanders mentioned the present annual price of Eliquis is $7,100 within the U.S., however simply $900 in Canada.
He requested Boerner to decide to reducing the worth of Eliquis within the U.S. to the drug’s value in Canada.
Bristol Myers Squibb CEO Chris Boerner testifies earlier than a Senate Well being, Training, Labor, and Pensions Committee listening to on excessive drug costs on Capitol Hill in Washington, U.S., February 8, 2024. REUTERS/Leah Millis
Leah Millis | Reuters
However Boerner mentioned he couldn’t make that dedication, primarily as a result of the 2 international locations have “totally different techniques that prioritize very various things.” He famous that medicines in Canada are sometimes more durable to entry and take significantly longer to achieve sufferers in Canada than they do within the U.S.
Merck’s CEO provided an analogous response after Sanders requested him to decide to reducing the worth of Keytruda within the U.S. to its value in Japan. The panel mentioned the present annual price of Keytruda is $191,000 within the U.S., however considerably decrease in Japan, at $44,000.
“I feel it is also essential to level out that the entry [to drugs] in america is quicker and greater than anyplace on the earth,” Davis mentioned.
He added that Keytruda has many extra accredited therapy makes use of within the U.S., which is partly why the worth of the drug is greater than in different international locations.
Keytruda has 39 accredited makes use of, or indications, throughout 17 most cancers tumor varieties within the U.S., Davis mentioned. That quantity is within the 20s in Europe and even decrease in Japan, he added.
However these different indications typically give a drug different patents, which permits firms to increase a drugs’s exclusivity in the marketplace. Senators famous that Merck holds 64 energetic patents and 51 pending patents on Keytruda.
In the meantime, J&J at the moment has 15 energetic patents and 21 pending patents on Stelara. Bristol Myers Squibb holds 18 energetic patents and two pending patents on Eliquis.
“Pharmaceutical firms are doing all the pieces that they’ll to maintain their costs and their revenue sky excessive….a technique that firms do that is by submitting dozens, even lots of of frivolous patents that lock of their unique proper to promote their drug for many years,” mentioned Sen. Maggie Hassan, D-N.H.
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