With Merck, J&J and BMS CEOs set to testify, Sanders releases scathing report on drug prices

Two days ahead of a Senate hearing in which CEOs from three pharma majors will testify, Sen. Bernie Sanders, I-Vermont, has released (PDF) a report shedding light on the system that allows the companies to charge more for drugs in the U.S. than in any other country.

The report, from the Senate Committee on Health, Education, Labor and Pensions (HELP), zeroes in on the three companies that will be under fire on Thursday. Scheduled to appear are CEOs Chris Boerner of Bristol Myers Squibb, Joaquin Duato of Johnson & Johnson and Robert Davis of Merck & Co.

Among the findings highlighted by the HELP Committee were that in 2022, J&J and BMS each spent $3.2 billion more on stock buybacks, dividends and executive compensation than they did on research and development.

The report also says that if Merck’s megablockbuster cancer treatment Keytruda was its own company, its 2022 sales “would rival McDonald’s annual revenue and exceed the revenue of hotel chain Marriott.” Since 2015, Merck’s sales of Keytruda in the U.S. came to $43.4 billion compared to $30 billion for the rest of the world, the report said.

Meanwhile, since 2016, J&J’s sales of immunology drug Stelara were twice as much in the U.S. ($30.4 billion) as they were in rest of the world ($14.9 billion).

“The current industry business model is based on ripping off the American people,” the report contends.

Besides U.S. pricing, Sanders' staff report pings the companies for their spending on lobbying efforts and for erecting “patent thickets to extend their monopolies and delaying low-cost generic competition.”

The report will give the CEOs a primer of what’s likely to be discussed on Thursday. Boerner was the first of the three to agree to testify, while the other two initially declined. A vote was scheduled for Jan. 31 to decide whether to subpoena Davis and Duato before the CEOs eventually agreed to participate.

The Sanders-led HELP Committee has been pushing Big Pharma for answers on drug pricing for more than a year, previously summoning the CEOs from Moderna, Eli Lilly, Novo Nordisk and Sanofi.

Lawyers from the three companies set to testify have indicated their concern about the ulterior motives of the committee, pointing out that BMS, J&J and Merck are the lone companies remaining that are challenging the drug price provisions of the Inflation Reduction Act.

Last month, a J&J spokesperson said that while the company has “deep respect” for the HELP Committee’s work, the drugmaker had “concerns with the hearing as it is currently planned.”