Thursday, when senators questioned three Big Pharma CEOs about the high price of drugs in the U.S., Health, Education, Labor and Pensions (HELP) committee chairman Bernie Sanders, I-Vermont, put the leaders on the defensive by citing their compensation and then referring to hundreds of needy cancer patients who had set up GoFundMe pages in hopes of collecting contributions to pay for their drugs.
“You made $52 million in total compensation in 2022,” Sanders said to Merck CEO Robert Davis. “Will you commit to not accepting a single dollar more in compensation until there is not a single GoFundMe page for Keytruda?”
Davis responded that more than 800,000 benefit from Merck’s patient assistance programs.
Sanders then posed similar questions to Bristol Myers Squibb CEO Chris Boerner, Ph.D., and Johnson & Johnson CEO Joaquin Duato about their respective blockbuster treatments Eliquis and Stelara.
And so it went for nearly three hours as 18 senators weighed in with their input and questions. A few of the lawmakers stood with the CEOs.
Sen. Rand Paul, R-Kentucky, used his allotted time to support the current healthcare system in the U.S. and railed against Senate Democrats for conducting “a show trial to harangue companies (who are) challenging the Inflation Reduction Acts' price controls in court.”
“One reason the U.S. leads in pharmaceutical innovation is because while the U.S. adhered to more market-based pricing and rewarded innovators, Europe adopted stringent price controls,” Paul added. “It’s not surprising that we lead the world in innovation and Europe does not.”
Despite the often partisan tone of Thursday's hearing, a Kaiser Family Foundation tracking poll from July of last year showed that there is widespread support for more government regulation of drug prices, with 82% of Democrats and 68% of Republicans saying that the government should play a greater role.
Senator Chris Murphy, D-Connecticut, pointed out that J&J spent more on stock buybacks and shareholder dividends ($17 billion) than it did on R&D ($14 billion) in 2022.
“We have to pay dividends because it’s the only way that the company can remain operational and sustainable,” Duato said. “If we’re not operational and sustainable, we are not able to fulfill our mission of developing medicine for patients.”
When Sanders asked Davis why the list price of Keytruda was $191,000 in the U.S. compared to $112,000 in Canada and $44,000 in Japan, the CEO said it was all about improved access in the U.S.
“We have 39 indications of Keytruda across17 tumor types in the United States. If you look across Europe, it’s in the 20s," David said.
The U.S. Chamber of Commerce echoed Davis' comments about superior access to treatment in the U.S., adding that price controls would lead to fewer new medicines and longer wait times for patients.
"We call on Chairman Sanders to abandon the political theatrics and refocus his efforts on real solutions," said Chamber EVP and chief policy offer Neil Bradley, who added that the hearing was a "heavy dose of partisan theatrics overshadowing a meaningful exchange of ideas."
A constant target throughout the hearing from both the lawmakers and the CEOs were pharmacy benefit managers (PBMs), the middlemen who manage prescription drug benefits on behalf of health insurers. When asked by Sen. Mitt Romney, R-Utah, what lawmakers could do to reduce the cost of drugs, Boerner took direct aim at PBMs.
“The rebates that are provided—if you could de-link that, it would be important and alternatively require that those rebates be passed on to lower out-of-pocket costs for patients,” Boerner said.
Later, Sen. Tim Kaine, D-Virginia, jumped on the anti-PBM bandwagon.
“We just have to simplify this and cut out a lot of the middlemen,” Kaine said. “PBMs aren’t doing a single bit of research. They’re not producing a single product and yet they seem to me to be the ones scooping up the most money that’s just sloshing through the system.”
After the CEOs departed, a panel of experts answered additional questions from the senators. Peter Maybarduk, the director of the Access to Medicines program at Public Citizen, flipped the PBM discussion.
“We heard some wild stuff up here this morning, including a lot of blaming the middlemen,” Maybarduk said. “Drugmakers’ high prices are the whole reason that we have a middlemen problem. It’s because we have exceedingly high prices at the outset that there’s an attractive market for middlemen to enter. But the fish rots from the head. If you break up the market, if you look at where the revenue is, drugmakers capture two-thirds, $323 billion, and pharmacy benefit managers are a small slice, $23 billion. You can’t fix the problem of the pharmaceutical industry by going off middlemen who are just trying to skim off the top. You have to get to the root of the problem which is the monopoly power.”