Senators Ask CEOs Why Their Drugs Cost So Much More in the U.S.
Pharmaceutical executives face tough questioning on drug pricing practices in Senate hearing
In a fiery session on Capitol Hill, the CEOs of three major drug companies were grilled by the Senate Committee on Health, Education, Labor and Pensions about the exorbitant prices of their drugs in the United States compared to the rest of the world. The executives from Bristol Myers Squibb, Johnson & Johnson, and Merck faced intense scrutiny over pricing practices, the role of middlemen, and the disparity between drug prices in different countries. The hearing shed light on the growing issue of high drug prices and the impact it has on patients’ access to life-saving medications.
The Cost Disparity
The executives were confronted with data showing significant price differences between the U.S. and other countries for the same drugs. For example, Merck’s cancer drug Keytruda costs $100,000 more in the U.S. than in France, while Bristol Myers Squibb’s blood thinner Eliquis is nearly 10 times more expensive in the U.S. than in Germany. Johnson & Johnson’s arthritis drug Stelara also costs five times more in the U.S. than in Japan. These staggering price differences raised concerns about the affordability of medications for American patients.
The Role of Pharmaceutical Benefit Managers
The executives argued that pharmaceutical benefit managers (PBMs), middlemen who negotiate drug prices on behalf of insurers and employers, take a significant share of the list prices for themselves. They claimed that the negotiating power of PBMs has increased, putting pressure on drug manufacturers to provide larger discounts. However, senators challenged this argument, pointing out that countries like Japan and Canada, where drugs take longer to reach the market, have higher life expectancies than the U.S. This raised questions about the effectiveness of the U.S. system and the role of PBMs in driving up drug prices.
Patients’ Struggles and GoFundMe Campaigns
Senators highlighted the real-life consequences of high drug prices by sharing stories of patients who had to resort to crowdfunding platforms like GoFundMe to afford their medications. Sen. Bernie Sanders cited the case of a woman named Rebecca, a school lunch lady from Nebraska, who died of cancer after setting up a GoFundMe page to pay for Keytruda. The stark reality of patients relying on donations to access life-saving treatments underscored the urgency of addressing the affordability crisis in the U.S. healthcare system.
Drama Behind the Scenes
The CEOs of Merck and Johnson & Johnson initially declined to testify, claiming a lack of expertise on drug pricing. However, their refusal drew criticism from senators, with Sen. Sanders calling their reasons “laughable to absurd.” The committee threatened to subpoena the CEOs, but they eventually agreed to testify voluntarily. The episode highlighted the contentious nature of the hearing and the importance of holding pharmaceutical companies accountable for their pricing practices.
Senate Report on Financial Choices
Prior to the hearing, the Senate Committee released a report revealing that Bristol Myers Squibb, Johnson & Johnson, and Merck allocate more funds to executive compensation, stock buybacks, and dividends than to research and development. This finding raised concerns about the priorities of these companies, as they prioritize enriching shareholders and CEOs over investing in new cures and treatments. The report also highlighted the fact that these companies generate more revenue from selling drugs in the U.S. than in the rest of the world combined.
Conclusion:
The Senate hearing on drug pricing brought to the forefront the stark disparities in drug prices between the U.S. and other countries. The executives’ justifications for higher prices and the role of PBMs were challenged by senators, who emphasized the impact on patients struggling to afford life-saving medications. The hearing also shed light on the financial choices of pharmaceutical companies, raising questions about their priorities and the need for greater transparency in the industry. As the debate on drug pricing continues, it remains crucial to find solutions that ensure affordable access to essential medications for all Americans.