J&J, Merck and Bristol Myers Squibb CEOs Defend Drug Costs at Senate Listening to

The chief executives of three main pharmaceutical firms defended the costs of their medicine in entrance of the Senate well being committee on Thursday, drawing them additional right into a confrontation with lawmakers and the Biden administration over the price of among the most generally used prescription drugs.

Lawmakers, together with Senator Bernie Sanders of Vermont, the panel’s chairman, famous that the businesses charged extra in the US than in different rich international locations, accusing them of profiting on the expense of American sufferers. The pharmaceutical executives — from Johnson & Johnson, Merck and Bristol Myers Squibb — conceded that sufferers in the US paid an excessive amount of however mentioned that new drugs arrived there sooner than wherever else on this planet.

Mr. Sanders, an impartial who has made reining in drug costs a signature explanation for his late-career years in Congress, acknowledged that the businesses had produced lifesaving medicine. However he singled out a number of broadly used drugs, together with Bristol Myers Squibb’s blood thinner Eliquis, which he famous might be bought for a lot much less in Canada than in the US.

“These medicine imply nothing to anyone who can’t afford it,” Mr. Sanders mentioned, including that “thousands and thousands and thousands and thousands of our folks can’t afford the outrageously excessive value of pharmaceuticals on this nation.”

The three executives who testified — Joaquin Duato of Johnson & Johnson, Robert M. Davis of Merck and Christopher Boerner of Bristol Myers Squibb — acknowledged that drug costs have been typically increased in the US than in different rich international locations.

However they mentioned decrease costs in Europe and Canada, the place governments are extra targeted on constraining prices, got here with essential downsides, like lengthy waits for brand spanking new medicine and restricted insurance coverage protection.

“America has constructed a well being care system that prioritizes affected person and doctor alternative in addition to the broad and fast availability of cutting-edge medicines,” Mr. Boerner mentioned.

At one level, Mr. Sanders, who accused the businesses of utilizing their drug income to complement executives and shareholders at the same time as sufferers struggled to pay for drugs, tried to solicit a promise from Mr. Boerner that the corporate would decrease the U.S. sticker worth of Eliquis to that in Canada. Mr. Boerner declined, citing the variations in Canada’s well being system.

The listening to befell as a brand new federal program authorizing Medicare to barter the costs of some pricey drugs is getting underway. Federal well being officers final week made their preliminary presents to the makers of the primary 10 medicine chosen for negotiations, a listing that features Eliquis and 4 different medicine offered by the businesses whose executives testified on Thursday. Drugmakers, together with all three firms represented on the listening to, have filed a flurry of lawsuits arguing that the negotiation program is unconstitutional.

Because the pharmaceutical executives sat earlier than them, lawmakers described anguished selections that sufferers with excessive drug prices had confronted. Mr. Sanders talked about a lady in Nebraska who he mentioned had died of most cancers after she arrange a GoFundMe marketing campaign to pay for Keytruda, a blockbuster most cancers drug from Merck.

Senator Christopher S. Murphy, Democrat of Connecticut, mentioned that one in all his constituents on Eliquis had to decide on between the price of the drugs, meals and hire.

Republicans on the committee pointed to what they mentioned have been the rightful market incentives that the businesses used to cost their medicine.

“In capitalism, if you happen to’re operating an enterprise the place you may have a fiduciary duty to your homeowners, you attempt to get as excessive a worth as you possibly can,” mentioned Senator Mitt Romney, Republican of Utah. He added: “You suppose Chevrolet sits again and says, ‘Gosh, how can we get the value of this Chevrolet down?’ No, it’s like, ‘How excessive a worth can I get and maximize the revenue for my shareholder?’”

The listening to got here after a standoff between Mr. Sanders and two of the pharmaceutical executives, Mr. Duato of Johnson & Johnson and Mr. Davis of Merck, who agreed to testify solely after being threatened with subpoenas. The 2 firms recommended final month that Mr. Sanders was looking for to retaliate for his or her lawsuits difficult the Medicare worth negotiation program.

Senator Invoice Cassidy of Louisiana, the highest Republican on the committee, mentioned the panel’s technique had been to “threaten a subpoena when C.E.O.s are suspicious that they received’t get a good shake, maintain the listening to, get sound bites, then choose one other set of C.E.O.s for a present trial.”

“However we don’t go significant laws,” he mentioned.

Costs for brand-name medicine in the US in 2022 have been on common at the very least 3 times as excessive as these in 33 different rich international locations, a current report funded by the Division of Well being and Human Providers discovered, even when considering reductions that scale back how a lot American well being plans and employers pay.

Evaluating drug costs in the US with these in different international locations might be tough as a result of the well being care techniques are so completely different. Whereas European international locations depend on a centralized negotiator, the U.S. system is fragmented, with tens of 1000’s of well being plans and employers counting on intermediaries to deal with their negotiations.

Whereas many pharmaceuticals might be purchased for a lot much less at European pharmacies, insurance coverage protection is commonly broader in the US, that means that American sufferers generally face decrease out-of-pocket prices than Europeans for a similar drugs.

On the listening to, the drug firm executives blamed middlemen referred to as pharmacy profit managers for saddling sufferers with excessive out-of-pocket prices. These companies procure reductions from producers that scale back the invoice for American well being plans and employers however not for sufferers. Profit managers earn more money when the sticker worth of a drug is increased, however sufferers typically need to pay extra. Lawmakers have proposed making modest adjustments to the practices of profit managers.