Pharma CEOs Will Be Examined in Senate Hearing Regarding Drug Prices

Paresh Jadhav

11 months ago

Drug pricing remains an emotive topic in the US, prompting three CEOs of major pharmaceutical companies to testify before the Senate HELP Committee and defend their prices and practices while attributing rising costs to middlemen such as pharmacy benefit managers and insurers.

Johnson & Johnson also promised to introduce cheaper generic copies of its best-selling medications after their respective patents expire, such as Keytruda for cancer treatments and Stelara for arthritis medications from Johnson & Johnson respectively.

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Pfizer

Pfizer is one of the largest research-based pharmaceutical and biomedical companies, producing such popular medications as Paxlovid, Prevnar, Elliquis, Ibrance Xeljanz Enbrel – in addition to operating an e-commerce website named drugstore.com. It was incorporated in New York in 1887.

Lawmakers from Merck, J&J, and Bristol Myers Squibb were interrogated by lawmakers about the “outrageously high cost of prescription drugs.” Since Estes Kefauver led his 1959-60 inquiry that introduced new legal standards for safety and effectiveness but failed to stop skyrocketing prices, congressional panels have conducted numerous hearings that focus on this issue.

Merck CEO Ken Frazier was called before a Senate committee to address rising list prices. They faced questions regarding why prices in the US are higher than elsewhere and their R&D investments, yet in other markets such as Russia or Mexico some medicines may cost less and/or access may be restricted due to lower prices.

Merck

Johnson & Johnson, Merck and Bristol Myers Squibb CEOs have agreed to testify before the Senate Health, Education, Labor and Pensions Committee’s hearing on high drug prices in America on Feb 8. This marks an impressive turnabout from initial plans when J&J CEO Joaquin Duato and Merck CEO Robert Davis both declined appearance.

Sanders and the majority staff of the panel pressured top executives of these pharmaceutical companies to explain why their best-selling drugs cost more in the United States than other countries; specifically focusing on blockbuster cancer immunotherapy Opdivo and psoriasis medication Stelara. CEOs provided various explanations including patent protection agreements or agreements which limit competition as reasons for any price differences in these cases.

Sanders also encouraged CEOs to commit to lower list prices in the U.S., suggesting that money currently spent on rebates to pharmacy benefit managers could instead go toward lowering out-of-pocket costs for patients. Unfortunately, most CEOs only made general statements in support of his view without making specific commitments or promises.

Bristol Myers Squibb

After years of public outrage over drug prices, a historic Senate committee hearing featured executives from Pfizer, Merck, Bristol Myers Squibb and Johnson & Johnson on Feb 26 at the Health, Education, Labor and Pensions (HELP) Committee hearing. Senators interrogated Chris Boerner of Bristol Myers Squibb (BMS), Robert Davis from Merck and Joaquin Duato from Johnson & Johnson over their high list prices for Eliquis, Stelara and Keytruda when compared to other countries.

The CEOs defended their pricing strategy by noting that Americans gain access to innovative medicines months or even years ahead of people living elsewhere, investing their revenues back into research and development of new treatments. Furthermore, they highlighted the advantages of value-based arrangements while supporting policies designed to encourage their use.

Senators also encouraged executives to pledge not to restrict entry of generic and biosimilar drugs – an action which has contributed to patent thickets which cause higher drug costs.

Johnson & Johnson

Senators interrogatedd CEOs of Johnson & Johnson, Merck and Bristol Myers Squibb (BMS) Thursday over their sky-high drug prices at a hearing of the Senate Health, Education, Labor and Pensions Committee chaired by Sen. Bernie Sanders.

Democratic senators quizzed executives to explain why American pay such high prices for medicines that often are no more effective than generic alternatives. Furthermore, they insisted that CEOs pledged to align their list prices with what customers pay in other countries such as Canada and Japan.

BMS CEO Christopher Boerner, Merck’s Robert Davis and J&J’s Joaquin Duato all defended their pricing practices and refused to commit to lowering drug costs to levels seen elsewhere. Patient assistance programs and the lengthy time it takes new medicines to reach market were offered as justification for these prices; additionally they refuted accusations they were cheating patients by hiding discounts they were receiving from pharmacies or insurance providers.