Sen. Bernie Sanders, left, appears at a news conference with Sen. Ed Markey on issuing subpoenas for pharmaceutical company CEOs to testify regarding drug prices, within the Capitol, Jan. 25, 2024.
Bill Clark | Cq-roll Call, Inc. | Getty Images
Senators will query the CEOs of Johnson & Johnson, Merck and Bristol Myers Squibb on U.S. drug prices at a hearing Thursday, as lawmakers on either side of the aisle work to rein in high health-care costs for Americans.
The push to chop drug prices is one among those rare hot-button issues that unites the 2 major political parties, despite the fact that they often back different approaches.
Roughly 9 million American adults didn’t take their drugs as prescribed in 2021 because of the high cost of medicines, based on a federal survey. Prescription drug prices within the U.S. are also greater than 2.5 times as high as those in other high-income nations, one other federal report showed.
The Senate Health, Education, Labor and Pensions Committee says that is very true for among the top drugs from J&J, Merck and Bristol Myers Squibb.
The committee’s hearing will begin at 10 a.m. ET and include testimony from J&J CEO Joaquin Duato, Merck CEO Robert Davis and Bristol Myers Squibb CEO Chris Boerner. Duato and Davis had initially declined to seem.
Ahead of the hearing, the committee noted that the three firms manufacture among the most costly drugs sold within the U.S.: Merck’s immunotherapy drug Keytruda, Bristol Myers Squibb’s blood thinner Eliquis, and J&J’s immunosuppressive medication Stelara.
Sen. Bernie Sanders, who chairs the Senate Health panel, hopes the hearing could bear fruit for Americans, especially after Eli Lilly’s CEO promised not to lift the costs of the corporate’s insulin products during an analogous hearing in May.
A Merck spokesperson told CNBC in January that the corporate hopes that “this shall be a productive hearing aimed toward enhancing the committee’s understanding of the pharmaceutical industry and finding common sense solutions to the challenges facing patients.”
A spokesperson for J&J told CNBC in January that the corporate looks forward to “constructing an understanding of our longstanding efforts to enhance affordability and access to medicines.”
A spokesperson for Bristol Myers Squibb didn’t immediately reply to a request for comment ahead of the hearing.
Annual drug costs, launch prices and patents
In a report released Tuesday, the Senate committee said the present annual cost of Keytruda is $191,000 within the U.S. but significantly lower in Germany, at $89,000, and in Japan, at $44,000.
The panel’s report cited drug pricing and reimbursement data from NAVLIN, a drug price database. The prices reflected are list prices of the drugs before insurance and other rebates.
The report also noted that Keytruda’s annual cost has increased over time: It was $147,000 in 2015, the primary full yr the drug was available on the market.
Meanwhile, the present annual cost of Eliquis is $7,100 within the U.S. but just $940 in Japan and $770 in Germany, based on the report. Bristol Myers Squibb began selling the treatment in 2013 for $3,100 within the U.S. and $1,000 in Japan.
The report said the present annual cost of Stelara is $79,000 within the U.S., while it’s $14,000 in Japan and $30,000 in Germany.
The three drugmakers “begin by setting exorbitant prices for brand spanking new drugs,” the panel wrote in its report. “Then, as patients come to depend on these drugs, these firms raise prices, forcing patients to pay more or abandon ongoing treatment.”
The report also highlighted strategies that the committee said J&J, Merck and Bristol Myers Squibb have been using to “preserve their pricing power by any means essential.” That features filing more patents on the identical medicine to increase its exclusivity, barring cheaper copycats from entering the market.
Merck holds 64 energetic patents and 51 pending patents on Keytruda, based on the report, which cited a database called the I-MAK Drug Patent Book.
Johnson & Johnson currently has 15 energetic patents and 21 pending patents on Stelara. Meanwhile, Bristol Myers Squibb holds 18 energetic patents and two pending patents on Eliquis.
List prices are also increasing for brand spanking new drugs that the three firms roll out, the report said.
From 2004 to 2008, the median launch price of recent prescribed drugs sold by J&J, Merck and Bristol Myers Squibb was greater than $14,000. But over the past five years, the median launch price of recent drugs sold by those firms was greater than $238,000.
The report also said that J&J and Bristol Myers Squibb each spent $3.2 billion more on stock buybacks, dividends and executive compensation than they did on research and development for locating recent drugs in 2022. Merck, nevertheless, spent less on executive compensation than on R&D that yr, the report said.
Notably, among the top drugs from the three firms shall be subject to the primary round of Medicare drug price negotiations, a key policy under the Inflation Reduction Act that goals to make costly medications more cost-effective for seniors. That features Eliquis, Stelara and Merck’s diabetes drug Januvia.
J&J, Merck and Bristol Myers Squibb are all suing to halt the negotiations, which is able to establish recent prices to take effect in 2026.
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