Pharma Executives of BMS, J&J, and Merck Confronted in Senate Hearing on Sky-High Drug Prices
In a recent Senate hearing, the CEOs of Bristol Myers Squibb (BMS), Johnson & Johnson (J&J), and Merck faced scrutiny from lawmakers concerning the high costs of prescription drugs in the United States compared to other wealthy countries. Senator Bernie Sanders, chair of the Senate Health Committee, led the inquiry, highlighting that many Americans cannot afford lifesaving drugs due to substantial price differences between the U.S. and other countries.
Key facts from the hearing include:
- Executives from the three pharmaceutical companies defended the high prices for drugs in the U.S., conceding that patients in the United States paid more but suggesting that the prices were necessary to fund R&D.
- Senators confronted the CEOs with specific drug price comparisons, such as:
- BMS' Eliquis at $7,100 per year in the U.S. versus $900 in Canada.
- J&J's Stelara at $79,000 per year in the U.S. compared to $16,000 in the U.K.
- Merck's Januvia at $6,900 per year in the U.S., while Canadians pay $900.
- The Senate Health, Education, Labor, and Pensions (HELP) Committee published a report that demonstrated the significant gap between drug prices in the U.S. and other countries, and highlighted the companies' high profitability and heavy investments in stock buybacks and executive compensation.
- The CEOs argued that Americans have better access and availability to new drugs compared to other countries.
- J&J spent close to $78 billion in R&D since 2016, while Merck aimed to allocate $18 billion for R&D from 2023 to the 2030s.
- The discrepancy between U.S. drug prices and those in other developed countries was a contentious point.
- The HELP Committee's Majority Staff Report exposed tactics such as patent extension strategies, complex patent strategies, and lobbying efforts used by the companies to maintain market dominance in the U.S. amidst accusations of profiteering at the expense of patients' well-being.
- CEOs' testimony both acknowledged the high costs of drugs are necessary for covering R&D support the business practices and the profitability of the pharmaceutical industry's healthcare system, which is part of the defense pointed out that these high U.S. prices, and highlighted significant stock buybacks.