Biotech
Thursday, February 8th, 2024 4:19 pm EDT
Key Points
- Senators are grilling CEOs from Johnson & Johnson, Merck, and Bristol Myers Squibb on U.S. drug prices at a bipartisan hearing, reflecting widespread concern over high healthcare costs.
- The hearing follows reports that millions of Americans skip medication due to cost, with U.S. prescription drug prices significantly higher than in other high-income nations, particularly for drugs from the three companies in question.
- While the CEOs acknowledge the issue, they stress the importance of balancing price reductions with the need for pharmaceutical innovation. However, a Senate report reveals discrepancies, indicating that the companies spend more on stock buybacks, dividends, and executive compensation than on research and development. Additionally, the report highlights strategies employed by the companies to maintain pricing power, such as filing numerous patents to extend exclusivity. The situation has led to soaring drug prices and legal battles over Medicare drug price negotiations aimed at making medications more affordable for seniors.
The Senate Health, Education, Labor and Pensions Committee held a hearing to address the soaring costs of prescription drugs in the U.S., with CEOs from Johnson & Johnson, Merck, and Bristol Myers Squibb in attendance. The bipartisan concern over high drug prices is underscored by statistics revealing that approximately 9 million American adults didn’t adhere to their prescribed medications due to cost constraints in 2021, with U.S. prescription drug prices exceeding those of other high-income nations by more than 2.5 times. The CEOs, including Joaquin Duato, Robert Davis, and Chris Boerner, initially declined to appear but ultimately testified regarding their companies’ pricing strategies. Despite acknowledging the exorbitant costs, they emphasized the necessity of balancing affordability with maintaining innovation in drug development. However, a Senate report highlighted discrepancies between drug prices in the U.S. and other countries, citing examples such as Keytruda, Eliquis, and Stelara, which cost significantly less in foreign markets. The report also raised concerns about drugmakers’ tactics to preserve pricing power, such as filing numerous patents to extend exclusivity and thwart competition from generics. Additionally, it noted a stark increase in median launch prices for new drugs over the past decade. Some of the drugs discussed, including Eliquis and Stelara, are subject to Medicare drug price negotiations under the Inflation Reduction Act, a policy aimed at making medications more affordable for seniors. However, the pharmaceutical companies are contesting these negotiations through legal action.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/08/jj-merck-bristol-myers-squibb-ceos-senate-drug-price-hearing.html
