Vermont Business Magazine Senator Bernie Sanders (I-Vermont), Chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), today led the committee in a hearing titled, “Why Does the United States Pay, by Far, the Highest Prices in the World for Prescription Drugs?” – with the CEOs of Bristol Myers Squibb, Johnson & Johnson, and Merck all testifying.
Sanders’ remarks, as prepared for delivery, are below and can be watched live here:
The Senate Committee on Health, Education, Labor, and Pensions will come to order.
Let me begin by welcoming the CEOs of Bristol Myers Squibb (Chris Boerner); Merck (Robert Davis); and Johnson & Johnson (Joaquin Duato) for being with us this morning.
There is a lot of discussion about how "divided" our nation is and, on many issues, that is absolutely true. But on one of the most important matters facing our country the American people could not be more united – no matter what their political views. And that is the need to substantially lower the outrageously high price of prescription drugs in our country.
According to a recent poll, 82% of Americans say the cost of prescription drugs is too high, and 73% say that the government is not doing enough to regulate drug prices.
J&J, Merck and Bristol Myers CEOs defend drug prices in Senate hearing, as Biden tries to cut prices
As a nation we spend almost twice as much per capita as any other country on healthcare, over $13,000 for every man, woman and child. And one of the reasons for that is that we pay, by far, the highest prices in the world for prescription drugs.
The outrageous cost of prescription drugs in this country means that 1 out of 4 Americans cannot afford the medicine their doctors prescribe. How many die and how many suffer unnecessarily, nobody knows but my guess is that it’s in the millions. Meanwhile, our insurance premiums are much higher than they should be and hospital costs are soaring.
Further, the high cost of prescription drugs is putting an enormous burden on taxpayers and seniors by raising the costs of Medicare and Medicaid. Medicare alone spends over $135 billion a year for prescription drugs.
Meanwhile, as we pay, by far, the highest prices in the world for prescription drugs, ten of the top pharmaceutical companies in America made over $110 billion in profits in 2022 while paying their CEOs exorbitant compensation packages.
This morning we’re going to hear a lot from our CEO panelists about how high prices are “not their fault” and that PBMs are forcing Americans to pay much higher prices than they should be paying.
But let’s be clear.
In 2022, Johnson & Johnson made nearly $18 billion in profits, paid its CEO over $27 million in compensation and spent over $17 billion on stock buybacks and dividends.
That same year, Merck made $14.5 billion in profits, handed out over $7 billion in dividends to their stockholders and paid its CEO over $52 million in compensation.
And Bristol Myers Squibb made $8 billion in profits last year, while recently spending over $12 billion on stock buybacks and dividends and giving its CEO over $41 million in compensation.
Now, why did a majority of members of this committee invite these three pharmaceutical CEOs to testify today?
The answer is pretty simple.
Mr. Boerner: We want you to explain to the American people why Bristol Myers Squibb charges patients in America $7,100 a year for Eliquis when that same exact product can be purchased for just $900 in Canada and $650 in France.
Mr. Duato: Please tell us why Johnson & Johnson charges Americans with arthritis $79,000 for Stelara when that same exact product can be purchased for just $20,000 in Canada and just $12,000 in France.
Mr. Davis: Please tell us why Merck charges Americans with cancer $191,000 a year for Keytruda when that same exact product can be purchased for $112,000 in Canada and $91,000 in France.
And let’s be clear. Johnson & Johnson, Merck, and Bristol Myers Squibb are not just charging higher prices in the U.S. compared to other countries. They are also charging Americans much higher prices than they did in the past - even after accounting for inflation.
From 2004 to 2008, the median price of innovative new drugs sold by these 3 companies was just $14,000.
From 2019-2023, the median price of new drugs sold by these same 3 companies was $238,000 – and that is in inflation accounted for dollars. In other words, Americans are forced to pay higher and higher prices for the drugs they need to survive.
And let’s be clear. The overwhelming beneficiary of high drug prices in America is the pharmaceutical industry.
How do we know that? Because that is precisely what they tell their investors.
According to their own shareholder reports, Bristol Myers Squibb made $34.6 billion selling the blood thinner Eliquis in the U.S. compared to just $22.5 billion in the rest of the world combined.
In other words, the U.S. accounts for nearly two-thirds of all global sales of Eliquis. Not a single dollar of this revenue is going to PBMs. 100% of it is going to Bristol Myers Squibb.
Johnson & Johnson has reported to its shareholders that it made over $30 billion in revenue selling the arthritis treatment Stelara in the United States since 2016 – more than twice as much as the rest of the world combined. Not a single dollar of this revenue is going to PBMs. 100% of it is going to Johnson & Johnson.
Merck has reported to its shareholders that it made $43.4 billion selling the cancer drug Keytruda in the United States compared to $30 billion in the rest of the world combined. Again, not a single dollar of this revenue is going to PBMs. 100% of it is going to Merck.
Our CEO panelists from the drug companies will tell us this morning how much it costs to develop a new drug and how often the research for new cures is not successful. They are right and we get that. But what they have not told us in their written testimony is that 14 major pharmaceutical companies, including Johnson & Johnson and Merck, spent $87 billion more on stock buybacks and dividends over a recent 10-year period than what they spent on research and development.
In fact, Bristol Myers Squibb spent $3.2 billion more on stock buybacks and dividends in 2022 than it spent on research and development.
And Johnson & Johnson spent $46 billion more on stock buybacks and dividends than it spent on research and development since 2012.
In other words, these companies are spending more to enrich their own stockholders and CEOs than they are in finding new cures and new treatments.
The average American who hears all of this is asking a very simple question: How does all of this happen? How can drug companies charge us, in some cases, ten times more for the same product sold abroad, make massive profits and spend billions on stock buybacks? How do they get away with this when so many of our people suffer because they cannot afford the high price of prescription drugs?
How can it be uniquely among industrialized countries that these companies can raise prices to any level they want? How do they get away with all of that?
And here’s the answer: The United States government does not regulate drug companies. With a few exceptions, the drug companies regulate the United States government.
Over the past 25 years, the pharmaceutical industry spent over $8.5 billion on lobbying and more than $745 million on campaign contributions. And let me be fair here. They are equal opportunity contributors with huge amounts of money going to both the Democratic and Republican parties.
I am especially impressed by the Pfizer drug company contributing a million dollars to the Republican Party in Kentucky to expand its headquarters named after Senator Mitch McConnell.
Unbelievably, last year, drug companies hired some 1,800 well-paid lobbyists including the former congressional leaders of both major political parties – that’s over 3 pharmaceutical industry lobbyists for every Member of Congress.
Now, here is the good news. We are beginning to take on the greed of the pharmaceutical industry.
As a result of the Inflation Reduction Act passed a couple of years ago, Medicare, for the first time ever, is beginning to do what every major country on earth does and what the VA has been doing for more than 30-years: Negotiating to lower the price of some drugs, including Januvia, Stelara and Eliquis.
Let me conclude by saying that I am also proud of what the committee has already accomplished.
Last year, the CEO of Moderna committed during a HELP Committee hearing that his company would make certain that no one in America would have to pay for their vaccine out of pocket.
In a separate HELP Committee hearing last May, the CEO of Eli Lilly committed that his company would not raise prices on existing insulin products.
But let’s be clear: Much more needs to be done. I look forward to hearing from our CEO panelists as to how they will substantially reduce the price of prescription drugs in America.
Senator Cassidy, you are now recognized for an opening statement.
Source: WASHINGTON, Feb. 8 – Senator Bernie Sanders
