When huge pharmaceutical corporations are confronted over their exorbitant pricing of prescribed drugs within the US, they usually retreat to 2 well-worn arguments: One, that the excessive drug costs cowl prices of researching and creating new medication, a dangerous and costly endeavor, and two, that center managers—pharmacy profit managers (PBMs), to be particular—are literally those worth gouging Individuals.
Each of those arguments confronted substantial blows in a listening to Thursday held by the Senate Committee on Well being, Schooling, Labor and Pensions, chaired by Sen. Bernie Sanders (I-Vt.). In actual fact, pharmaceutical corporations are spending billions of {dollars} extra on lavish government compensation, dividends, and inventory buyouts than they spend on analysis and improvement (R&D) for brand spanking new medication, Sanders identified. “In different phrases, these corporations are spending extra to counterpoint their very own stockholders and CEOs than they’re find new cures and new therapies,” he stated.
And, whereas PBMs definitely contribute to America’s uniquely astronomical drug pricing, their profiteering accounts for a small fraction of the huge drug market, Sanders and an skilled panelist famous. PBMs work as shadowy center managers between drugmakers, insurers, and pharmacies, setting drug formularies and shopper costs, and negotiating rebates and reductions behind the scenes. Although PBMs practices contribute to general prices, they pale in comparison with pharmaceutical income.
Somewhat, the center of the issue, in line with a Senate report launched earlier this week, is pharmaceutical greed, patent gaming that enables drug makers to stretch out monopolies, and highly effective lobbying.
On Thursday, the Senate committee gathered the CEOs of three behemoth pharmaceutical corporations to query them on the drug pricing practices: Robert Davis of Merck, Joaquin Duato of Johnson & Johnson, and Chris Boerner of Bristol Myers Squibb.
“We’re conscious of the numerous vital lifesaving medication that your corporations have produced, and that is terribly vital,” Sanders stated earlier than questioning the CEOs. “However, I believe, as all of , these medication imply nothing to anyone who can’t afford it.”
America’s uniquely excessive costs
Sanders referred to as drug pricing within the US “outrageous,” noting that Individuals spend by far probably the most for prescribed drugs on the planet. A report this month by the US Division of Well being and Human Companies discovered that in 2022, US costs throughout all brand-name and generic medication have been almost 3 times as excessive as costs in 33 different rich nations. That signifies that for each greenback paid in different nations for prescribed drugs, Individuals paid $2.78. And that hole is widening over time.
Specializing in medication from the three corporations represented on the listening to (J&J, Merck, and Bristol Myers Squibb), the Senate report checked out how preliminary costs for brand spanking new medication getting into the US market have skyrocketed over the previous 20 years. The evaluation discovered that from 2004 to 2008, the median launch worth of modern prescribed drugs offered by J&J, Merck, and Bristol Myers Squibb was over $14,000. However, over the previous 5 years, the median launch worth was over $238,000. These numbers account for inflation.
The report centered on high-profit medication from every of the drug makers. Merck’s Keytruda, a most cancers drug, prices $191,000 a yr within the US, however is simply $91,000 in France and $44,000 in Japan. J&J’s HIV drug, Symtuza, is $56,000 within the US, however solely $14,000 in Canada. And Bristol Myers Squibb’s Eliquis, used to stop strokes, prices $7,100 within the US, however $760 within the UK and $900 in Canada.
Sanders requested Bristol Myers Squibb’s CEO Boerner if the corporate would “scale back the record worth of Eliquis in the US to the value that you just cost in Canada, the place you make a revenue?” Boerner replied that “we are able to’t make that dedication primarily as a result of the costs in these two nations have very completely different methods.”
The highly effective pharmaceutical commerce group PhRMA, revealed a weblog put up earlier than the listening to saying that evaluating US drug costs to costs in different nations “hurts sufferers.” The group argued that Individuals have broader, sooner entry to medication than individuals in different nations.