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Observe your favourite stocksCREATE FREE ACCOUNTSen. Bernie Sanders, left, seems at a information convention with Sen. Ed Markey on issuing subpoenas for pharmaceutical firm CEOs to testify concerning drug costs, within the Capitol, Jan. 25, 2024.Invoice Clark | Cq-roll Name, Inc. | Getty Pictures
Senators are questioning the CEOs of Johnson & Johnson, Merck and Bristol Myers Squibb on U.S. drug costs at a listening to Thursday, as lawmakers on each side of the aisle work to rein in excessive health-care prices for People.
The push to chop drug costs is a kind of uncommon hot-button points that unites the 2 main political events, although they typically again totally different approaches.
Roughly 9 million American adults didn’t take their medicine as prescribed in 2021 as a result of excessive value of medicines, in response to a federal survey. Prescription drug costs within the U.S. are additionally greater than 2.5 occasions as excessive as these in different high-income nations, one other federal report confirmed.
The Senate Well being, Training, Labor and Pensions Committee says that’s very true for a number of the prime medicine from J&J, Merck and Bristol Myers Squibb.
The committee’s listening to contains 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.
Forward of the listening to, the committee famous that the three corporations manufacture a number of the most costly medicine bought within the U.S.: Merck’s immunotherapy drug Keytruda, Bristol Myers Squibb’s blood thinner Eliquis, and J&J’s immunosuppressive remedy Stelara.
“The overwhelming beneficiary of those excessive drug costs is the pharma trade,” Sen. Bernie Sanders, who chairs the Senate Well being panel, mentioned through the listening to. He added that “they’re doing phenomenally nicely whereas People can not afford the medicines they want.”
Sanders hopes the listening to may bear fruit for People, particularly after Eli Lilly’s CEO promised to not elevate the costs of the corporate’s insulin merchandise throughout the same listening to in Might.
Drugmakers wish to shield innovation
In opening remarks, the three CEOs acknowledged the excessive value of health care within the U.S. However additionally they emphasised the necessity to strike a stability between decreasing costs and sustaining the pharmaceutical trade’s capability to put money into discovering new medicines.
“Sufferers bear the brunt of a posh U.S. system that sees rising health care prices and an absence of affordability. We’ve to make the system work higher for them,” mentioned Boerner, including that drugmakers “have a job to play in addressing affordability.”
However he added that Bristol Myers Squibb helps insurance policies that “decrease affected person out-of-pocket prices with out finally harming innovation.”
Duato famous that J&J costs its medicine to fulfill its dedication to innovate and develop new medicines for sufferers, which requires a “large” funding. J&J has spent almost $78 billion in analysis and growth since 2016, he mentioned.
Merck, for its half, invested $46 billion in R&D between 2011 to 2023, and expects to spend one other $18 billion within the 2030s, Davis famous throughout his opening remarks.
In the meantime, Bristol Myers Squibb has spent greater than $65 billion in R&D over the previous decade, in response to Boerner.
Nonetheless, a report launched Tuesday by the committee claims that J&J and Bristol Myers Squibb every spent $3.2 billion extra on inventory buybacks, dividends and govt compensation than they did on R&D for locating new medicine in 2022. Merck, nonetheless, spent much less on govt compensation than on R&D that yr, the report mentioned.
Annual drug prices, launch costs and patents
Within the report, the Senate committee mentioned the present annual value of Keytruda is $191,000 within the U.S. however considerably decrease in Germany, at $89,000, and in Japan, at $44,000.
The panel’s report cited drug pricing and reimbursement knowledge from NAVLIN, a drug worth database. The prices mirrored are checklist costs of the medicine earlier than insurance coverage and different rebates.
The report additionally famous that Keytruda’s annual value has elevated over time: It was $147,000 in 2015, the primary full yr the drug was available on the market.
Supply: Merck
In the meantime, the present annual value of Eliquis is $7,100 within the U.S. however simply $940 in Japan and $770 in Germany, in response to the report. Bristol Myers Squibb started promoting the therapy in 2013 for $3,100 within the U.S. and $1,000 in Japan.
The report mentioned the present annual value of Stelara is $79,000 within the U.S., whereas it’s $14,000 in Japan and $30,000 in Germany.
The three drugmakers “start by setting exorbitant costs for brand spanking new medicine,” the panel wrote in its report. “Then, as sufferers come to depend on these medicine, these corporations elevate costs, forcing sufferers to pay extra or abandon ongoing therapy.”
The report additionally highlighted methods that the committee mentioned J&J, Merck and Bristol Myers Squibb have been utilizing to “protect their pricing energy by any means essential.” That features submitting extra patents on the identical medication to increase its exclusivity, barring cheaper copycats from coming into the market.
Merck holds 64 lively patents and 51 pending patents on Keytruda, in response to the report, which cited a database known as the I-MAK Drug Patent Ebook.
Johnson & Johnson presently has 15 lively patents and 21 pending patents on Stelara. In the meantime, Bristol Myers Squibb holds 18 lively patents and two pending patents on Eliquis.
George Frey | Reuters
Record costs are additionally rising for brand spanking new medicine that the three corporations roll out, the report mentioned.
From 2004 to 2008, the median launch worth of recent pharmaceuticals bought by J&J, Merck and Bristol Myers Squibb was greater than $14,000. However over the previous 5 years, the median launch worth of recent medicine bought by these corporations was greater than $238,000.
Notably, a number of the prime medicine from the three corporations will probably be topic to the primary spherical of Medicare drug worth negotiations, a key coverage beneath the Inflation Discount Act that goals to make pricey drugs extra inexpensive 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 set up new costs to take impact in 2026.
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