Illustration: Aïda Amer/Axios
Three top pharmaceutical CEOs will be grilled Thursday on how they price drugs from Senate HELP Committee Chair Bernie Sanders. But it's an open question whether the high-profile gathering will have a lasting impact.
Why it matters: While Sanders argues his use of the bully pulpit last year helped extract insulin price concessions, it may be more difficult to secure changes this time around — unless one of the executives makes a misstep.
- And as with last week's Senate Judiciary hearing with tech giants, nuance can get overshadowed by sound bites, and it's still up to Congress to drive any change by passing laws or imposing penalties.
- That could be a tall order in an election year.
What they're saying: Sanders has argued that airing the drug pricing problem has achieved results before, citing Eli Lilly CEO Dave Ricks' pledge before HELP last year not to raise the price of insulin.
- "One of the tools that we have is public pressure," Sanders told reporters last month.
The intrigue: Two of the CEOs, Johnson & Johnson's Joaquin Duato and Merck's Robert Davis, declined to testify until Sanders threatened to subpoena them, and might not be eager to make many promises.
- Bristol Myers Squibb's Chris Boerner agreed to appear before the subpoena threat.
- Raymond James analyst Chris Meekins said there is not likely to be much substantive impact, barring a major gaffe from the CEOs in front of the cameras.
- "I'm not going to say, 'Who cares?' because you are sitting in front of U.S. senators and if you say something really, really dumb, you could lose your job, and so it matters," Meekins said. "But in the grand scheme of policy or investment, I think it's kind of a, 'Yep, Bernie being Bernie.'"
- "The CEOs know their businesses much better than the members of Congress and, beyond the sound bites of their opening statements, they are unlikely to accomplish more than making the CEOs uncomfortable," Ian Spatz, a former vice president at Merck who's now a consultant at Manatt Health, wrote in an email.
What we're watching: Sanders made clear what he is looking for.
- "We would like some simple answers as to: 'Why does the United States pay by far the highest prices in the world for prescription drugs?'" he said. "Sometimes 10 times higher for the same exact drug."
- He also could ask about lobbying and campaign spending. In a press conference, Sanders denounced the industry for having lobbyists "all over Capitol Hill."
- All three of the companies represented at Thursday's hearing are also pressing legal challenges against the Inflation Reduction Act's drug price negotiations, and some have accused Sanders of using the hearing as retribution — a charge he denies.
- Sanders wants to go much further than the IRA's negotiations, with legislation to require Medicare to pay no more for drugs than the Department of Veterans Affairs, a bill that has no chance in the current Congress.
Between the lines: The bigger unknown may be how much pressure Republican senators put on the CEOs.
- Ranking Member Bill Cassidy plans to say in his opening statement that the "committee has devolved into CEO whack-a-mole with little to show for it," and that he wishes Sanders would hold "a serious hearing that could inform serious legislation."
The bottom line: Even without immediate changes, the hearing could be memorably unpleasant for the companies.
- "It's going to be a really crummy three hours," Meekins said.
