Pharma CEOs hold firm amid Sanders' grilling
Senate HELP Committee Chair Bernie Sanders landed some tough questions on three major pharmaceutical CEOs Thursday but didn't come away with new commitments to lower prices or other concessions.
Why it matters: Sanders relishes the ability to put public pressure on drug companies over their prices, but the CEOs of Johnson & Johnson, Merck and Bristol Myers Squibb showed an ability to stay on message.
Here are our takeaways:
1) No major cracks from the CEOs. There was no pivotal moment, like Meta CEO Mark Zuckerberg's apology to parents at a Jan. 31 Senate hearing on online safety.
- Ahead of the hearing, Sanders pointed to Eli Lilly CEO Dave Ricks' pledge before the panel last year not to raise the price of insulin.
- But J&J's Joaquin Duato, Merck's Robert Davis and Bristol Myers Squibb's Chris Boerner did not make similar promises.
- Noting that Merck's cancer drug Keytruda has an annual list price of $191,000 per year in the U.S. but costs only $44,000 per year in Japan, Sanders asked Davis if he'd commit to matching the lower price.
- Davis didn't. "First, I acknowledge the prices in the United States are higher," he replied. "But I think it's also important to point out that you get access in the United States faster and more than anywhere in the world."
2) Senators still landed some blows. Although there may not be any lasting changes coming out of the hearing, HELP members, largely on the Democratic side, did make the hearing uncomfortable for the executives.
- Sanders pointed to GoFundMe pages that consumers had to set up to try to afford their drugs.
- "Will you commit to not accepting a single dollar more in compensation until there is not a single GoFundMe page for Keytruda?" he asked Davis.
- Davis wouldn't go that far, saying only that the company is "very much sensitive to what's happening with patients" and pointing to its patient assistance programs.
3) The CEOs fell back on innovation and blamed PBMs. The CEOs repeated longstanding industry arguments that PBMs bear much of the blame for high prices, because they don't always pass the discounts they negotiate to patients. And they said higher prices are needed to fund innovation.
- The PBM trade group countered that the drug companies' strategy "is designed to avoid accountability and further boost profits and pricing power."
- Sen. Chris Murphy pressed Duato that J&J is "actually spending more money shelling out money to investors and buying back stock than you are on research and development."
- Duato responded that "our priority is investing in R&D" but "we have to pay dividends because it's the only way that the company can remain operational and sustainable."
4) Republicans largely avoided going on the attack. GOP senators criticized Sanders for bringing the CEOs before the committee and defended the executives.
- "We may not have the right bad guys here," said Sen. Mitt Romney. "These are the guys developing cures."
- He pointed to PBMs as sometimes favoring higher list prices so they get paid higher rebates.
- Ranking Member Bill Cassidy called it a "show trial" and "CEO whack-a-mole."