JUDY WOODRUFF: The costs of
health care are a pocketbook
issue for most Americans, and
rising drug prices,
a key part of that.
People in the U.S. spend more
on prescription drugs than in
any other country, about $1,200
a year per person.
Insurers and the government
pay the largest share.
But it's costing consumers
more money in premiums
and out of pocket.
Anger has been building
over affordability and
specialty drugs that
cost tens of thousands
of dollars.
That was the backdrop for a
much-anticipated Senate hearing
today involving the drug makers.
John Yang has that report.
JOHN YANG: It has been decades
since this many leaders of
the top drug manufacturers
have faced lawmakers under oath.
Senators in both parties lashed
out at their profit margins
and pressed them to explain
why drug prices keep rising.
SEN.
RON WYDEN (D), Oregon: All of
you that are here today are
here because the way you have
been doing business
is unacceptable.
JOHN YANG: Finance
Committee Chairman Chuck
Grassley set the tone,
tearing into the executives
of seven pharmaceutical giants
for shirking responsibility.
SEN.
CHARLES GRASSLEY (R), Iowa:
Another yes-or-no question: When
you're company prices its drugs,
do you take into account
the fact that a key player
is the federal government?
Let's start with AbbVie.
RICHARD GONZALEZ, CEO, AbbVie
Laboratories: We evaluate
all the channels when we make
determinations on price
and affordability.
SEN.
CHARLES GRASSLEY: So, that
obviously would include
the federal government?
AstraZeneca.
PASCAL SORIOT, CEO,
AstraZeneca: Yes, we do.
SEN.
CHARLES GRASSLEY:
OK, Bristol-Myers.
MAN: Yes, Senator.
SEN.
CHARLES GRASSLEY:
Johnson & Johnson.
WOMAN: Yes.
SEN.
CHARLES GRASSLEY: Merck.
KENNETH C. FRAZIER,
CEO, Merck: Yes.
SEN.
CHARLES GRASSLEY: Pfizer.
MAN: Absolutely.
SEN.
CHARLES GRASSLEY: And Sanofi.
MAN: Yes.
JOHN YANG: The executives all
said they were willing to do
more to make sure people could
afford the drugs they need,
but offered few details.
They said middlemen were to
blame, and that developing new
medicines requires billions
of dollars in research.
PASCAL SORIOT: Our
company is dedicated to
science and innovation.
And in 2018, we invested
nearly $6 billion in
research and development.
KENNETH C. FRAZIER: We're proud
to have deployed 70,000 doses of
our experimental Ebola vaccine
in the Congo.
JENNIFER TAUBERT, Executive Vice
President, Janssen: We focus
on discovering and developing
transformational medicines
for some of the world's most
challenging diseases, including
multiple myeloma, prostate
cancer, HIV, schizophrenia, and
Crohn's disease, among others.
Janssen invested $8.4 billion
in research and development
last year in the search for
medical breakthroughs.
JOHN YANG: Democrat Maria
Cantwell of Washington
state pressed the
executives to acknowledge
that the government could
help bring prices down.
SEN.
MARIA CANTWELL (D), Washington:
I'm asking a really basic
question, like the VA's ability
to negotiate on drug prices.
Do you think that states
having that same ability
drives down price?
KENNETH C. FRAZIER: I would say
that the VA would get a lower
price and the states would
get a lower price if
you're willing to go
into an environment where
that could be imposed
by the states.
SEN.
MARIA CANTWELL: Or the
federal government?
JOHN YANG: The hearing
comes as President Trump
targets drug costs.
He's proposed ending Medicare
and Medicaid rebates to
middlemen and cutting the price
Medicare pays for some drugs.
DONALD TRUMP, President of the
United States: At long last
the drug companies in foreign
countries will be held
accountable for how they
rigged the system against
American consumers.
JOHN YANG: Today, senators
threatened congressional action.
Several zeroed in on
Richard Gonzalez, CEO of
AbbVie, the maker of Humira.
It's the bestselling drug in
the world used for rheumatoid
arthritis and other diseases,
yearly sales nearly $20 billion.
Over the last six years,
the drug's price has
doubled to $38,000 a year.
More than 100 AbbVie
patents and deals with
other drug makers mean that
lower-price competitors
will not hit the U.S.
market before 2023.
SEN.
JOHN CORNYN (R), Texas:
How many patents?
I'm sorry.
RICHARD GONZALEZ: One
hundred and thirty-six.
SEN.
JOHN CORNYN: One hundred and
thirty-six patents on one drug?
RICHARD GONZALEZ: But, well,
remember, Humira is like nine
different drugs or 10 different
drugs.
SEN.
JOHN CORNYN: I thought you
said to Senator Stabenow
it was the same molecule.
RICHARD GONZALEZ: It is the
same molecule, but it treats
different condition, and if
you look at that
patent portfolio...
(CROSSTALK)
SEN.
JOHN CORNYN: So, you use the
same molecule to treat different
conditions, you can get
a patent on that treatment?
RICHARD GONZALEZ: Certainly.
SEN.
JOHN CORNYN: Mr. Chairman, I
know this topic is the subject
of -- or within the jurisdiction
of the Finance Committee, but
those of us like you and me
who are also on the Judiciary
Committee that has jurisdiction
over the patent system, I think
this is an area that we need
to look in through our
Judiciary Committee authority.
JOHN YANG: Senator Ron Wyden
of Oregon, the panel's top
Democrat, asked Gonzalez if his
compensation, which was
$22 million in 2017, is
tied to Humira sales.
SEN.
RON WYDEN: Would you make
a smaller bonus if you
dropped the price of Humira?
RICHARD GONZALEZ: Humira was one
element of a set of financial
factors that were evaluated
as part of my compensation.
It's obviously a very
significant product
for us, so it's clear
that it would be part
of that evaluation.
SEN.
RON WYDEN: I would like that
in writing within 10 days.
JOHN YANG: Some CEOs, like
Merck's Ken Frazier, said
they were willing to do
things like eliminating
discounts that help
protect their market share,
but, overall, companies
defended their practices.
KENNETH C. FRAZIER: No one
company can unilaterally
lower list prices without
running into financial
and operating disadvantages.
JOHN YANG: By the hearing's end,
Wyden and other lawmakers said
they were far from satisfied.
SEN.
RON WYDEN: I have heard a lot
of happy talk this morning.
JOHN YANG: Today's hearing
featured more bipartisan
criticism than in the
past, but it is far
from clear what action
Congress will take as drug
prices continue to rise.
For the "PBS NewsHour,"
I'm John Yang.