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JUDY WOODRUFF: The costs of 
health care are a pocketbook 
issue for most Americans, and

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rising drug prices, 
a key part of that.

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People in the U.S. spend more 
on prescription drugs than in 
any other country, about $1,200

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a year per person.

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Insurers and the government 
pay the largest share.

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But it's costing consumers 
more money in premiums 
and out of pocket.

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Anger has been building 
over affordability and 
specialty drugs that 
cost tens of thousands

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of dollars.

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That was the backdrop for a 
much-anticipated Senate hearing 
today involving the drug makers.

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John Yang has that report.

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JOHN YANG: It has been decades 
since this many leaders of 
the top drug manufacturers

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have faced lawmakers under oath.

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Senators in both parties lashed 
out at their profit margins 
and pressed them to explain

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why drug prices keep rising.

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SEN.

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RON WYDEN (D), Oregon: All of 
you that are here today are 
here because the way you have

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been doing business 
is unacceptable.

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JOHN YANG: Finance 
Committee Chairman Chuck 
Grassley set the tone, 
tearing into the executives

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of seven pharmaceutical giants 
for shirking responsibility.

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SEN.

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CHARLES GRASSLEY (R), Iowa: 
Another yes-or-no question: When 
you're company prices its drugs,

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do you take into account 
the fact that a key player 
is the federal government?

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Let's start with AbbVie.

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RICHARD GONZALEZ, CEO, AbbVie 
Laboratories: We evaluate 
all the channels when we make

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determinations on price 
and affordability.

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SEN.

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CHARLES GRASSLEY: So, that 
obviously would include 
the federal government?

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AstraZeneca.

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PASCAL SORIOT, CEO, 
AstraZeneca: Yes, we do.

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SEN.

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CHARLES GRASSLEY: 
OK, Bristol-Myers.

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MAN: Yes, Senator.

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SEN.

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CHARLES GRASSLEY: 
Johnson & Johnson.

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WOMAN: Yes.

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SEN.

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CHARLES GRASSLEY: Merck.

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KENNETH C. FRAZIER, 
CEO, Merck: Yes.

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SEN.

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CHARLES GRASSLEY: Pfizer.

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MAN: Absolutely.

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SEN.

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CHARLES GRASSLEY: And Sanofi.

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MAN: Yes.

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JOHN YANG: The executives all 
said they were willing to do 
more to make sure people could

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afford the drugs they need, 
but offered few details.

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They said middlemen were to 
blame, and that developing new 
medicines requires billions

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of dollars in research.

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PASCAL SORIOT: Our 
company is dedicated to 
science and innovation.

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And in 2018, we invested 
nearly $6 billion in 
research and development.

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KENNETH C. FRAZIER: We're proud 
to have deployed 70,000 doses of 
our experimental Ebola vaccine

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in the Congo.

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JENNIFER TAUBERT, Executive Vice 
President, Janssen: We focus 
on discovering and developing

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transformational medicines 
for some of the world's most 
challenging diseases, including

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multiple myeloma, prostate 
cancer, HIV, schizophrenia, and 
Crohn's disease, among others.

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Janssen invested $8.4 billion 
in research and development 
last year in the search for

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medical breakthroughs.

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JOHN YANG: Democrat Maria 
Cantwell of Washington 
state pressed the 
executives to acknowledge

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that the government could 
help bring prices down.

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SEN.

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MARIA CANTWELL (D), Washington: 
I'm asking a really basic 
question, like the VA's ability

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to negotiate on drug prices.

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Do you think that states 
having that same ability 
drives down price?

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KENNETH C. FRAZIER: I would say 
that the VA would get a lower 
price and the states would

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get a lower price if 
you're willing to go 
into an environment where 
that could be imposed

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by the states.

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SEN.

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MARIA CANTWELL: Or the 
federal government?

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JOHN YANG: The hearing 
comes as President Trump 
targets drug costs.

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He's proposed ending Medicare 
and Medicaid rebates to 
middlemen and cutting the price

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Medicare pays for some drugs.

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DONALD TRUMP, President of the 
United States: At long last 
the drug companies in foreign

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countries will be held 
accountable for how they 
rigged the system against 
American consumers.

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JOHN YANG: Today, senators 
threatened congressional action.

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Several zeroed in on 
Richard Gonzalez, CEO of 
AbbVie, the maker of Humira.

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It's the bestselling drug in 
the world used for rheumatoid 
arthritis and other diseases,

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yearly sales nearly $20 billion.

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Over the last six years, 
the drug's price has 
doubled to $38,000 a year.

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More than 100 AbbVie 
patents and deals with 
other drug makers mean that 
lower-price competitors

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will not hit the U.S. 
market before 2023.

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SEN.

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JOHN CORNYN (R), Texas: 
How many patents?

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I'm sorry.

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RICHARD GONZALEZ: One 
hundred and thirty-six.

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SEN.

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JOHN CORNYN: One hundred and 
thirty-six patents on one drug?

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RICHARD GONZALEZ: But, well, 
remember, Humira is like nine 
different drugs or 10 different

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drugs.

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SEN.

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JOHN CORNYN: I thought you 
said to Senator Stabenow 
it was the same molecule.

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RICHARD GONZALEZ: It is the 
same molecule, but it treats 
different condition, and if

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you look at that 
patent portfolio...

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(CROSSTALK)

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SEN.

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JOHN CORNYN: So, you use the 
same molecule to treat different 
conditions, you can get

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a patent on that treatment?

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RICHARD GONZALEZ: Certainly.

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SEN.

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JOHN CORNYN: Mr. Chairman, I 
know this topic is the subject 
of -- or within the jurisdiction

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of the Finance Committee, but 
those of us like you and me 
who are also on the Judiciary

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Committee that has jurisdiction 
over the patent system, I think 
this is an area that we need

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to look in through our 
Judiciary Committee authority.

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JOHN YANG: Senator Ron Wyden 
of Oregon, the panel's top 
Democrat, asked Gonzalez if his

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compensation, which was 
$22 million in 2017, is 
tied to Humira sales.

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SEN.

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RON WYDEN: Would you make 
a smaller bonus if you 
dropped the price of Humira?

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RICHARD GONZALEZ: Humira was one 
element of a set of financial 
factors that were evaluated

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as part of my compensation.

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It's obviously a very 
significant product 
for us, so it's clear 
that it would be part

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of that evaluation.

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SEN.

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RON WYDEN: I would like that 
in writing within 10 days.

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JOHN YANG: Some CEOs, like 
Merck's Ken Frazier, said 
they were willing to do 
things like eliminating

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discounts that help 
protect their market share, 
but, overall, companies 
defended their practices.

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KENNETH C. FRAZIER: No one 
company can unilaterally 
lower list prices without 
running into financial

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and operating disadvantages.

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JOHN YANG: By the hearing's end, 
Wyden and other lawmakers said 
they were far from satisfied.

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SEN.

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RON WYDEN: I have heard a lot 
of happy talk this morning.

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JOHN YANG: Today's hearing 
featured more bipartisan 
criticism than in the 
past, but it is far

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from clear what action 
Congress will take as drug 
prices continue to rise.

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For the "PBS NewsHour," 
I'm John Yang.