This morning, starting at approximately 10:15 AM ET, the United States Senate Finance Committee is holding a special hearing on drug pricing. Going before the Committee will be seven pharmaceutical executives:
Richard A. Gonzalez
Chairman And Chief Executive Officer
AbbVie Inc.
Pascal Soriot
Executive Director And Chief Executive Officer
AstraZeneca
Giovanni Caforio, M.D.
Chairman Of The Board And Chief Executive Officer
Bristol-Myers Squibb Co.
Jennifer Taubert
Executive Vice President, Worldwide Chairman, Janssen Pharmaceuticals
Johnson & Johnson
Kenneth C. Frazier
Chairman And Chief Executive Officer
Merck & Co., Inc.
Albert Bourla, DVM, Ph.D.
Chief Executive Office
Pfizer
Olivier Brandicourt, M.D.
Chief Executive Officer
Sanofi
The committee includes 27 senators, and is headed by Chuck Grassley (R - IA) and Ron Wyden (D - OR).
The updates will be provided in reverse chronological order. Please refresh to make sure you see the latest update.
1:27 PM: Grassley adjourns the hearing.
1:26 PM: Grassley sets a deadline of March 12 for the Senate panel members to submit further questions for the pharma execs for written response.
1:20 PM: Grassley is now asking a general question about whether there is anything the companies can do to aid change in Medicare or Medicaid prices? Like lowering list prices, he says. Bourla says prices will not be a growth driver for Pfizer. Frazier urges examination of the whole system. Soriot calls on the government to spur change.
1:18 PM: Senator Cassidy singles out Frazier about "walking away" from other countries that won't provide funding for innovation through high enough prices.
1:15 PM: Three more questions! Back to Wyden, who is quizzing Gonazlez on his compensation/bonus and how it factors into pricing of Humira. He again asks for it in writing. Then he mentions that he's heard a lot of "happy talk" at the hearing. Now he's saying he wants *in writing* if rebates go away, would you support a black-letter law about prices lowering by the amount that the rebates covered.
1:13 PM: Now they're revisiting the issue of how the US prices carry the weight of R&D for other countries that pay lower prices.
1:08 PM: Senator Young is discussing the "best price" concept in Medicare. Does it encourage the setting of a higher list price?
1:03 PM: Senator Daines is mentioning volatility and elasticity in drug pricing. He asks "who pays list price?" Is it people who can afford it the least? Frazier says the reimbursement procedure is regressive. Then the Senator asks what incentives contributes to high list prices.
12:56 PM: (Senator Cortez Masto) Do you spend more on R&D than marketing? all agree, but when administration costs are included, then this isn't necessarily the case. And, for those who have authorized generics, why do you continue to also sell the name brand of the drug? Frazier says it's due to an "opaque system" for patient info. She also asks about providing legislation for advance price hike notification. Some are for it, others say it would be problematic, although they do support transparency.
12:50 PM: (Senator Brown) Does the pharma industry benefit from taxpayer-funded research? Yes
Is it true that no other country invests more taxpayer dollars on research? Yes
Is it true that the US allows drug companies the longest period of exclustivity on biologics? Yes
Is it true Medicare cannot negotiate directly with drug companies? Yes
Is it true that US taxpayers subsidize marketing and advertising of drugs? Yes
Is it true that the US pays the highest drug prices in the world? qualified yes
Is it true that the pharma companies set the list price? qualified yes
12:45 PM: Senator Whitehouse is asking about off-patent monopolies. Lobbyists are making it difficult to solving this problem. Frazier agrees.
12:32 PM: Senator Cassidy is holding up two OTC products that cost $200 per month, which he says are the same as an Rx that is charged at $2600 per month.
12:26 PM: Senator Lankford brings biosimilars back to the conversation. Frazier has specific recommendations. We also hear from Bourla and Brandicourt.
12:21 PM: "Breakthroughs aren't breakthroughs if patients can't afford them." (Senator Hassan). She asks Talbert how JNJ's Talbert to define "pseudo-addiction." She wants to discuss how the companies increase the sales of their drugs.
12:15 PM: Senator Carol asks why should Americans shoulder the higher prices to help fund drug development?
12:03 PM: Senator Thune asks how changing rebates would affect list-price setting. Frazier says they would lower list prices.
11:59 AM: Senator Caron asks each executive about eliminating rebates, value-based pricing, and transparency. All executives appear supportive of these elements. Bourla indicates they will be disruptive, however.
11:54 AM Senator Capper is asking if anyone has used the Trump tax breaks to lower the cost of drugs. Answers are mixed - some of the foreign-based companies did not see much of a break anyway. Now he's asking about blocking doses of drugs for bioequivalant studies for generic development. Down the line, none of the firms claimed to be part of the blocking -- they all support the "CREATE" Act.
11:45 AM: Senator Cornyn is now asking Gonazlez about Humira. He says "I get it," we need to protect R&D and innovation, but why does Humira have 247 patents applications, some of which don't expire until 2074. Should AbbVie have an exclusive monopoly on this drug for this long? Gonzalez is defending how Humira treats a large number of diseases, and has spent a lot on clinical trials for the diseases.
11:41 AM: Senator Cantwell is asking about market-based pricing. Do states negotiating prices for a group of consumers drive down prices? Merck's Frazier says yes, but will also drive down innovation. She also asks about the "Netflix model."
11:39 AM: Stabenow is asking Gonzalez about Humira and why new patents are important and how that affects the increasing prices. Why are prices different in other countries?
11:35 AM: Senator Stabenow is talking about the American taxpayer is funding so much of research and grants. Also $80 billion was spent last year in marketing of drugs.
11:30 AM: Answers to that question -- Brandicourt -- innovation, Bourla -- breakthroughs for patients, Frazier -- solutions for patients and the viability of a changing system and how it would affect that, Talbert -- the challenging diseases, Caforio -- patients that need their cancers treated, Soriot -- the best scientists and demonstrating the value of their products, Gonzalez -- tough diseases and how spending more on medicine will reduce overall healthcare costs
11:29 AM: Senator Roberts asks, "what keeps you up at night?"
11:27 AM: Wyden asked Gonzalez to put in writing whether or not he makes profits in all other western industrialized countries.
11:22 AM: Senator Wyden is questioning now. He is specifically asking Gonzalez about whether he makes profits in Germany and France, where pricing is tighter. Gonzalez says yes, and then explains about variable international pricing models. Basically he is saying that R&D costs would not be able to be covered without high prices in the US.
11:19 AM: Now Grassley asks whether they consider the Federal government when setting prices. They all answered "yes" to this one. And his final question asks about rebate reform, to which all executives answered favorably.
11:16 AM: Grassley is asking his question first - does your company consider the possibility of negative public opinion when setting drug prices. Each of the execs answers "yes." Then he asked whether they considered the possibility of a Congressional hearing when setting list prices. Each of them answered "no" to this one.
11:15 AM: Senators are now going to be allowed to ask questions.
11:14 AM: Common themes of statements included: investment of large amount of $$ in R&D, Medicare Part D issues, rebate reform, transparency, value-based care.
11:12 AM: Brandicourt does not believe that the US should invoke price controls because of the harm it would do to innovation.
11:09 AM: Sanofi's Brandicourt is the last executive. Starting off by asking why insurers and PBMs are declining in the amounts they pay of drugs.
11:07 AM: Bourla also mentions value-based pricing and capping out-of-pocket costs in Medicare. Now mentioning biosimilars.
11:04 AM: Pfizer's Bourla is now making his statement. Using the term "misaligned" as many of the others have. Proposing transparency and rebate reform.
11:01 AM: Frazier is discussing transparency, value-based pricing, coupon reform, generics, and ending price-gouging. He also invokes a personal story of a parent with Alzheimer's.
10:58 AM: Merck's Frazier is up now. Starting of his statement with a record of Merck's R&D investments. "We go where the science leads us," with the goal being saving lives, no matter whether it is profitable or not.
10:55 AM: Taubert is discussing the issue of "balance." She is also bringing up Medicare Part D and how it has increased out-of-pocket costs. She says we need an "American solution" to this drug cost challenge.
10:53 AM: JNJ's Taubert is now making her statement. Discussing the personal story of her mother's lung cancer, as well as how JNJ is one of the world's top R&D investors. HIV is no longer a "death sentence."
10:50 AM: Caforio is also bringing up rebate reform. Also discussing generics and value-based pricing. He cautions the stifling of innovation, by bringing up the delay of drug approvals in other companies.
10:48 AM: BMS' Caforio is up now. He is discussing innovation and the advent of immuno-oncology and how it has changed the treatment of cancer.
10:47 AM: Soriot is now discussing biosimilar issues.
10:43 AM: AZ's Soriot is up now. In 2018 AZ invested 6 billion dollars in R&D. He proposes moving away from current rebate system, which is built on high list prices.
10:41 AM: Gonzalez is now giving a specific example of HCV and Medicare Part D.
10:38 AM: AbbVie's Gonzalez is up first. He's reading his statement, emphasizing the commitment of AbbVie to finding medicines for life threatening illnesses. He brings up Medicare Part D design as a problem with respect to pricing.
10:36 AM: Introduction of the pharma executives. They will each have five minutes for a statement.
10:31 AM: JNJ is given the award for flip-flopping. Wyden has made a point to directly speak to each of the companies represented with specific examples of "two-faced scheming" and profiteering. More emphasis is placed on blame-passing to regulators, PBMs, etc.
10:29 AM: Now Senator Wyden is giving awards for "emptiest pricing scheme." Pfizer and Merck are assigned first and second prize. Then he is speaking to Sanofi and its pricing of diabetic treatments.
10:26 AM: Senator Wyden is now providing his statement. He says drug pricing is "morally repugnant" and likens the pharma company's pricing strategy to cash-creating ATMs. He is now discussing AbbVie and Humira specifically.
10:22 AM: Senator Grassley, Chairman of the Committee is providing an introduction, and has set the first topic for discussion as the concept of "list price." He cautions several times that he doesn't want to hear the "blame game."