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.