Bernie Presses Big Pharma CEOs to Justify 'Outrageously High' U.S. Drug Prices

Senate HELP Committee mulls subpoenas if J&J, Merck CEOs refuse 'invitation' to testify.

(Updated to include responses from Merck and J&J)

Firebrand Senator Bernie Sanders is calling three pharma CEOs to Capitol Hill, pressing them to explain before lawmakers – and possibly under oath -- why their drugs sold in the United States cost hundreds and thousands of dollars more than in other countries.

The big question: Will the CEOs show up?

Sanders (I-VT), chairman of the Senate Health, Education, Labor and Pensions Committee, is incensed that Johnson & Johnson CEO Joaquin Duato and Merck CEO Robert Davis ignored the Nov. 21 request by committee Democrats to appear voluntarily. Sander says that he will ask his colleagues to subpoena the pair when the committee next meets on Jan. 31.

"It is absolutely unacceptable that the CEOs of Johnson & Johnson and Merck have refused an invitation by a majority of members on the HELP Committee to appear before Congress about the outrageously high price of prescription drugs," Sanders says.

Chris Boerner, CEO of Bristol Myers Squibb, has agreed to testify.

In letters responding to the "invitation" to testify, however, attorneys for Merck and J&J raised concerns that the hearing would "not serve a valid legislative purpose," but would instead devolve into a "broad-ranging public spectacle" that would subject the CEOs to "retaliation" for their lawsuit challenging drug price controls put forward in the Inflation Reduction Act.

"It is neither lawful nor appropriate for you to try to use the Committee's investigative powers to chill pending litigation or to punish the Companies for exercising their First Amendment right to raise constitutional challenges to congressional enactments,"  Jennifer Zachary, general counsel for Merck & Co. Inc., wrote in a Jan. 12 letter to Sanders.

If subpoenaed, Duato and Davis may be required to provide sworn testimony or risk fines or even jail time for contempt of Congress if they fail to show.

"These CEOs may make tens of millions of dollars in compensation. The pharmaceutical companies they run may make billions in profits," Sanders says. "That does not give them a right to evade congressional oversight. It is time to hold these pharmaceutical companies accountable for charging the American people the highest prices in the world for the medicine they need."

If the committee votes to subpoena, it would be the first time it has done so since 1981. It could create a juicy photo op with CEOs raising their hands to deliver sworn testimony, reminiscent of photos taken when the CEOs of Big Tobacco were called to Congress in 1994. 

‘Outrageously High'

Sanders offered a handful of examples that he says demonstrate the gaping chasm between drug prices in the United States and those charged in other countries.

• Merck sells diabetes drug Januvia for $6,000 in the U.S., $900 in Canada and $200 in France. Merck also sells cancer drug Keytruda for $191,000 in the U.S., and $89,000 in Germany.
   
• J&J's blood cancer drug Imbruvica sells for $204,000 in the U.S., $46,000 in the U.K., and $43,000 in Germany. J&J's HIV drug Symtuza sells for $56,000 in the U.S., and $14,000 in Canada.
   
• Bristol Myers Squibb sells its blood thinner Eliquis for $6,700 in the U.S., $900 in Canada, and $650 in France.

Sanders also noted that J&J made $17.9 billion in profit in 2022 and Duato made $27.6 million in compensation. That same year, Merck made $14.5 billion and Davis made $52.5 million, Bristol Myers Squibb made $6.3 billion and former CEO, Giovanni Caforio made $41.4 million in compensation.

The two holdouts notwithstanding, big pharma has otherwise complied with lawmakers' requests to appear. CEOs from Eli Lilly, Moderna, Sanofi, and Novo Nordisk have voluntarily testified before the HELP committee, albeit with a little prodding.

Last February, for example, just hours after being invited before the HELP Committee to explain a proposed $130 list price for COVID vaccines, Moderna CEO Stéphane Bancel announced that the drug maker would offer the vaccine for free, which Sanders sarcastically called "an amazing coincidence."

Eli Lilly CEO David Ricks told the committee in May that his company would not raise prices on existing insulin products, following public outrage over the skyrocketing costs of the century-old biologic.

'Retaliatory Motives'

In a Jan. 12 letter to Sanders, J&J attorney Brian E. Smith said his client "has two prinicpal concerns with the hearing."

"First, you and your staff have stated that the hearing will examine pharmaceutical pricing in the United States as compared to the rest of the world... a Johnson & Johnson representative is not an appropriate witness for these topics," Smith notes, adding that J&J does not hold the New Drug Application or FDA registration for Imbruvica and does not control the price in the United States, and that J&J has "only has the right to commercialize Xarelto in the United States and does not control the price outside of the United States." In addition, he noted that Stelara will have biosimilar competition in early 2025 from company that will set its own price.

"Second, and more importantly, your staff and your public comments have indicated that the hearing is intended to focus on the Inflation Reduction Act and, specifically, the companies that pursued litigation challenging certain aspects of the statute," Smith wrote. "Indeed, the Committee has chosen to invite the CEOs of three select companies that are currently engaged in such litigation."

"This targeting seems unlikely to be coincidental," Smith wrote, "and it raises significant concerns that the hearing is intended as retribution for the companies' decisions to exercise their rights to challenge a statute that inappropriately infringes on constitutionally protected freedoms. Moreover, these litigations are ongoing, and the issues raised in the litigation should be properly resolved in a courtroom, not in a Committee hearing."

Smith noted that the committee's insistance on hearing from Duato, and its refusal to hear from a expert on drug pricing offered by J&J "unfortunately elevates our concerns that the hearing is being called to punish the companies who have chosen to engage in constitutionally protected litigation... Compulsory process intended as retribution for pursuing constitutionally protected litigation would also exceed Congress’s authority under applicable Supreme Court precedent."

Merck General Counsel Zachary echoed those concerns, and suggested that any attempt to subpoena Davis would be challenged in court.

"The only companies that were called to testify were the three that had filed lawsuits–lawsuits that you have roundly criticized," she wrote. "That fact says much about the likelihood of retaliatory motives."

Inhaler Costs Leave Bernie Gasping

In a related action earlier this month, Sanders and Democrats on the HELP Committee sent letters to the  CEOs of  AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline, and Teva, -- the four largest makers of asthma inhalers -- telling them that the HELP Committee is "launching a major investigation into the extremely high prices these companies charge for inhalers that 25 million Americans with asthma and 16 million Americans with chronic obstructive pulmonary disease (COPD) rely on to breathe."

"There is no rational reason, other than greed, as to why GlaxoSmithKline charges $319 for Advair HFA in the United States, but just $26 for the same inhaler in the United Kingdom," the letters say. "It is unacceptable that Teva is charging Americans with asthma $286 for its QVAR RediHaler that costs just $9 in Germany. It is beyond absurd that Boehringer Ingelheim charges $489 for Combivent Respimat in the United States, but just $7 in France."

"Those prices are only possible in the U.S. because these companies have manipulated regulations to boost their bottom lines," the letters say.

The letters note that inhalers have been on the market since the 1950s and that most of the drugs within the inhalers have been around for more than 25 years. Yet, in the past five years alone, the four companies have reported making more than $25 billion from inhalers, and that between 2000 and 2021, manufacturers of all inhaler products in the U.S. raked in more than $178 billion in revenue.

Specifically, the letter asks the CEOs to explain:

• How they decide to add new features to old inhalers or to move patients off of old products and onto new products, tactics that keep lower-cost generics off the market.
   
• Whether the companies have evidence that their new products have any real clinical benefits compared to the old products.
   
• The costs involved in manufacturing their inhalers and information about their patient assistance programs – which provide free or discounted inhalers to patients – including how much the companies deduct from their corporate taxes for operating those programs.
   
• How much the drugmakers spend on research and development for asthma and COPD.