Pharmaceutical CEOs Indicate Resistance to Price Reductions in Sanders Confrontation

CEOs of Bristol Myers Squibb Co., Johnson & Johnson, and Merck & Co. all declined to commit to lowering the list price of their drugs before facing market competition, despite pressure from high profile senators Thursday.

“Will you commit today at Bristol Myers Squibb to reduce the list price of Eliquis in the United States to the price that you charge in Canada, where you make a profit?” Sen. Bernie Sanders (I-Vt) asked CEO of Bristol Myers Squibb, Chris Boerner, in a Thursday hearing before the Senate, Health, Education, Labor and Pensions Committee.

“We can’t make that commitment primarily because the prices in these two countries have very different systems,” Boerner said.

Boerner was joined by Merck’s CEO Robert Davis who similarly reasoned the main driver for their high costs reflects their investment in drug innovation and access for patients, which is approached differently in other countries. The three CEOs all agreed to welcome cheaper, copycat versions of their drugs when the main patents for their top products expire.

Johnson & Johnson‘s CEO Joaquin Duato said he will commit to lower the price of medication Stelara in 2025 when competing drugs enter the market.

The push from Sanders, chair of the HELP Committee, in the hearing is the latest swing at reducing prescription drugs costs and reshaping price distribution in the US health care system.

The three CEOs acknowledged their high drug prices, but put the blame on pharmacy benefit managers and the pressure to keep up with innovation and treatment for drugs in the US.

Pointing to PBM Reform

In response to drugmakers signaling for more PBM control, Mitt Romney (R-Utah) asked the executives what Congress should be looking at in order to help.

“We may not have the right bad guys here,” Romney said.

“We have something here they don’t have in the rest of the world—these PBMs that want higher and higher list prices because they get paid based on how high the list price is,” he said.

Sen. Tim Kaine (D-Va.) questioned their thoughts on passing a PBM reform bill.

All three CEOs said the list prices would reduce and significantly reduce the out of pocket costs for the patient if the bill was passed.

“I know that in conversations with the chair, the intent is to move on that bill pretty soon, potentially with some other health items as well, and I think that the opportunity is right before us,” Kaine said.