SACHA PFEIFFER, HOST:
Merck's cancer drug, Keytruda, costs $100,000 more in the United States than it does in France. Bristol Myers Squibb's blood thinner, Eliquis, costs almost 10 times more in the U.S. than in Germany. Senators questioned three drug company CEOs today about why American drug prices are so much higher than they are anywhere else. NPR pharmaceuticals correspondent, Sydney Lupkin, is here to tell us how it went. Hi, Sydney.
SYDNEY LUPKIN, BYLINE: Hi, Sacha.
PFEIFFER: This is not the first time legislators have held a hearing on drug prices. What was different about this one?
LUPKIN: Well, for one, the senators seemed especially prepared this time around. We've all probably heard the industry's explanations about how lowering prices would kill innovation. And so a few days before this hearing, the committee put out a report about how these companies were determining prices and spending their money. All three made more money on popular drugs in the United States than in the rest of the world combined. All three spent more on executive compensation, stock buybacks and dividends than on research and development. So that's the place that this hearing was really starting from.
PFEIFFER: And I understand there was some drama even before this report was released.
LUPKIN: Right. Two of the CEOs declined to testify at first. Merck said its CEO was a tax attorney and therefore didn't know about drug prices. But once the committee was weighing whether to subpoena them, they reconsidered. Here's HELP Committee chair Senator Bernie Sanders addressing them today.
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BERNIE SANDERS: We are aware of the many important lifesaving drugs that your companies have produced, and that's extraordinarily important. But I think, as all of you know, those drugs mean nothing to anybody who cannot afford it.
PFEIFFER: Sydney, at today's hearing, how did the CEOs respond to some of the questions being fired at them?
LUPKIN: You know, they made some familiar points about how high prices in the U.S. - the prices are higher in the U.S., but patients here actually get faster access to cures. And while there is some truth to that, Sanders and others were quick to point out that Americans aren't living as long as people in Canada or Japan, despite getting faster drug access. The drug company CEOs pinned some of the blame on middlemen - pharmacy benefit managers, or PBMs, who take a big chunk of that money that comes from high list prices. Here's Merck CEO Robert Davis.
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ROBERT DAVIS: Their negotiating strength has increased dramatically. In contracting with them, Merck continues to experience increasing pressure to provide even larger discounts. And the gap between list and net price continues to grow. And patients are not benefiting from the steep discounts we provide.
LUPKIN: Several senators responded that these companies aren't exactly hurting. They're still making most of their profits in the U.S.
PFEIFFER: It sounds like lowering drug prices is a popular move. Did the senators seem like they were in agreement with that?
LUPKIN: You know, they were, but they weren't exactly on the same page. At the start of the hearing, ranking member, Bill Cassidy, a Republican from Louisiana, faulted Sanders for organizing a show trial for political points rather than to craft legislation. But he did press the CEOs with some tough questions of his own. Some other Republicans - Mitt Romney, Rand Paul - talked about how this is just capitalism, and, of course, drugmakers are setting the highest prices possible, and good for them. But several Democrats asked about how these companies use loads of patents to block competition in the U.S., a point echoed by experts testifying later. The Democrats also got the CEOs to admit, for example, that they're still making a profit on drugs with lower prices outside the U.S. Congress has already passed some legislation to curb high drug prices here. We'll see if this leads to more.
PFEIFFER: That's NPR's pharmaceuticals correspondent, Sydney Lupkin. Thank you for covering this.
LUPKIN: You bet.
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