WASHINGTON — Pharmaceutical companies spend lavishly on stock buybacks and executive salaries even as Americans struggle to pay for their high-cost prescription drugs, Democratic House members said.
“For too long, Big Pharma has charged patients in this country exorbitant prices for critically needed drugs,” said Rep. Carolyn Maloney (D-N.Y.), chairwoman of the House Oversight and Reform Committee, which released a report Thursday afternoon on drug company spending. “Year after year drug companies rake in record profits, straining our healthcare system and forcing families to choose between medications and other essentials like food or retirement.”
The report — seventh in a series on drug company pricing — found that from 2016 to 2020, the 14 leading drug companies spent $577 billion on stock buybacks and dividends — $56 billion more than they spent on research and development (R&D) over the same period. In addition, pharmaceutical companies “have also spent over $3.2 billion to compensate their highest-paid executives over the past 5 years,” Maloney noted on a phone call with reporters.
“Some of these companies pay their executives millions of dollars, while raising prices on drugs that millions of Americans rely on,” she continued. “Our investigation has also shown that despite Big Pharma lip service about innovation, many drug companies are not actively spending significant portions of their research and development budget to discover innovative new treatments. Instead, these companies are spending their research and development dollars on finding ways to game the system and suppress generic competition … No one in this country should have to decide between putting dinner on the table and affording their medication.”
House Speaker Nancy Pelosi (D-Calif.) also spoke during the call. “Today’s report shows us a shameful unfairness of Americans struggling to afford the medicines they need to stay alive,” she said. “They’ve spent the staggering sum of $577 billion on stock buybacks and dividends in just the last 5 years — how can they say with a straight face that lower drug prices will have to come at the expense of research and development?”
“Americans are being charged up to five times as much or more for the same medicines that Big Pharma charges other countries,” said Pelosi. “Companies keep hiking prices for medicine discovered decades ago. We’re all for innovation. We understand that to be an investor, one needs to be a patient investor, but not to be an exploiter of the user of those drugs.”
Reporters also heard from Lynn Scarfuto of Herkimer, New York, a retired nurse who is taking ibrutinib (Imbruvica), made by AbbVie, to treat her chronic lymphocytic leukemia; the drug’s normal cost is more than $14,000 per month. “I don’t have the financial resources to pay for my medication, and not many people do,” she said. “I have secured short-term assistance to cover these prohibitive costs. Sadly, my help runs out at the end of the year. My inability to afford Imbruvica’s astronomical price once my assistance runs out would certainly expedite my death.”
“While my life is on the line, AbbVie and its partner Janssen raked in more than $4.3 billion in net revenue from Imbruvica in 2020 alone,” said Scarfuto. “That is nine times what the companies made in 2014. Yet AbbVie’s CEO admitted that the price increases that have led to the increased revenue had nothing to do with the innovation, or making the drug work better for patients like me. Big Pharma companies like AbbVie [rely] on patients and Congress alike to believe that we must face high prices to fund important innovation, but that is just not the case. So now I carry around the overwhelming burden of Imbruvica’s price tag, while drug corporations, as well as their CEOs, rake in millions and millions of dollars.”
Pelosi and Maloney expressed hope that patients like Scarfuto could be helped with H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, which would require the Department of Health and Human Services (HHS) to negotiate prices for certain single-source, brand-name drugs that don’t have generic competition. The negotiated maximum price may not exceed 120% of the average price in five countries — Australia, Canada, France, Germany, Japan, and the United Kingdom. The negotiated prices must be offered under Medicare and may also be offered under private health insurance.
The House passed the bill last summer, but the Senate — then under Republican control — didn’t take up the measure. Rep. Frank Pallone Jr. (D-N.J.) reintroduced the bill in April, and Sen. Ron Wyden (D-Ore.) is incorporating it into a larger budget bill that Senate Democrats are hoping to pass through the reconciliation process, which only requires 51 votes instead of a filibuster-proof 60 votes.
Brian Newell, spokesperson at the Pharmaceutical Research and Manufacturers of America, a trade group for drug companies, panned the committee’s report. “While we can’t speak to specific examples cited in the report, this partisan exercise is clearly designed to garner support for an extreme bill that will erode Medicare protections and access to treatments for seniors,” he said in an email to MedPage Today. “Every year, biopharmaceutical research companies invest tens of billions of dollars in the research and development of new cures and treatments, as well as our significant investments in time and resources creating treatments and vaccines to combat the global pandemic.”
“Nonpartisan experts have highlighted the fact that net prices for medicines are trending down while patients continue to struggle with high deductibles and other out-of-pocket costs,” he said. “We have put forward ideas that would lower costs at the pharmacy, while preserving choice, access, and innovation. We are committed to working with policymakers on commonsense, bipartisan solutions that address the real challenges patients face.”
Last Updated July 09, 2021