Welcome to the to todays hearing. Pursuant house rules, some members will appear inperson and others will appear remotely via webex. Some members are appearing in person, let me first remind everyone that pursuant to the latest guidance from the house attending physician, all individuals attending this hearing in person must wear a face mask unless they are speaking. Members who are not wearing a facemask will not be recognized. Let me also make a few reminders to those members appearing in person. You will only see members and witnesses appearing remotely on monitor in front of you when you are speaking in what is known in web ex as active speaker view. A timer is visible in the room directly in front of you. For members appearing remotely, i know you are all familiar with web ex by now but let me remind everyone of a few points. First, you will be able to see each person speaking during the hearing. Whether theyre there in person or remote. As long as you have your web ex set to active speaker view. If you have any questions about this, please contact the Committee Staff immediately. Second, we have a timer that should be visible on your screen when you are in the active speaker with thumbnail view. Third, the house rules require that we see you so please have your cameras turned on at all times. Fourth, members appearing remotely are not recognized should remain muted to minimize background noise and feedback. First, i will recognize members verbally but members retain the right to seek recognition verbally. And regular order, members will be recognized in scene already order for questions area lastly, if you want to be recognized outside of regular order you may identify that in several ways. You may use the chat function to send a request, you may send an email to the majority staff or you may unmute your mic to seek recognition. Obviously we do not want people talking over each other, so my preference is members use the chat function or email to facilitate formal verbal recognition. Committee staff will ensure i am made aware of the request and i will recognize you we will begin the hearing in just a moment when they tell me they are ready to begin the live stream. Are we ready . Can we check . Are we readyto begin the live stream. The committee will come to order. Without objection the chair is authorized to declare recess of the committee at any time. I now recognize myself for an Opening Statement. Good morning and thank all of you for being here today. A year and a half ago on january 29 , 2019 our former chairman Elisha Cummings held thiscommittees first hearing of the new congress. The topic of that hearing was the same issue we are examining this week. The astronomical price increases of Prescription Drugs. Chairman cummings cared deeply about this issue as the very first witness to come before our committee, we invited miss antoinette worsham. You may remember her. She testified about the devastation of losing her daughter who had to ration insulin because she simply could not afford it. Since chairman cummings is not with us today, id like to ask the committees indulgence to play a short clip of his Opening Statement fromthat hearing. Ive been waiting a very long time to hold this hearing. The past decade ive been trying to investigate the acts acts of Drug Companies of all sorts of drugs, old and new, generic and brandname. Weve seen time after time, that Drug Companies make money hand over fist by raising theprices of their drugs. Often without justification and sometimes overnight. While patients are left holding the bill. The pharmaceutical industry is one of the most profitable in the world and one of the most powerful. 14 Drug Companies each made more than 1 billion in profits just in the Third Quarter of 2018. And they have the best lobbyists money can buy. Let me be clear. There are powerful interests here that do not want us to interfere with those massive profits. But there is a strong bipartisan consensus that we must do something. Something meaningful to reign in the outofcontrol price increases. Even President Trump has said Drug Companies are quote, getting away withmurder. But tweets are not enough. We need real action and meaningful reforms. We all recognize that research and Development Efforts on groundbreaking medications remain immeasurable contributions to the health of americans. Including new treatments and cures for diseases that have affected people forcenturies. The bottom line is that ongoing escalation of prices by Drug Companies is simply unsustainable. This is a matter literally of lifeanddeath and we have a duty to act now. Our constituents are demanding it and i am grateful that we are finally starting down the road with this hearing. I remember chairman cummings hearing so very well. Sitting right here in this very chair. Listening intently to miss worshams testimony. His fierce determination, his empathy. I remember how he promised at the end of that hearing to do everything in our power to make sure no family ever faces this situation again. At that moment, chairman cummings was in the process of launching our committee on one of the most comprehensive and indepth investigations of drug pricing ever conducted by congress. Today, 18 months later i am honored to report someof our initial findings. At the outset its important to note that Drug Companies makeproducts we all need. We rely on this industry to develop critical new therapy, treatments and vaccines. But our committees investigation has revealed deeply troubling facts about how these Companies Price drugs we all rely on. Our committee has now reviewed more than 1 million pages of documents from some of the largest and most profitable drugcompanies in the world. These include internal Corporate Strategy documents and communications among top executives. Let me briefly describe three Main Findings from these documents. First, the documents show that these price increases are unsustainable. Either for Government Health programs or patients themselves. The documents have reviewed that we reviewed and show that Drug Companies continue to raise prices while raking in record profits and continue to put their products further out of reach for patients in the. To start this weeks back to back hearings we will hear today from the ceos of three companies. We will hear from the former ceo of celgene and the former ceo of Bristolmyers Squibb which acquired it last year. These Companies Sell the cancer drugs. They have tripled the price of this drug since 2005. Today, a course of this from is priced at more than 16,000 a month. Thats just per month. We will also hear from the ceo of the drug company teva. The Company Raised the price of this drug 27 times in 1997. A yearly course is now priced at 70,000. Nearly seven times higher than when it was first introduced. To put this in perspective thats more than the median entire income for the year in the United States. Second, the document reveals by the Committee Show that these massive price increases are based on generating windfall profits for these companies. Their shareholders and their executives area weve all heard the talking points from the drug company and their lobbyists, claiming they need to raise prices to pray for research. For lifesaving medications that pharmacy middlemen are driving up the prices. Or that they are committing significant funds to helping patients who cant afford the drugs. But the committees investigation shows that those claims are utterly bogus. They did not hold water. The documents we reviewed show that time and again drug company hike prices to meet their earnings target. And in some cases, so executives can get their personal bonuses for the year. Finally, these documents show Drug Companies are targeting the United States with the biggest price increases in the world. They know the federal government is currently prohibited by law from negotiating directly with Drug Companies to lower prices for medicare and beneficiaries. This may be the starkest finding of all. I was astonished to see some of the newdocuments we will be discussing today. The United States is where the Drug Companies are increasing their prices. Much more the than in any other country. And this is where they are making billions, billions of dollars in profits. Last december, the house passed hr three and renamed it in honor of Elijah Cummings. Lower drug costs now. This legislation would authorize medicare to negotiate directly with Drug Companies for lower prices. President trump supported this change on the campaign trail. But unfortunately he broke his Campaign Promise now opposes the change. The white house issued a statement declaring that if hr three were presented to the president quote, he would veto the bill. Instead of taking on the pharmaceutical industry like he promised , President Trump appointed former industry executives to keep positions. These included joe brogan, the former director of the white house domestic policy council. Mister grogan personally wrote an oped opposing hr three, one week before we passedin the house. Here is the bottom line. As a result of President Trumps reversal, drug prices have continued to skyrocket under his tenure. Drug Company Executives have continued to get rich. A recent report found Drug Companies have raised the list prices of more than 600 Single Source ran name drugs by a medium of 21. 4 percent just between january 2018 and june 2020. By any measure, President Trump has failedto reign in outofcontrol drug prices. There is no doubt that he has been scrambling ahead of the election. He promised to hand out a paltry 200 discount card but its failed to explain how this will help people facing tens of thousands of dollars in drug costs. The president also claimed he is banning us companies from charging more than they charge a broad. But experts exposed this tiny demonstration project as a transparent and futile attempt to create the impression of action where there really has not been any real let me close with this. As chairman cummings would have wanted we need to focus on people this affects the most. I would like to play statements from two patients who want to share their experiences with us about these two drugs and we will now play the patient videos. Im rainey cameron, 50 years old and im from minnesota. Im a single mom with two kids in college and in 2018 i was diagnosed with an incurable cancercalled multiple myeloma. Before my diagnosis i was a High School Math teacher and a longdistance runner but now i can no longer do either. Pipeline drug called revlemid to keep me alive and my drug costs are impossible for me to cover on my fixedincome. In order to keep taking a strong i will have to deplete my life savings, cash out my 401 k and sell my house. When those funds run out im not sure what ill do. Usually im a planner but i cannot plan for this. I am terrified for myfuture. My circumstances make me feel helpless at times but im grateful i can share my story with all of you. I urge you to consider patients like me as you work to hold drug counties accountable and fixthis broken system. Thank you my name is therese humphrey boggs, i am 66 years old and i live in portage indiana. I spend my life working as a nurse watching People Struggle to afford Prescription Drugs. I never thought it would happen to me. Until 2003, when i was diagnosed with multiple grade trellises. After my diagnosis, i began taking copaxone which caused 1800 per month at that time. And after oneyear , i wiped out my savings. And after that, i had to rely on grants to cover the cost. In 2017, lost my grandson at that time the price of paxil had risen to 6000 a month. I could no longer afford it so i went without the drug. When i was not on the drug, i lost shortterm memory and experienced declines in my cognitive function 30 business is difficult for me to enjoy the things that i love. Such as spending time with my grandchildren. My condition should progress faster just because Drug Companies want to make a few extra bucks. This Drug Company Price Gouging needs to change. As each of you were to reform the system i hope that consider patientslike me. Thank you. Thank you and i now recognize the Ranking Member for as much time as he would like for his Opening Statement. Thank you chairwoman maloney. I appreciate you calling this very important hearing today on the issue ofdrug prices. This is a critical issue for my constituents and these for all of our constituents and im committed to working with you to identify and implement reforms that will improve access and affordability to Prescription Drugs. This concern is also shared by the president. Over the course of thelast three years President Trump has taken. To address drug prices. Under the Current Administration, drug prices have fallen over 13 percent on the expected trend. Under President Trump a Record Number of generic drugs have been approved saving americans tens of billions of dollars. Under the Trump Administration terminally ill patients are given a chanceto explore , innovative treatment options. So were all in agreement that drug pricing is a crucial issue for us to consider. However, im worried madame chairwoman about the apparent intentions of the majority in holding this weeks hearings. Instead of considering potential reform, and a productive and bipartisan manner, these hearings seem designed to develop by publicly shame pharmaceutical Company Executives. A productive set of hearings would consider the pros and cons of various reforms and would seek to retain the positives from the Current System while identifying improvements where necessary and possible. Instead, democrats seem eager to cast our witnesses as villains to place all blame for access issues on the private sector. The causes i think are far morecomplicated. Many of the greatest healthcare initiatives and innovations in the past100 years have happened in america. And they have happened not because of government dictates but as a result of the tireless work of individuals having the freedom to experiment and compete and improve all of our lives. At this moment in time, the entire world is cheering on the pharmaceutical industry to find a safe and effective vaccine to stop covid19. Thats the path to a more complete return to normalcy. To reopening our economy, to getting our kids back to school and getting parents back to work. Under the Trump Administration we are seeing the fastest Vaccine Development in history. Its unprecedented. A near 43 days passed between sequencing of the coronavirus rna and the start of Vaccine Development. As doctor found he and others have testified, safety is not being sacrificed but the financial risk are high. Im hopeful democrats on this committee can stop the repeated attacks on the Vaccine Development process do nothing but undermine the efforts of so many government and private sector scientists. Regarding the matter before us today, the policy challenge is ensuring we got feel the motive to develop new cures while at the same time taking targeted steps to address specific concerns regardingcost and patient access. The problem madame chairwoman is not that the free market has failed. Rather, the problem is that overly complex regulations and government interventions in the market have distorted incentives and created barriers to competition. I dont believe that more bureaucracy is the answer. We must rethink regulations that distort process and ensure that adequate compensation happens in the marketplace. And yes, we should consider any needed reforms to what the founders envisioned as a limited guaranteed to profit from an invention that times has been distorted into an unlimited ability to exclude others from selling similar Prescription Drugs. I look forward to hearing from todays witnesses about how best to ensure america remains at the forefront of innovation and discovery while addressing Prescription Drug pricing and accessibility. I hope we choose to do that in a manner that takes into account the complexities of modern or mystical development and the lifesaving innovations companies such as those appearing before us today have provided us all instead of creating false and simplistic narratives about the private sector. Thank you madame chairwoman and i kneeled back. Thank you, i now recognize mrs. Fox who is the Ranking Member of the committee on education and labor for her Opening Statements. Thank you madame chairwoman. Many americans pay you much for Prescription Drugs. Its not right and the Congress Needs to step up. Luckily we have a solution that had lower costs at the drugstore for patients and seniors. This solution can be passed into law before the election. Lowered costs or cure, hr 19 or republican alternative to democrats hr three combines many bipartisan reforms to lower outofpocket spending. Protects access to new medicines and cures, strengthens transparency and champions competition. To the contrary, democrats hr three and actually eliminate 30 new drugs over the next two decades area new drugs that could cure alzheimers, cancer or covid19. Hr 19, the republicans will make research and development more competitive by reducing companies availability to game the system and engage in anticompetitive behavior. Hr three would hide the cost of Prescription Drugs behinda wall of medicare bureaucracy. The republican bipartisan bill on the other hand would require Insurance Companies and pvms to be more transparent where drug costs would be available to patients at the Doctors Office before the prescription is even written. Hr three x no effort to require pharmacy benefit managers to pass rebates for manufacturers. Hr 19 would require a portion of rebates to pms be passed directly to the patients at the pointofsale. Saving seniors millions. Hr three times to use the power of the government to Seal Companies intellectual property. To decrease the cost of the drug in the short run. Hr 19 clears the way for more inerrant and bio similar to come to market, increasing competition rapidly driving down costs for patients and ensuring access to new innovative medications. Hr three ignores the cost of administering Cancer Treatments forMedicare Beneficiaries. Hr 19 plus the cost of chemotherapy in half by providing incentives for highquality care instead of merely giving priority to the location of treatments. Instead of passing common sense reforms contained in republicans hr19 , democrats have chosen to discord months of bipartisan work and conduct this partisan hearing attack companies that are working to help theAmerican People. The democrats had a choice to help americans or help speaker policy. Sadly, they chose to help speaker policy. Thank you again madame chairwoman, i feel that. I now recognize mister heiss for an openingstatement. Command chair and as my colleague from North Carolina just mentioned, hr three really would completely got the pharmaceutical innovations which we also desperately need and we rely upon. In fact the Congressional Budget Office said it would result in 38 fewer cures over the next 20 years. Thats a significant number. They also estimated it would result in as many as 100 fewer cures from coming to the market. So just think of that. 100 cures from coming to the market. We just saw a video. It could result in potentially a cure from deadly diseases like multiple sclerosis like we just saw or als or alzheimers or even covid19. We dont need to have fewer that could eventually the market not coming to market but according to ceo hr three. And by the way these cures dont come cheap. It is not unusual for some of these medications to cost as much as 2 and a half billion dollars through rmc and so forth to even come to the market to begin with and thats not even to mention, not even to consider the fact that in more than 90 percent of these drugs that enter into fda Clinical Trials never gain fda approval. And so weve got enormous expense with these companies trying to bring that medication to the market, 96 percent plus of which never make it to the market and so let me just be clear. The fda rigorous process is a huge reason why so Many Americans trust that the medications and the vaccines that come to market are safe. And dependable. And unlike many of my colleagues on the other side of the aisle, i trust the process and i know that it will bring a safe and effective vaccine to the American People for covid through operationwork speed. Vital pharmaceutical companies are far outspending the federal government for r and d, for cures for various diseases and thats exactly why we need to be willing to work in order to make innovation easier so that more americans can live fuller and happier lives, not killing innovation with too much government. So im sad to see that todays hearing shows frankly at least in my opinion that my colleagues on the other side of the aisle are not interested in a bipartisan solution to bring more cures to save american lives and instead, they think its more beneficial for their reelection campaigns to attack pharmaceutical executives and i greatly think that is a huge mistake for the American People. And with that madame chair i appreciate the time and i yield back. Thank you. I now recognize congressman roy who is the Ranking Member of the subcommittee on civil rights and Civil Liberties for an Opening Statement. I want to thank you chairwoman maloney. It really seriously, thank you for getting us Opening Statements. You didnt have to do that and we are grateful that you did so. We all recognize its a major concern to all americans because lives literally depend on their existence, availability and effectiveness. The drug pricing issue is heavily focused on blockbuster biological drugs and that cost a lot of money. Can sitter. 4 percent of us prescriptions are biologics and 40 percent of drug spending. 90 percent of drugs in the United States are generic and relatively inexpensive so lets have a hearing, lets keep perspective on focusing on solving the problem as a whole rather than vilifying certain actors. Lets notplay the game. The game in washington is to clearly target one industry for political purposes who of course in this case youre talking about Drug Companies. Of course they got plenty of blame to share but hardly all the blame. Lets look at pharmaceutical benefit managers. The patent trademark offices and Insurance Companies, the fda, hospital corporations and the government regulations federal state and local. Last year in a hearing one of my colleagues who happens to no longer be part of the committee was eviscerating a drug company gilead, a company that makes hiv lifesaving drugs for making profit. I said something to the effect of i hope they do make a profit but with the caveat that this kind of innovation saves lives. When i was battling lymphoma. And i caveat that we root out the slot games that result in regulated corporate crony profits versus the kind of profit that drives innovation and save lives. Many of us have had our lives saved by the innovative work of scientists around the globe. Likely many from drugs created by the Companies Represented here but i would note chairman cummings who we all miss and i was like you played that video noted these Companies Often make money out of tax wrapped around Government Research and we should address that and i think most of us do but he also specifically gave me time to highlight my life story and perspective and pulled me aside after the hearing to agree that we must have innovation, that we must ensure we have the drugs to save lives and i would note the company we are working overtime to produce covid vaccines as we speak. She sees it as a troubling situation but it isnt this body fault. We allow the complex mask of government regulations coupled with Insurance Companies to have control of our Healthcare System and powering hospital corporations to rollover customers because there is no market. There is no doctorpatient relationship that is sacrosanct and enables patients to price things properly. This is a Problem Congress has largely created. We want to address it we need to look at the entire supply chain from top to bottom. Specifically like in 2018 on a type of insulin that had 74 protections from competition making it harder for diabetics to access cheaper insulin. This is what happens with limited constant competition. Since 2016 the fda has approved 2500 generic versions of 620 brand name drugs. Pharmaceutical drugs with at least four generic competitors reduced the price of the brand drug by 39 percent but the fda is costly and inefficient. More than 6 billion in research to get the new treatment through the market and only one in 1000 drug formulas to ever get complete clinical testing, eight percent of those getfda approval and once the drug clears the labyrinth of patent law and the winds of the almighty fda the drug still has to make it on the formulary of your Insurance Plan in order for you to receive your discount. The Health Care Bureaucracy this body has created is guilty of lining the pockets of these companies beyond what the market would demand both insurance and pharma and not for to forget edms which are far from innocent. The United States spent 335 billion on retail Prescription Drugs, 10 percent of our National Health expenditure but we spent 1. 2 trillion on insurance , 34 percent of National Health care expenditures so where should the focus be, the Health Care System or just pharma. Our system should be able to help them defray costs. This is understood to happen through insurance and risk adjustment but its become too expensive for most americans and often its this body fault. The aca regulation caused premiums to double from 2013 to 17, increase overall by 60 percent from 2010 to 2017, deductibles increased 76 percent. Worse yet data shows while premiums were striking due to obamacare unsubsidized people and the individual market were losing their coverage. In just two years from 2016 to 2018 unsubsidized declined by 2 and a half million people, a 40 percent decrease. This makes it harder to defray costs and forces many to pay the list price which could be avoidable. There are always bad actors who take advantage butlets not forget congresss role in creating the system causing it. I know im running town out of time but id also point out each one of these companies are working today to engage in the fight and create a vaccine against the virus. Innovation in the pharmaceutical industry is critical and without it lives are lost. None of us will have Affordable Drugs. We want Affordable Drugs rather than expensive drugs that the rest of the world piggybacks on the back of americans and to do that lets do with this body never does roll up our sleeves, empower patients and doctors and remove all the bureaucrats and middlemen who are the ones driving up costs. I look forward tohearing from the witnesses and i appreciate the time you gave us this morning chairwoman maloney. I now recognize my colleague and good friend congressman welch who worked very closely with chairman cummings on this issue for his Opening Statements thank you madame chair and i thank my colleagues. Every single american, every single taxpayer at one point or another is going to need pharmaceutical assistance. In every single american and every single taxpayer, everybody who pays a premium, every employer who pays premiums on behalf of his or her employees needs relief from prices that are absolutely beyond reach. The question for this congress is whether our government will play a role in active role to stop price gouging either the pharmaceutical industry. And let me be candid. There is a disagreement about that. This legislation would enable the government on behalf of the people it serves to negotiate prices when it purchases Prescription Drugs from the pharmaceutical industry. This is not a question of whether those are necessary. Its not a question of whether the investigatory and Research Work that pharma does is good. It is. Its about whether there is any limit on what the pharmaceutical industry can charge the taxpayer, the medicare programs, the Medicaid Programs, employers who provide insurance to their employees. What elijah understood is that the government that is here to serve the people have a responsibility to do things that protect them from price gouging and yes, its true. Many of these pharmaceutical industries have come up with life saving and pain relieving medications but theyre telling us with the prices they charge. And what this report shows is that there is a very Clear Strategy on the part of the pharmaceutical industry to boost its prices in the place where it can andthats the United States of america. Ours is literally the only country where the government wont protect its citizens from price gouging. Now, the profits, nothing wrong with profits. But price gouging profits, yes. And the tactics used that are tried and true by the pharmaceutical industry to extend the life of that monopoly that they get for provided by this congress by making an ever so slight change in the medication itself and claiming that entitles them to extend that patent where you have companies that are charging like 70,000 for a drug. It helps but who can pay that . Who can pay that . And then we see the pharmaceutical industry coming up with very, very skillful ways to appear to be helping like donations to thirdparty foundations that help patients quote, afford. Theyve done an analysis that youre going to see in this report where they very selfconsciously realize that blue sales from them and they make money by making that as an investment. What has happened here is that that temptation that pharma has to use its uninhibited Pricing Power has transformed americas pain into pharmas profit. Thats what happened. And we can address many of the things my colleagues have talked about with regulation and find ways to do things that will help on the margins. But what elijah knew is that the only way to really get fair pricing was to have negotiation. By the way, negotiation is core to a free market economy. A buyer and a seller have a discussion and decide what its worth to the seller and what its worth to the buyer. We are the only buyer to medicare and Medicaid Programs where we dont negotiate. And when you negotiate, you save money. As vermont has done. When elijah and i met with President Trump, and elijah was presenting his price negotiation plan, the president said he was for price negotiation and that pharma was ripping us off. And elijah was hopeful. The president has failed to fulfill his promise. We are here to keep elijahs commitment. Thank you madame chair, i yield back thank you to the gentleman for his hard work and statement. Now i would like to introduce our witnesses. We are grateful to have their testimony and i want to thank the witnesses for being so accommodating with their schedules so that we could have been here together. Our first witness today is mark alice who is the former chairman of the board and ceo of celgene. Celgene sold a cancer drug revlemid and december 20, 2019 and then we will go to doctor Giovanni Caforio who is the chairman of the board , ceo of Bristolmyers Squibb. Bristolmyers squibb has sold revlemid sense 2019. Finally we will hear from after kara schultz who is ceo of teva, teva sell the multiple sclerosis drug accident. The witnesses will be a muted so we can swear them in. The witnesses will rise and raise their right hands. And the witnesses, you swear or affirm that the testimony are about to give is the truth, whole truth, and nothing but the truth. So help you god. Let the record show the witnesses answered in the affirmative. Withoutobjection, your written statements will be made part of the record. And with that mister alice , you are now recognize for your testimony. Chairwoman maloney, Ranking Member comer, thank you for the opportunity to discuss a life extending medicine approved for the treatment of rare and incurable bloodcancers. My name is mark olive and i had the privilege of being out of the researchbased pharmaceutical industry for more than 30 years. Before i joined this industry i served in the marine corps and Marine Corps Reserve and before that i thought junior high school. I triedto bring a value of integrity, service and respect every part of my career. Revlemid was discovered, developed and dropped the patients by my former employer , based on new jersey, it was a global bioPharmaceutical Company that specialized in the discovery, manufacturing and development and delivery of innovative medicines for the treatment of cancer and serious diseases. I joined in 2004 and after serving in different roles in the company i was appointed chief executive offer in 2016 chairman of the board in 2018. My last day was december 2, 2019 after it was acquired by bristolmyers in november 2019. At that time, the company employed more than 8000 people worldwidewith approximately 5600 employees in the United States. One of them was important therapies is marketed as revlemid and its for the treatment of myeloma are rare and incurable blood cancer. Celgene invests over 14 years to invent and develop revlemid in 2005. It is a uniquely did that required an independent developing program and a full fda approval process. Revlemid has become the standard of care for the treatment of myeloma on several large clinical studies have demonstrated significant patient benefits. Since revlemids initial approval the Company Invested several Million Dollars into the research andelements of this medicine the time was acquired , celgene was sponsoring more than 50 additional revlemid clinical studies or patients with different types of cancer as is common for elements, some of these studies were not successful, did not succeed but of the studies were successful and resulted in six additional fda approval including the most recent in2019. Since 2005, more than 700,000 patients have been treated with revlemid worldwide. Celgene pricing for medicines were guided by a set of longheld principles reflected our commitment to patient access, the value of a medicine to patients in the Healthcare System then continuous efforts to discover new medicines and new uses for existing medicines as a need for financial stability. In 2018 the Company Publicly committed to full pricing transparency by limiting pricing for existing no more than once per year and at a level not greater and the center for medicare and Medicaid Services projected increase in the National Health careexpenditures for the year. As an exceptional circumstances. Help ensure patient access, the companies patient support programs provided copays assistance to eligible commercial insured patients and provided free medicine to eligible patients. More than 140,000 people in the United States prescribed a cancer medicine receive some form of assistance. Being offered examples of its medicine to generic manufacturers, so long as those companies critically important Safety Standards. These requirements were established to protect the public on the risk of severe birth defects associated with unknown and suspected timothy of products including revlemid. In fact multiple generic versions are licensed to enter the us market within the next twoyears. Celgene was a Research Driven company which invested heavily in the discovery and development of innovative therapies are now helping to improve the lives of tens of thousands of people worldwide. And in considering legislative changes, i urge congress to maintain many of the strong incentives that currently exist toencourage and support medical innovation. Finally, because my mother died from a neurodegenerative disease, my son lives with insulindependent diabetes. My daughter has autism, and my older brother is being treated for an incurable cancer. All of us are severely impacted by this candidate. This issue matters to me a deeply personal level. I hope and believe these incentives will lead to new treatments that society my family will benefit from today and long after these medicines become genericdrugs. Thank you and i look forward to answering your questions. You very much. And we will now recognize mister mario, you are now recognize. Please unmute. Are you unmute it . You are now recognize. Can you hear me . Yes we can. Chairwoman maloney, Ranking Member comer, thank you for the opportunity to join this important conversation you began my congressman cannons. Cummings, a champion for affordable healthcare and continued by chairwoman maloney this is animportant issue for all americans. Today, advances in medicine are progressing at a remarkable speed. As a physician, im excitedby the sites. Also concerned that without assistance to protect all patients and enable affordable access, we risk disadvantages being out of reach. Many drugs like revlemid highlight these advancements and the challenge that comes along with it. Weve seen it for ordinary gains in patients with multiple myeloma, the blood cancer treated by revlemid area the fiveyear survival has doubled over the past 25 years. Turning what was once a dire diagnosis into a manageable disease for some patients. Revlemid is one of the most significant contributors to this improved survivalrates. We continue to unlock our Scientific Understanding of multiple myeloma. In our Research Today is fueling nextgeneration treatments build on revlemids success and comments. For example, we are now on the task of personalized medicine or multiple myeloma use patients reengineered cells to fight cancer. Bms and celgene have strong records. Both recognize the highest bar and the investment across allindustries. This year alone we expect to invest 10 billion in research. As part of our efforts we are conducting Urgent Research on covid19. Providing 1000 proprietary compounds, examining to medicines for Clinical Trials and enacting a robust philanthropic response. The scientific Investment Groups towards developing it is instructive. The little mind as you may recall was prescribed outside the us without a thorough understanding of side effects. And those cans of thousands of infant deaths and birth defects. Celgene however continues to invest in its research and elements for years. Ultimately, this led to the invention of revlemid. These innovations are immeasurable. Patients should have access to the ability to pay. For this reason we have robust patient assistance programs providing Financial Support to hundreds of thousands of patients. With copay assistance and free medicine worth billions of dollars. That being said, i do recognize that patient assistance programs are an imperfect solution. I welcome the ability to work with you and others to advance Critical Reforms more efficiently deliver care to patients and provide savings to the Healthcare System. We believe in the importance of a healthy generic market and we applaud the administrations success with speeding the approval of generics and congress has passed the three asap. At the same time we must prioritize American Innovation which leads the world in developing near therapies for patients. At bristolmyers we are committed to discovering, developing and delivering innovativemedicines that help patients. In an unprecedented year, our work has never been more critical. You are now recognize, mister schultz. Pleaseunmute. Thank you. Chairwoman maloney, Ranking Member comer and members of the committee, thank you for theopportunity to appear before you today. My name is cara schultz and im the chair of pharmaceutical industries. I understand the committee is interested in the crisis of capacity, or the treatment of multiple sclerosis. But before i discuss action i would like to tell you more about teva and its role in Healthcare Industry area teva is a global Pharmaceutical Company committed to access affordable medicine and benefit from innovations to improve their area we have worked out in israel over 20 years ago and already worldwide with a significant presencein the United States. We are the Global Leader in Affordable Drugs with the industry last four of Generic Medicines and a strong portfolio the medicines including copaxone area on the strength of our generic business, we do our taxes and provide start savings in Healthcare Systems around the world. Bristolmyers squibb. Bristolmyers squibb. The praise of substantial medicines must be the season and cost of Ongoing Research and development. They pay for the drug are approved by the government but you have to expend a lot of resources and have many disappointments before would lead to the market safely. We will continue to invest in new breakthrough treatment to find new ways to extend and expand patient care. Compassion is one of the basic to Innovative Research and patient support. Our significant investment in research and development at commercializing safe and effective treatments lead us to introduce it in the United States in 1996 then its become the first treatment. Since first introducing copaxton and most recently in 2014 introduced a more efficient version of the drug that only needs to be administered three times a week as opposed to daily. This results in more than 300 injection is. Patient a chair. It has been completely comparatively priced based on the value of rings and the research and development for its advancement. The historical price increases of interest to the community all. You can my tenure at kare and it is not increased it since 2017 from over it has declined over the past several years which is expected given our generic entry into the market something we are familiar with as a company. Merely focused on generic drugs. We are dedicated to supporting your patience and improving Patients Experience in all the ways we can. We have spent a significant amount of resources on a program called through shared solutions would provide medical and Financial Assistance to patients. A range of clear resources and Educational Programs for patients in trials. These comprehensive benefits represent substantial cost to the private copaxone including patience. We are committed to be sure they have affordable access. Shared solutions have a team of benefits specialist to help Research PatientsInsurance Benefits so patients are able to receive the most a veritable care off word. The pharmaceutical industry as a whole needs to be mined zero and responsible about medications and understand that each company plays a role in keeping down health care costs. We renew its commitment to continue to provide access to highquality Generic Medicines medicines to create Innovative Solutions for patients and to strive to make health care more accessible unaffordable. We appreciate the continued efforts of the committee to understand the overall value of specific medications and look forward to working with the committee in answering their questions. Thank you very much. I think all of you for your testament recognize myself for five minutes for questions. I want to talk about internal documents a committee obtained as part of our investigation showing that Drug Companies are targeting the United States for their biggest price increases anywhere in the world. They do this in part because federal law currently prohibits the government from negotiating directly with Drug Companies to lower prices on behalf of Medicare Beneficiaries. Mr. Alles id like to start with you. Id like to put up a slide that we obtained from your Company Celgene. Please put the document up and do you have a copy of it now mr. Alles so that you can see it . This is a document that are in the reports that we gave you. This is an internal presentation from october 2018 and it was made to your companys Corporate Market access committee. That is the committee thats responsible for approving your Companies Price increases. Can you see the document mr. Alles . Madam chairwoman they see the document but im looking for a copy of it here in the room. And i have it now. Yes, youve got it okay. This document basically gives your companys view of the world and how much money you can make in Different Countries. I want to ask you about the United States on the bottom left and compare that to the European Union on the top right. If you look at the u. S. Is so; at highly favorable markets with freemarket pricing end quote. Now you say freemarket pricing that the federal government cant negotiate with you to lower prices under medicare. Thats absolutely terrific for your profits and i understand why you think its highly favorable but then if you look at the eu, you say things are only quote manageable end quote and then you highlight quote stagnated price growth end quote as a result of price negotiations. Now you call it stagnated price growth but the rest of us call it negotiating to bring prices down for people, for our patients are at your company loves the u. S. Because you can keep increasing prices here as high as you want and medicare which covers millions of americans isnt allowed to negotiate. In the eu were they do negotiate price increases are in your own words stagnated or not increasing. So here is my question. Isnt it true that for the past decade you targeted the United States for the biggest prices in the biggest price increases be in the entire world . Madam chairwoman thank you for the question. As i looked at this slide it seem to accurately reflect our assessment of the Market Access in the pricing environment in the Different Reasons in the world at that time. I think it also speaks to the United States continues to drive much of the research and development and medical innovation in the world. It also i think describes not as well as id like that there are fundamental differences around the world with economies and countries and the systems. In the end it does highlight the United States is the head of medical innovation and thats a freemarket environment. Since 2000 by the raise the price 22 times. In the 10 years from 2009 to 2018 your Company Reported a 1 billion in net worldwide revenues from this drug alone and 32 billion of that came from the United States. You charge more for this drug here in the u. S. And you make more money from this drug here in the u. S. Than in every other country combined. Let me turn to mr. Schultz. I have an internal document from your company, kare schultz the shows how the executives view the u. S. That they put this document up on the screen produces exhibits 32. This is an internal presentation from september 2016. The top of the slide reads and i quote what does tivo do well in pricing and quote . The first bullet on the slides is quote pricing negotiation strategy, and able to increase prices successfully and underneath that bullet agreed to my quote influenced heavily by u. S. Allowed to hike prices end quote. In below what it says on my quote we apply more frequent price changes once, twice a year and many on a continuous basis. And quote. Let me repeat this. You say we apply more frequent price changes in the u. S. Twice a year and many on a continuous basis. Mr. Schultz this presentation seems clear. You are highlighting or ability to raise prices here in the United States because you are allowed to do so where in other countries you are forced to negotiate prices now for patients and for people. Isnt that right . Madam chairwoman thanks for that question. As you might know i joined teva as ceo on the first of november of 2017 which means i havent seen this document before and im not aware of what happened before a joint. I can assure you since i joined Teva Pharmaceuticals in november 2017 there have been no changes in no price increases to the list price of copaxone and in the same. Make a dramatic reduction in the net pricing that Teva Pharmaceuticals sells the price for further tune of a price adoption 2018 of more than 20 and again in 2019 so thats really what i can comment on. This document clearly shows why we need to pass and sign into law h. R. 3. Chairman cummings was right and President Trump was right. Before he broke his promise and reversed his position. We need to get rid of this ridiculous law that says the government cannot negotiate drug prices. I now recognize mr. Palmer for his question. Before i begin madam chairwoman i would like to say that i do miss the lies and no disrespect to your chairmanship. He was a good man. Thank you. We all miss him. Thank you. If i made reclaim my time. I think its obvious we dont want to do anything to stifle research and innovation that has wrought us literally brought as miracle drugs but i think we are about to see that with the covid19 vaccine. We have got members of congress including mr. Rouda and others mr. Roy and multiple myeloma im happy to hear about i think all of us have stories like that and i think the fact is that we want to encourage innovation and we want to encourage this research that can bring us these miracle drugs but that will do people little good if they cant afford those drugs. One of the things that my polydesk colleague mentioned we have seen pattinson we have seen situations where the patent protections are so short that it seems obvious to me from a business perspective that some of the price hikes are forced upon the company to try to recover their cost because there are billions of dollars invested in the development of the drug and many of these drugs never come to fruition. They never get to market and companies have to take that into account in the pricing but what i want to know is if extending patent protections would be of any value to reducing the cost of drugs. Mr. Alles if you dont mind responding. How do you pronounce that . Celgene. Thank you for the question. I will answer to anything that sounds like my last name. I started to call you mark but thats inappropriate. Go ahead. The question is very complicated but its a critical question. I think if patent reform extended the patent life of a medicine coupled with modernizing these reimbursement access challenges for example tapping the outofpocket costs for Medicare Beneficiaries along with the create active pass at the end of tonight 2019 that did tighten up some of the areas that could have been used to extend the existing patents under existing law that i think there are a combination of both things that could have happened together they would have the opportunity to lower pricing. At celgene we also thought that managing the companies patented medicines where we take took into account the lifetime value of a medicine with its initial approval versus what historically has been the pricing practice which is over time increasing the price in the u. S. To offset failures and offset Clinical Research costs and offset other unexpected or sometimes expected expenses. One finds a different relationship and how to manage price and thats what we did at the beginning of 2018 with their pledge to use medical inflation as a marker for annual price increases. Let me suggest to you and i appreciate the answer, i would like to hear from industry what incentives the federal government took could provide to help address some of these issues of stranded costs and navy extending patents and tax incentives and things like that so we can make sure these drugs are available to people who need them and one of the things that concerns me is a report that came out of england that the british system was denying 20 cancer drugs that included treating Breast Cancer in cancer. We have to address the issue of overregulation particularly with common drugs that should be very inexpensive like insulin and like the epipen where we regulate the Companies Due to shutting down and the production of those drugs left to one or two companies that have a monopoly. Madam chairwoman if you extend my time just a little bit when we start looking at covering drugs through the National Health care system i want is to avoid situations like occurred in oregon and california where you have Barbara Wagner who had treatable cancer at the Oregon Health plan would not cover it and offered to care for hospice of oregon assisted suicide drug and Stephanie Packard 41 years old and mother for children her Insurance Company wouldnt pay for but would pay for the assisted suicide drug and are copay would only be 20. We want to avoid that. We wanted to incentivize companies that do research for that think we ought to have an operation warp speed for cancer drugs madam chairwoman. We have seen an example of how this could work if we get our minds around it and get committed to it and with that i yield back. Thank you. I now recognize ms. Morton norton. You are now recognize for questions. Thank you very much madam chair but i want to thank you for this very important hearing and signaling the importance of this hearing on drug pricing to the American People. I must say the notion of negotiation reminds me of a tort negotiation when i was in law school. The notion that a market system we are debating the notion of negotiations for any market item is very to me. Mr. Alles and mr. Caforio and mr. Salt i want to thank all three of you for joining us today and i want to acknowledge and let you know that i appreciate the innovative work you are doing, the lifesaving drugs that your companies are producing and even as you testify the assistance you are granting of some patients and we understand from the videos that the chair played that there are millions of americans who cannot afford these drugs. Your companies are crucial lifelines which is why i appreciate what you are doing so much. For that reason though every time a Company Raises prices it pushes the lifeline and opportunities for Good Health Even further out of reach. Because i have a limited amount of time im going to have to ask you not to give me an extended reply but to give me a yes or no answer. Im simply trying to establish for the record the answers to the questions i am asking so please abide by the discipline i have given and my time that i must submit you to. I understand your Company Celgene raised the price of redl and more than 20 times when it came to market in 2005 and i also understand that celgene generated 32 million net income from u. S. Sales of the drug between 2009 and 2008 teen and over that same period of time celgenes annual profits have increased from 780 million in 2,924,000,000 in 2018. To these numbers sound correct to you . Yes or no . I would jeff one correction for the record. 32 million would he 32 billion. William, im sorry. Thats fine. I believe the numbers would be correct. I believe they would be. Thank you very much. A monthly course of revlimid a 16,000 the same price it was in 2005. Mr. Caforio after mr. Alles acquired celgene in 2019 you raise the price again. Is that right . Yes congressman we increase the price by 6 in january of this year. Mr. Schultz i understand your company teva has raised the price of copaxone 27 times since bring it to market in 1997 and i also understand the same monthly course of copaxone is seven times more expensive than was in 1997 and since then teva is collected more than 4 million in u. S. Net sales for copaxone. Mr. Schultz to these numbers sound correct to you . I wasnt there at the time but they sound correct to me. Mr. Schultz are you aware that one in four americans taking Prescription Drugs report difficulty in affording their medicine . I am very aware of that and im thankful for providing one out of 10 prescriptions in the United States market. My time is running out. Mr. Caforio area where back . One in four americans taking Prescription Drugs have difficulty affording their medications . Congresswoman im i am aware that in that is way we actively support every patient we can with the patient assistance program. Are you aware of that number mr. Alles that one in four americans taking Prescription Drugs report difficulty affording them . I am aware of that number, yes. Thank you very much and i see my time has expired. Mrs. Foxx you are recognized for questions. Thank you very much miss chairman. My first question for any or all of the witnesses come i understand York Companies are working to develop new treatments, therapies and vaccines to fight the spread of covid19. What country do you expect to deliver the first credible and widely used vaccine for covid19 . Could the witnesses answer please . Thank you congresswoman. Thanks for your question. I know companies around the world are working day and night to develop not only vaccines but also treatment for covid19 and we are cooperating like we have never done before to shorten what is typically 10 to 15 year process to potentially one to two years and we are working 24 7 which is what we do as an industry. As has been said before innovation in our industry happens primarily in the United States. Many of the companies that are working on treatments and vaccines at u. S. Companies a lot of the research is happening in the u. S. But other parts of the world are working on these as well. What i know is whether it is a new medicine or vaccine whenever innovation is made available to patients its available right away. In our country it is sometimes delayed in terms of its access outside of the u. S. We are working to make sure that doesnt happen in the case of covid but im confident we will act similarly to the development of treatments and vaccines for u. S. Patients. Welding now that the United States is the most likely country to develop the first credible vaccine so if one of the other witnesses could say, what are the best incentives for developing these new treatments, therapies and vaccines . Congresswoman this is mark alles. Its very clear that the ability to have flexibility, Financial Flexibility built into the innovation cycle allows for Multinational Companies that dr. Caforio was speaking about to shift those resources when crises occur and certainly covid19 is a crisis. The innovation cycle thats representative of the west mark it does two things. Allows for that shift and it also provides access more often than not to medicines in the United States first. For example one of the indications for revlimid that was available to u. S. Citizens immediately upon approval took 13 years longer to be available to patients in the united kingdom. These structural issues are accompanying some of the developmental issues in the economic challenges of how innovation is rewarded in the United States but not necessarily in the rest of the world. Mr. Schultz let me ask you the next question. The United States has implemented the same drug price controls that many of our european allies have been the last few decades would we be more are less likely to develop a vaccine for covid19 . I would say you would definitely be due to the fact that the financial incentives would be there. One interesting fact which is the problem to access for new medicines all these drugs are available than United States, more than 90 of them. I think if you go to candidates 56 of the recent innovations in cancer medications so there is of course a clear link between financial incentives and motivation to research and development in certain geographies. In the long run 10 or 20 years out most of these drugs will be available all over the world. Thank you very much. I think anybody whos had any experience with capitalism or any kind of her ward system understands that human beings respond better to root boards than to punishment. We have known that for a long time. Thank you all very much an madam chairwoman thank you very much for recognizing me. Thank you. Mr. , he has generally offered to handle the committees work on the floor so we are going to recognize him now so he can go to the floor. Mr. Connolly you are now recognized. I think the chairwoman and i think youre very much for holding this hearing. I do want to specify questioning by taking into the other side of the aisle. You listen to their narrative you would never know that 600 Single Source brandname drugs, not blockbusters and not newly developed drugs with the price between a twoyear period between 2018 and 2020. Youd never know listening to their narrative that longtime drugs 100 years old like insulin, which is not a new drug and not a dime of new rnd of new r d would into it come increased and skyrocketed in price threatening to help of american diabetics in. Diabetics to the tune of millions. You would never know in their rushing to defend ceos against attacks by the side of the aisle apparently that only a few years ago we had marks gorelli at that table the man who bought the company that was sold for a lifesaving drug and gouge the price not because of the need to reinvest or to have a return on investment but a cozy could and he had no conscience and he went to jail. Thats the ceo we want to look at. We want to protect the American Consumer and if my president on the other side of the aisle decided to want to do that i think they are taking a bad step and a bad step and thats what this hearing is about. I commend you madam chairwoman for holding it. Mr. Alles we can put up the grass showing the historical price between europe and the United States. Not that one. On your drug revlimid if im pronouncing it correctly, if we look at that graph when you went to introduce revlimid in europe to cost a little more than it did here in the United States and yet over time a huge divergence occurred so the european price cut a Straight Line but the american price went upandup. And thats because you describe come your company describes this as saying the United States was a free market investment in europe was something else. You make a profit on that drug in your sales in europe or is it a loss . We do make a profit on the drug in the aggregate European Union. Okay, so i guess that capitalism is my friend ms. Foxx was talking about is alive and well in europe that you can make more profit here in the United States because of the free market environment which i think means we dont negotiate that price in a lot of public or grams. Would that be a fair statement . I think in the aggregate congressman what we are seeing is the innovation cycle and the r d that goes into developing it cancer medicine like revlimid worldwide. Im running out of time. Is there a difference in the r d investment in europe . Its the same drug. You can be quite different. He can be run more completely in the United States or more could be happening here than across europe so the r d expenses could be quite different. Smit with respect to that your own forecast means you left modest price increases here in the United States through 2018 dependent on volume and he would stabilize the price by 2019 instead that hell win up to 750. Was that also because of unanticipated r d costs . How could you get that rice. Pill so wrong . Im looking at the document that you are describing and i dont know if we got the estimate of are in the wrong but the opportunity. You got the price of the pill wrong. You got the price of the pill wrong. Thats it pretty big differential especially when it hits the pocketbook of the American Consumer. Would you not agree . I see the difference between european and union in the forecast pricier but i also dont see the increase investment in r d. For example and 2018 approached 5. 7 billion. That difference means for American Consumer dependent on this lifesaving drug can cost more than 16,000 a month and i dont think thats appropriate cost. Its not a bearable cost for most americans and thats the kind of choice at the chairwoman showed us in the heartbreaking videos of American Consumers who are forced with this kind of price escalation to make the terrible choice between controlling their illness or letting it go and have ought not to be the kind of choice and the american faces. I yield back. The chair now recognizes mr. Hice. Thank you matt on their and i want to thank our witnesses for being here today as well and for the difficult task that you have of working through our indian trying to nick a profit while at the same time provide medications not only here in the United States but abroad. I do wish my friends on the other side of the aisle if they were serious about true reform and lowering prices we would be looking at Something Like h. R. 19 instead of pushing Something Like h. R. 3 which we all know would not help lower drug prices and again as i mentioned earlier in my Opening Statement there would be fewer drugs available as a result of h. R. 3 and this is not just me saying words. This is according to the cbo and they confirmed that there would be a loss of cures available on the market. I dont know why bad in any shape, form or fashion is considered to be a good idea. It seems like a poor idea and it seems like its dangerous idea to go down that path. And so for whatever reason some of my friends on the other side say its worth it to lose potential cures in order to to push h. R. 3 through as opposed to h. R. 19 the republican legislation which addresses many of the issues that frankly we are talking about today. Without destroying the market, the freemarket innovation and ability to get drugs through the process and to people who need it. I think eliminating any cure, any care or would ever the disease might e. From alzheimers and the sickle cell and areas cancers in als you name it which one of these diseases with a possible cure that could not come to the market, thats unsatisfactory. We simply cannot go down that path of eliminating any cure for some of these serious diseases. H. R. 9 would have seniors outofpocket costs and would have required Insurance Companies to make information about drug costs available in the Doctors Office and some other things. I want to thank each of the companies who were here today and i know everyone of you are involved in developing treatments and vaccines potentially for covid19. And this again highlights how important investments are that you make and policies that incentivize investment in pharmaceutical innovation is a good thing or thats where we need to be focused and of course right here in the United States no doubt this is the epicenter of research and development for a host of diseases and that includes covid19. Finally i want to acknowledge and thank the administration for the great work that they have done and lowering drug prices. As you can see from the poster behind me there has been drastic decrease in prices and you look at this and by the way this is from the bureau of labor statistics that in june of 201930 u. S. Of the largest single year drop of Prescription Drug prices since 1967. This is great progress in the right direction. The fda approved a Record Number of affordable generic drugs last year for the third consecutive year. That was under this Current Administration. In october of 2017 the fda published a list of rent drugs that are all patent and all exclusivity without any generic competition and they announced that they will review the generics that made it on that product list. In october of 2018 the fda approved 110 generic drugs and tentatively approved 18 more. All of this results in a 26 billiondollar reduction in cost, 26 billion in cost savings and then we have also some executive orders from the president , four of them, to lower the cost of drug prescription prices. This is a huge issue. We are moving in the right direction and again i want to thank our witnesses and these companies for being here. We need to get the on to talk and look at actual action that is taking place to lower Prescription Drug costs and with that madam cherrywood yield yield back. Thank you yield back. Thank you very much. Thank you. Mr. Cooper you are now now recognized and you must turn your video on. Mr. Cooper you are now recognized very at we are having some taking the technical difficulties but i now recognize mr. Raskin. We will go back to mr. Cooper later. Mr. Raskin. By contrast the majority of all the states should be getting a choice. Im not saying [inaudible] we are now having technical problems. We are now going to mrs. Wasserman schultz. You are now recognize. Robin kelly you are now recognized. Thank you madam chairman i thank the committee for bringing us together to discuss drug affordability and i think thats thank all of our witnesses for being willing to testify today. The medications are critical to the patients they serve in the cost could make them unaffordable putting lives at risk. Dr. Krishnamoorthi is your company have any programs or initiatives to help patients afford revlimid and if you expand expanded these programs during covid19 and if not, why not . [inaudible] in you hear me congresswoman . Yes. Thank you for your question. Yes i like to say first of all it is absolutely important and essential for us than any patient that needs one of our medicines has access to it. In answering your questions we have a number of programs to help patients and ill just mention a few examples. There are foundation to provide free medicines to patients that are in need and eligible. These are mostly uninsured or underinsured patients. In one year Bristolmyers Squibb provides approximately 2 billion in free medicine for patients in the u. S. We have 100,000 patients every year. Specifically in 2019 we provided celgene approximately 500 billion worth of Free Products and we also provide a Copay Assistance Program support to patients that have challenges with paying their copay and for revlimid specifically that support was approximately 20 million last year. We did act quickly at the beginning of the covid pandemic because we thought it was really important to do that. We expanded our program and for any u. S. Patient that lost their job or insurance because of covid they are receiving Bristolmyers Squibb for free. Additionally we do make contributions to charitable organizations because we do know that there are patients we cannot help directly and we do make those contributions so that patients can have access to support. We do understand that all of those are solutions that may help some patients when you look at the totality of our program. I believe we have a program that is what we can implement. We would definitely like to do more and i would like to work with the committee to think about policy reforms that can help Companies LikeBristolmyers Squibb and even patents for patients. I know Bristolmyers Squibb has address Health Disparities including a 300 milliondollar investment but with the skyrocketing prices that could exacerbate the same Health Disparities and specifically revlimid could be used to treat multiple myeloma and created milliondollar investment does not erase the the Health Care Disparity issue so what impact have you seen with increasing price and what impact does that have on minorities in particular and dessing creasing the price lead to lax less access of those groups and im not sure if youd track it enough. We begin none i think covid pandemic this year has made it clear to all of us that some communities are disproportionately more impacted. We try to help in many different ways. As i mentioned we expanded our support program said we are able to provide medicines for free to many more patients this year. That includes underserved in our communities and those communities have been impacted more. Many of those are taking advantage . I dont have exactly the statistics yet but we are tracking the utilization of our programs and i would be happy to followup with you. I would love to see that. Thank you. My time is up. Thank you madam chairman. Thank you. Congressman cloud you are now recognize, congressman cloud. Thank you and i appreciate you holding this hearing. This is certainly extremely important to the people we all represent and something we know we need to deal with for quite some time now and the extraordinary increase in drug pricing. Dr. Krishnamoorthi are any of you could speak to those but dr. Iskander this is a hearing on drug pricing. Could you speak to the Pricing System so to speak, the difference between what you price a drug out and what the customer pays and the processor goes through, kind of a brief explanation. Yes, thank you congressman. Id be happy to do it. Let me just start by saying Pricing Systems in the u. S. Are very complex. One of the objectives we shoot at working together is to realign the incentives to make sure we help patients better. We do price our medicines in the u. S. Based on the volume they deliver to patients and Health Care Systems in society and we do take a patients affordability aspect into consideration. The system is complex in the commercial space so for patients that have insurance through their employer of course we work with Insurance Plans and pdms which ensure our products are reversed and often provide significant rebates and discounts. We would like to see those transferred to patients and they often are not. This is an area that is important to us. Of course the focus of today is primarily on the important Government Program medicare across many areas and plans and that managed the program. There is significant competition as well. Im going to break in here for a second because we are running out of time here but basically would you say this is somewhat inaccurate chart of the drug pricing scheme . Congressman its difficult for me to see. The thing that i would note is there are manufactures and pharmacies and we are speaking only to the manufactures today. I would just add just that while there is definitely a lot we need to talk to manufactures about if we are going to come up with a good pricing we are going to have a true discussion we probably need to bring these other elements into the discussion as well. Over the last few years of course we know that the Trump Administration is. The Record Number of generics. They have approved a number and most recently approved three years in a row a Record Number of generics. Did generics generally bring the pricing down for the consumer . Yes congressman. In fact 90 of prescriptions in the u. S. And the other two ceos would agree with that . This has kare schultz and thank you for that question. Generics in definitely bring down the price of medicine and more than 90 of prescription volume in the United States is from generics. One out of 10 prescriptions are generic. The pricing typically drops by somewhere between 60 and 99 after the launch of a generic prescription of a drug. Fresen jump as an executive order dealing with most favored nation status to gauge her pricing on an International Price index and as mr. Hice mission 2019 was the largest drop since 1967. Prescription drug pricing. Its also interesting to me that while we have a chart three out there which again is an attempt to take over this from a government stamp point we have another h. R. 19 which does address the product typing patent ever greening which are issues that would need to be dealt with and certainly i think we all agree its a bipartisan issue that we want to lower drug pricing but as we have seen with the obamacare and Affordable Care act intentions dont necessarily turn into actual policy. When we saw the attempts to get Everybody Health insurance actually lead to extraordinary increases in Health Insurance with actual decrease in actual care. Its extremely important that we make sure that we are equipped to deal with this properly. One question i do have, my apologies chairwoman. Mr. Raskin you are now recognize. Thank you very much madam chairman for calling this important hearing. Mr. Schultz i have questions for you. The prices of your product copaxone have gone way up over the last two decades to more than 10 times what it used to cost. Your profits have been soaring. The executive compensation has increased dramatically and understand your executives are all making four, five or 6 million. What is your salary mr. Schultz . I have a salary which is combined but my basic salary would be 2 million. With your total negotiation package. The ongoing package was in the range of 12 million. 12 million. So i want to ask about we have heard already today inevitably the exorbitant prices that Drug Companies are charging for medication in america are necessary to invest in research and development and ethnic sample cloud cause their constituents 126 a day which is four times what it costs in germany, 33 a day in five times what it cost in the united kingdom, 25 a day in seven times what it cost in russia, 18 a day. Are there any limits on price increases in america which is the only country on earth which doesnt limit drug prices we will stifle innovation and deprive our people of the next year and we take that seriously. Its a sobering answer for people complain about the skywriting price of Prescription Drugs. These are critically important in discovering the next treatment are the next cure for diseases. Our dissemination of your company mr. Schultz reveals they are not investing nearly as much in r d as the American People believe and certainly does that justify the extraordinary high prices are constituents are paying while there is something of a bonanza for the salaries of the executives of the company and so on. Your company has raised the price of those copaxone 2071 times since bringing it to market within two decades ago it and the current price is of 7114 for a monthly course. Has your company ever justified these price increases like landing that copaxone revenues are used to invest in Scientific Research and development . Represented thank you for that question. The way that pharmaceuticals and price let the say up front i was not there at the time you were referring to that i started in 2017 and we have not increased copaxone and in fact we have significantly decreased it. The fact is that your companies talking points that were brought to this committee and page five in the materials show your executives being directing justified price increases for copaxone on exactly this basis quote said the company can invest in research and development that directly translates to increased options for copaxone patients in copaxone patients another was an echo of what we have heard from some of our colleagues today but other documents your company is. Directly contradict those talking points. Take it 2005 25 2015 on r d among all Major Pharmaceutical Companies that i want to put that on the screen medine chair come exhibit 56. And mr. Schultz do you know how much your company has on copaxone r d compared to what is made on copaxone and i understand you are allegedly new to the new to the company. Spec i would know the details of that trades that let me give the details then. Your company has made more than 4 billion, 34 billion from copaxone but the report to the committee is yes then 2 on that for r d expenditures for copaxone patients so in direct opposition to the talking points were hearing today a single r d expenditure that took place after 2015 and yet there have been multiple price increases since 2015. How do you justify that. The patients who saw on the video at the beginning of our hearing that cannot make ends meet or desperate or talking about selling their cars are selling their houses . How can you justify increasing the prices of this desperately needed drugs while thereve been no investment in Scientific Research and development while those price increases are being imposed. I didnt join the company until the end of 2015. So you think it was wrong and have youve been brought in to clean house . I broaden to address the companys financial troubles for a number of reasons one of them being the associate price decline and that the one being an nature test to restructure the company and reduced costs of the company could honor its commitments. The gentlemans time has expired. That im chair this is precisely why we need to get the government and medicare the power to negotiate for lower drug prices because their patients are getting ripped off and i yelled back. I agree. Thank you for holding this hearing. One thing is you hear both sides discussed the problems we face with high drug costs. Heres what we agree on. Miracle drugs to cure cancer, cure a lot of the illnesses we have our no good if our patients can afford it. Secondly i agree that price of insulin as an example which has been around for 100 years or more doesnt require any research and development that ought to be stopped and the difference it think in my friends on the other side of the aisle, and they look tube government. Lets let the government get involved. On our site youve heard a lot of different testimony about h. R. 19. Lets look at the one thing that helps the Great American system thrive, is the competition that would bring down pricing. I would ask my friends and the other side about h. R. 19, take a look at it. The fact that of pharmacy benefit managers and how it affects the drug prices. Anybody. Congressman, thank you im happy to provide my perspective. First of all let me say i mentioned earlier the Pricing System is really complex, i do agree with you that our objective is that every patient that needs one of our medicines has access to it. I agree with you, at an affordable price, every patient needed but if you cannot afford it, what good is the drug. I agree with you, thats why we do everything that we can to help patients with the ability programs to be able to afford their medicines, we would like to be able to do more and to provide patients with medicare, copay assistance and it would be extremely helpful for patients that are struggling to afford outofpocket costs, we also support majors such as introducing outofpocket which bid the really helpful to some of the patients that are struggling with her medicines, specifically to your question on pbms, pbm plays an important role, at the same time, our concern is a significant rebates and discounts that the industry provides for some medicines in order to have formula listing, dont make their way to patients at the pharmacy counter, our perspective, patients should be benefiting from those rebates and discounts in their industry would be supported a reform that looks at that anomaly and realigns its incentives so the discounts we provide can make a real difference in terms of affordability for patients. I ask your company lead the way, get us a blueprint, just what you said where patients can afford drugs as an example, insulin is unaffordable for so many families, how much you lead the way from that, let me hear from the other witnesses. Thank you for that congressman, pbms play a significant role in the consolidate and negotiate on behalf of medicare plans and other customers that they are taking care of the patients im sure under those schemes and a lifetime of a product, the rebates typically increase as time goes on and to see the rebate label somewhere between 25 65 and of course now a lot of patients and therefore there has been a lot of debate and how its been supporting the rebate structure could be more transparent. Transparent. Iran out of time, transparency, help us do that and see what pbms negotiate and what they charge the groups that they are selling products too, help us to have more transparency to that. I yield back. Mr. Toomey you are not recognized. Thank you very much madam chair, particularly thank you for holding this hearing, five months ago i was reelected again to fill the seat that was previously held by my dear friend of 42 years congressman Elijah Cummings, i appreciate the comments that i heard earlier with respect to those of you who served with him and miss him like we all do, congressman cummings represented maryland seventh Congressional District for 23 years, throughout his time in congress he championed a lot of things but month under nothing more dedicated than this effort to lower cost of Prescription Drugs, and fact on march the eighth 2017 congressman cummings went to the white house to meet with President Trump about this and to talk about a key piece of legislation that we are talking about that would give the federal government the authority to do a number of things and to drive down the price of progress enter Prescription Drug, that legislation would guarantee price production on what was then and what continues to be now soaring prices of these drugs, according to his own statement following the meeting that day, chairman cummings said president seemed enthusiastic about the idea and pledged to Work Together to pass the legislation, but despite numerous goodfaith efforts by chairman cummings to followup, President Trump never responded, he abandoned his commitment to work jointly and he instead issues a statement saying if the bill were presented today in its current form, he would in fact veto it. In many respects, we are here today because President Trump failed to fulfill his promise as a result, seniors and retirees and others continue to face immeasurable suffering, simply because they cannot afford to buy a pill or take a shot, their pain and their suffering cannot be quantified but to collect the cost of the green of big pharma can be calculated, take for example the Pharmaceutical Company of which we heard from today and their ceo, a drug as we all know and has been mentioned and used effectively to treat multiple sclerosis, since 1997 they have raised the price of the drug 27 times, 27 times two is current price of 5800 a month, that is nearly seven times more expensive when it was first introduced, between 2002 in 2016, the net sales increased from 411 million to 3. 3 billion, mr. Scholz, i would like to start with you and i know were challenged by time and all limited, the good thing that this hearing will go on for a while, its my understanding, that they negotiate directly with government payer players like veterans affairs, is that correct. That is correct sir. Its also my understanding that they do not directly interact with or negotiate with medicare, is that correct. We do negotiate with medicare plans, the way it works we negotiate the medicare plans which would be by an Insurance Company, not by regular medicare but by an insurance provider. That is indirectly, if they negotiated directly which is what im asking, with that in your opinion lower the cost of the process . Thats a very complex question, the reason why it could go is the circumstances and how many competitors, how many medications in all likelihood the answer probably would be yes, i think you would agree with that, otherwise why even enter into negotiations . Lets talk about 2013, the average year of net cost, the discounts that the va paid was 2019, do you know the average paid that same year for medicare for the drugs. No i do not know that. It was 4200, twice as much thats quite a difference in a drug or due to different agencies in a government civil because the government prohibits one of the agencies from not negotiating out all, my time has just about expired, can you give us in your opinion since you been with the company for the last 30 or 36 months, what you suggest we do at this particular point in time as a legislative body, what do you suggest since the hands are tied if we need the drug. The gentlemans time is expired, mr. Scholz may answer the question. Thank you very much chairwoman, i will give you two different answers into parts to your question, the first part what you suggest that could be done to the Healthcare System, this is a very difficult and complex system which is a huge organism as we saw, may be different players being parted, important to secure innovation and access we can all agree to that but i think its important to try and make the system slightly complicated because its very difficult even for pharmaceutical manufacture to see through the system and understand what is happening in one of the reasons more access and dire negotiation and that the va is also because there is a simple model and we will have exposes and just like if you go next door with thousands people at a time a cheaper price than if you buy one at a time, the whole complexity of the system as a part of the cost with the Healthcare System. The other, im sorry have to repeat myself but the price has collapsed and we used it for pharmaceutical has collapsed and the reason why they have been into a job is because weve been lowering the price of compacted and they are in a company in the end of 2017 i dont know that i have any time here but you use the word collapsed after you raise the drug price 27 times, did it collapse by 2 , that a real collapse . I think we ought to be careful with the way that we use wording and to suggest to the American Public after you raise the price 27 times that it collapsed is a little bit misleading. Mr. Keller you are recognized for questions. Thank you, madam chair, americans pay too much for their healthcare and the rising cost of Prescription Drugs needs to be addressed through bipartisan cooperation, now more than ever we need to ensure that patients especially those with preexisting conditions have access to affordable existing drugs, having traveled around northeastern in North Central pennsylvania meeting with patients, hospital administrators and medical professionals who have repeatedly told me among other things that the best way to tackle the issue is to address patient reform and get generics to market faster and pursue plot enterprise transparency so consumers know the true cost of their medication and incentivize innovation to help find new cures. There has been some discussion today around hr three, a partisan government centric approach that would allow the government with force in the entry negotiation and less innovation in the pharmaceutical drug market and ignoring the good bipartisan work done on this issue that would make significant progress toward lowering drug prices, hr 19, the lower cost, more cares act introduced by energy in Congress Member walden would improve Price Transparency so patients can have access to more information and shop the marketplace of a true consumer, get generics to market faster and encourage innovation instead of stifling as hr three does. I do have a question for Doctor Company fo,some of my colleagueo be toward socialized medicine, can you speak to the effects of socialized medicine on the pursuit of social innovation and other drugs to treat cancer. Your microphone is on mu. Congressman can you hear me, thanks for my question, im a physician by training, i was trained in europe, and the opportunity to go to multiple countries and ive been in the u. S. For most of my career and i had experiences with multiple Healthcare Systems around the world and access to new medicines for patients as a number one priority. I want to emphasize when we develop and introduce a new cancer medicine in the United States, that is available to bases immediately, we need to work to make sure its affordable to the patient that are struggling today, i do have experience with countries where there is a significant delay with new patients getting access to medicines, i tell you one of my experiences is a multiple myeloma were innovated cancer medicines have increased the survival of patients with multiple myeloma after five years, from 10 to 50 in the last ten years, i do know the medicines that are responsible for this improvement are still not available in more than one country, i think our objective should be to address the challenges that exist with affordability of medicines in the u. S. And we must be working together to make sure no patient has experienced that we heard earlier, it is absolutely essential that we continue the reward innovation and that we are able to provide a new medicine when it is available to every patient immediately. Thank you, i appreciate that, i heard several times during the hearing this morning that the Pricing System in the United States is very complex and my colleague from texas, representative cloud had a chart that said many different parts of the system from manufacturers to the ppms and so one, the people i see in the room today, you are just one part of the entire system for manufacturing and the drugs are producing to get it to the patients, none of the witnesses, none of the Witnesses Today have any other role than being the manufacturer of the drugs, is that correct . That is correct. I would think if we have a complex system and there are many parts to it, if we really wanted to get down to make sure the drug was produced and delivered to the patient in a costeffective way so that it was affordable instead of having one part of the supply chain in the room today, the committee and the majority wouldve invited everybody in the supply chain to make sure we could come up with a solution that would benefit and get toward a real solution rather than the messaging. I yield back. The gentlemans time is expired the chair recognizes scholz, your record is for questions. Thank you, madam chair, encouraging generic competition is crucial to ensuring brandname drugs are more affordable, some Drug Companies have resorted to exploited taxe can you turn your video on so we can see you, by law we have to have your video on as you speak. My video is on, at least on my end my video is, can you see me now. Yes we can see you now. Let me begin again, encouraging competition is crucial to ensuring brandname drugs become more affordable, some Drug Companies have gone to competition which in turn for patient and i have to ask you a few questions as it relates to the therapy treatment, as a Breast Cancer survivor, the Cancer Treatment is very personal to me, the Mitigation Strategy is an fda required program ensures high rates drugs will be used safely, and im for sure you are familiar and they have applications for fda. Is that right . Fda requires to implement a Safety Program due to its risk by pregnant women, as a mother of three, this is something i certainly appreciate and i think its important that this is for intended purpose, this was not supposed to protect patient safety. That is the goal of the program. And do they also view the program as a way to delay generic. We do not, as i said in my prepared testimony, we would sell samples of our products to generics, once they agreed to our Safety Standards and identification process. Lets take a look at the slide from the presentation about the rams program, this is exhibit 11. The second key discussion point, it is used as a program as useful for prevention of generic, prevention just means to delay generic competition, this is no other way to read that, i will ask you again, he uses the program to prevent competition, yes, sir no and youre looking at a document whose definition with prevention was seem to be exactly that. I see the slide and i understand some of the words but i dont know the context on what i can say, the generic manufacturing would need to replicate the exact same standard in the branded version of the roves program, as long as the generic with the abbreviated application would in fact meet this same and according to the fda, the 14 generic manufacturers to obtain fda approval and the samples were provided, and expert analysis made a delay with consumers of 637 million, who knows how many patients are rationing the medication because of the competitors and twice as high will be there by competitive taxes, is it also true that those who tried, it tried to obtain additional pattern on the rams program itself. I will begin with the second question, in fact and pursuant to statute and regulations, a patent on the rams program that we created, with the fda from a safe distribution of medicine that you know, one does in a pregnant female would lead to severe birth defects. We did patent that pursuant to the regulation is. The fda, it specifically said that they did not think providing samples to generic manufacturers would be a safety concern and very clearly in the companys own presentation define generic encroachment as an eagle, anyone with common sense understand the generic encroachment that you are trying to block other Generic Companies from being able to get access to develop the drug, thankfully congress has created an address any appropriate uses it of Safety Program, this example demonstrates how Drug Companies will continue to exploit and unless Congress Acts to closing, regardless of what the strategies and the cost of medication, that is exactly what your policy and your company has followed and allowed, its unacceptable, and its offended as a cancer survivor and i strongly suggest that you take back your company and the things that i come to light and rethink the way that you handle the process of approving generic and editors to access the materials that they need for Prescription Drug. Thank you monitor i yield back. Can you hear me, first of all doctor, when did they sell. In november. 2000 when . 19, last year, what was the list price with the acquisition. I do not have that in front of me, i know we provided it and it has been mentioned before in the hearing, i am happy to give you the information and list. Did the price increase traumatically in january of 2020. In january 2020 we looked at the price of all of our medicine and the investment in the area and relevant to increasing the price by 6 . Thats all, 6 . 6 yes. In the remaining price increases year. That was the one price increase, our practice has been since 2018 to limit price increases to all the medicines where we have active and significant Clinical Research programs ongoing and remitted to 6 , when you look at the next price of our total portfolio in the u. S. Since 2018, it has been flat. Mr. Schulte have a question for you, as i understand it, we entered into an agreement with amgen which is a pay for delay contract, is that accurate . I really would not know if it happened, it mustve happened way before i joined the company. I am sorry, was there a payment to delay the introduction of a generic . I am not aware of that but its an allegation, i dont know anything about it. You dont know for sure whether there was such an agreement or not . No, i am sorry i do not. Thats all most incredible but okay. I will come back, is there generic competition on the market . Congressman, there is not, it is still protected until 2027 so its considered not expired and the pattern expired beginning in 2027. What i can tell you is that they were reasserted last year by the Patent Office which denied the review because of the strength and they protect important innovation surrounding the invention and development there will be generics in the next few years beginning in 2022. Some critics have said that its essentially the same as a drug called polygamy, can you tell us is this essentially the same or not. Congressman that is not my understanding, its completely different medicine that is developed with a 14 year program that is not synthesizing hundreds of compounds, belongs to the same class as other medicines as it always happens in our industry, every new medicine is developed as a new medicine and is a different safety profile in a different efficacy profile, it has clearly advanced with the treatment of multiple myeloma, it is an independent medicine. I will give you a more broad question before iran out of time, right now it seems to me from what we see on the internet that the United States per capita, we pay 50 more for pharmaceutical in canada, japan and germany, and about twice as much as italy and ireland and what do you attribute, its a dramatic difference. Congressman, the difference comes from the fact that innovation is recognized and awardwinning in the United States, this is the reason why the innovation based industry primarily a u. S. Industry and much of the research that we do takes place in the u. S. , medicines are available to many patients in the u. S. , i tell you in the case that its almost 10 billion a year with the u. S. Company in research and development and there are 13000 dedicated scientist that work at the company and the innovation for us is really important in order to continue, we are discussing multiple were ends meet in a big difference for patients at the same time in the next three years, we will invest more than 2 billion in the development of the next generation of medicines, some of them represent extraordinarily innovation, the reason why we can do that is because we have a system that will reward innovation in that system is one that we should Work Together on. The gentlemans time is expired. I now recognize thank you, madam chair, can you hear me. We can hear you and we conceal. Thank you, thank you for the hearing, i want to echo those who indicated and sorely missed chairmans comings on this issue, he was a bulldog in the president talked a good game and he talked about how he was going to take on the pharmaceutical industry but in the end with weak kneed and he came to the industry and we know Elijah Cummings window does not in an argument articulated today by these companies which is the pharmacy benefit managers and they are the ones responsible for the rising drug prices and i know that they had to follow pricing as well and the pharmaceutical companies in the pbms and other players in broad conspiracy and push the blame onto the pbms of the pharmaceutical companies, mr. Alice, and 2009 the average net price meaning the price after removing the discounts and rebates was 294 and in 2014 it was 396 and in 2018 it was 598. So youre not price more than doubled in just that. In time, is it fair to say that the price increase at a faster rate than any discount or rebate with pbms or others in the supply chain. Can you hear me congressman. Yes, thank you, i dont have the numbers but i trust the numbers that you provided are accurate and it would represent a rapid increase in the price you described, its unique molecule as you heard from doctor before you in the treatment of rare blood cancers and in the marketplace the use of discounting or other contracts or other pbms was really not required, is a specialty cancer drug for the orphan disease which affects on average about 50000 patients a year in the United States, the incidence of new cases of about 25 30000 year, its very much one of those products that is available in medical hematologist will describe it as we described distributed through specialty pharmacies, theres not a complexity other than the Risk Management program that you see with other products. In that case, youre not really using the rebate were pbm or other mechanics or an excuse for why the price had skyrocketed in more than tripled between 2005 and 2019, that is what we saw in terms of the price hike. That really falls on the company, you are in a position to having to explain why there is such a significant increase their im going to run out of time here, they have provided significant rebates for your drug, is that correct. That is correct. But even with the rebates, the competition into the picture in the net price began after rebates and discounts increased by more than 75 in just eight years, is that right. Im not really aware of that. If it is the case and i just want to gradually you on being able to answer from my estimate about 50 of the questions by saying you were not there, i understand that you appreciate that but it wouldve been nice to come equipped a little bit better with what the situation was in the company to respect to these drugs prior to entering their because in some ways they have a responsibility to have a historical perspective, and anyways in any event, the net price jumped from 22 14, 214 and from 2009 it went down to 3113 and we discussed on the generic option when it came in, pbm has had some role on a pricing and i dont cut them off the hook but the Pharmaceutical Company are still a major culprit when it comes to the price gouging and thats why were bringing this attention to your activity and with that i yield back. The gentlemans time has expired, mr. Higgins you are now recognize for questions. Thank you, madam chair, thinking for holding todays hearing, it affects everyone in the country, we are hearing today from the colleagues that it is a solution to the issue of the high drug cost is, i have issues with hr three, hr three would result in a huge expansion government control over Patient Healthcare that would result in fewer less access for americans, drugs and treatments that we were generally worried about this issue and we work on compromise legislation that would have a chance of making it to the president s desk rather than messaging bills that never had a chance to get consideration by the senate and 0 bipartisan input and some very unconstitutional anguish in my opinion, without being said we must recognize as a nation that is part of a legitimate narrative across the country that citizens that i serve, we have genuine complaints about the price of pharmaceuticals, you gentlemen that appear on the stand today have to answer some difficult but legitimate questions, the introduction of generic drugs, im gonna ask, regarding generic drugs, the introduction into the marketplace, and generally produces positive economic for consumers, would you have least have the essence of that statement, would you agree with that. Congressman, i completely agree, in the interest of time, and its understood across the board, when generic drugs are introduced into the marketplace and needed pharmaceuticals become more affordable for regular americans, this is the cornerstone of our concern and why were here today, you have stated in response to another colleague whose questions in the note that you mention that the drugs that you introduced are unique they are each unique and generally but would you please address the companies to make very small changes in the formula in the drug and expend the. And delay the generic drugs were market that slightly changed rx formula through the Insurance Companies and through the Management System that exist, talk to us about the change of the formula of the drug and why should that stop a generic drug from being introduced, to me that is gaming the system. Thank you, congressman, let me start by saying that, our policy is meaningful innovation, it reflects meaningful and important innovation, in many cases it is about new diseases, treatments and in some cases its about new dosing, the use of different Manufacturing Technologies but our approach mr. Patton meaningful which is been beneficial for patient. You say meaningful innovation in the formula of an existing drug that is approaching the exploration and the protection and you are looking at the introduction of generics drug with the same formula, would you say meaningful change in the formula that is not recognized across the board by the medical field and by doctors, the doctors say it is a meaningful change, how is it that the board of directors in the Pharmaceutical Company would determine, explain to us what you mean by meaningful change. I believe for more pharmaceutical products which we introduce, we are just the beginning of the development that last for many years and the way that we think about meaningful changes are changes that are recognized innovation and innovation that is their protected, when we think about the entire period in which we invest in medicine and we do that in the complex in which we recognize the focus of generics and in fact that 90 are generics in the u. S. , it allows us to be able to continue to have room for innovation, i think that the system is designed in order to protect innovation that is meaningful by us and is determined by the office and that grants us in the objective is to protect. The gentlemans time is expired. Mr. Welsh you are recognized for questions. Thank you, madam chair, i think one of the reasons a lot of us are focusing on the concentration in the model of the higher prices and higher profit and higher bonuses and is not just about the individuals that are making significant amount of money, the executives, its a significant burden on taxpayers and the companies that are purchasing with employee sponsored health care, i want to ask a little bit about that, first of all, doctor between 2006 and 2017, according to the Committee Report the executives were paid 400 million, can you address that . Congressman, we required in 2019, im not familiar in the past compensation. Thats in the report, first my question does that in any way seemed like a little on the high side to you. Congressman i cannot comment on those figures, i am not familiar with them, i do not know. It is in the report, assuming the report is correct im asking your opinion about whether the amount of compensation, 400 million is on the high si side. Congressman i have received a report a few minutes for the beginning of the hearing and i dont know, that wouldve been a decision of the board im not familiar with the topic. I am telling you first of all what is in the report, it is 400 million during that period of time, executive pay between 2012 and 2017 was 119 million, sales of your product have increased as a result of the Medicare Part d program, corre correct. It is increased for a number of reasons in the number of indications and if used for. You used for Medicare Part d, benefit to seniors and it enables them to the government to purchase that product, correct. Absolutely. The price of one pill is about 719, is that correct. I am sure that is correct. Let me go to mr. Alice, is it true that they raise the price 23 times after it was brought to market in 2005 including as many as three times in one year. I will agree that the price has gone up in the 20 time range, i dont have the number in front of me but specific to 2017, i do recall there was three price increases that year. And doctor the first time they increase the price after begin correct . Would you unmute yourself and answer the question. Thank you, im sorry but it appears that i need to be unmuted, yes we did increase the price at the beginning of 2020. You know how much they benefited after they increase prices. Yes and i know it can be significant. It is 15000 a year end the average beneficiary probably gets Social Security for about 22 or 23000, do you know how much it cost the federal government through Medicare Part d. I know congressman that it is a widely used medicine. It is 4 billion. I really dont understand why you know these numbers, these are the numbers that come down to the individual patient who cannot afford the outofpocket even with the help of Medicare Part d, did celgene provide discounts for part d for rev yes. I dont know that we have any of the information, we do provide the contracted price reduction information to this committee. If they were statutory discounts we provided them and we did not discount through commercial plans widely but we will follow up with any of the information, i do not have it with me today. Has Bristol Myers began providing any discount since it acquires celgene. We have continued to provide all statutes to the discount. I want to go back to the executive pay, ultimately that is paid for by taxpayers, employers and by individual patients, do you have any reservations about 100 million being paid to six executives over two years. The gentleman may answer his question. Congressman with respect to the compensation of what i can tell you to bristolmyers, im grateful to be compensated in the decisions about our compensations are made by our directors and our executives or any employee and there really structured in a way that looks at compensation across our industry and other industries and creates the condition for us to attract the gentlemans time is expired, you are now recognized and you may go over for as much time as you need. Thank you, madam chair, i dont believe we can have a credible hearing on unsustainable drug prices without mentioning pbms, pbms are unnecessary levels of bureaucracy, according to every independent pharmacy in my Congressional District have no rhyme or reason for the bills that they sent to the pharmaci pharmacies, i think that is something that this committee needs to look into and i hope madam chair moving forward thats an area where we can have bipartisan agreement and exploring what role that they play in unsustainable drug prices. But we are talking about drug prices and its a concern for all of our constituents regardless of who we represent but are constituents also allow new treatments and cures being developed, todays witnesses represent two sides of this debate, the large manufacture of generics and is one of the largest brandname manufacturers, i would like to ask the same question, how do we balance these two objectives, doctor, representing bristolmyers, you can go first. Thank you, congressman, i think balancing the two objectives and continuing to invest in research and development in bringing new treatments with the need to ensure the medicine is affordable, i would say the most important, i do agree that our system requires change and i know bristolmyers is leading in the industry and its really open to working with this committee with congress and the administration to find ways involving our system to begin less complex and help patients more, it is possible to find the balance and there is some measures we can take immediately, allowing companies to provide their patients with support, financial further copay and it would be helpful to patients and it can be done very rapidly, similarly introducing pocket cap and medicare that will alleviate a lot of the burden that exist today inpatient and ultimately we need to Work Together to think about home system accounts for the speed in which innovations happen. Mr. Schultz from a generic manufacturer standpoint, how would you answer that. I would like to give a broad answer, i think the system a sickly works well and from the fact that most of the innovations that politics plays in the United States and a lot of new medication has been introduced over the last 40 years due to the system, of course the system basically rewards innovation by granting patents which means for a period of time the pricing is not the normal competition where everybody can destroy, the reason why that is necessary, less than one out of a hundred projects actually make it through to the marketplace, unless they feel and that means that risk that nobody would take and everybody would be comforting, the basic idea, it works extremely well and been seen by the many and the prolonged life with the picture of americans over 40 years which is partly due to bigger pharmaceuticals, that being said of course you cannot keep on getting that benefit of a patent which gives you a situation when you launch this product that you develop over 15 20 years, the hudson stop at a certain point of time and prices have to come down dramatically, im happy to report that in the generic industry, it provides highquality medication based on the initial rations and it provides products at a high quality at a fraction of the price and when i talk about dramatic price reduction, that is the case, most of the generics in the United States they probably had a price which is less than 10 of the price, the price drop of more than 90 is substantial, after earlier today the total pricing is spending time in the United States, that the combination of competition on innovative drugs and also competition from generic drugs, every time a new drug because it has its benefits but the benefits have to be seen in the relationship to the pricing and therefore the present as a part of balancing let me ask you this, were running on oclock and im gone over a little bit. What is an adequate amount of time for brandname company to invent and get to patent on a new drug, what is an adequate amount of time in your opinion for the patent to exist before generic manufacturers can come in there, recognizing the fact that obviously the brandname company spend a lot of money on research and development, weve all gone over that but from your standpoint, whats an adequate amount of time before the generics can come in in the marketplace. I think the Current Administration in the United States with a fair amount of time in the original patent, they have created innovation, i think the issue is sometimes im not seen in any way the today whatever they would do that but some companies have conceived to make a lot of patent which are not that substantial, they had to be challenged as part of the generic business model, we had to challenge the patents that are not living up to the innovation and it should be in a patent and those patents are turned down in the generics are launched, you could argue that somehow it is not the original patent but sometimes the many surrounding the patents that do not have innovation that they also have, that is maybe something that could be looked at more and you get so many patents around the product and it delays a generic competition. Thank you, madam chair, my time is expired and i look forward to working with these issues moving forward and i certainly hope that we can examine the pbms and every other factor that contributes to skyrocketing drug prices for our constituents. I look forward to working with you, youre not recognized for questions. Think about them. Thank you for hosting this hearing and two or three panelists. Let me start off by saying, what you do is remarkable, you are saving lives with the innovative drugs, 50000 americans who have blood cancers that can assist is remarkable. But heres the issue, as the president often says, who is a sucker here, the United States is the biggest spender, the government of the United States is the biggest spender of drugs, we are at 44 in the number of years we will be at 47 . The taxpayers are picking up the tab for all of the expenditures of drugs in this country. Say are we just suckers . You have a remarkable drug. But the price increases have the wonder drug out of the reach of most americans. And has gone from 215 a pill to a price today of 763 per pill. The price monthly was 245 you know the price of the monthly courses today . I believe it is in the 16000dollar range we heard that number today. So why did you raise the price by more than 250 percent over the last 15 years . I think i am you did. We can hear you. Specifically why did you increase the price 215 percent from 2009 over the course of 15 years. It became a very important portfolio that includes products treating pancreatic cancer, Breast Cancer, lung cancer, different forms of blood cancers and inflammatory diseases so about 35 percent of that revenue and the price increase that accompanied that revenue was reinvested into research and development that produce some of the most important cancer medicines we have not talked about today. Reclaiming my time. You receive remarkable compensation the last two years you were the president or ceo of celgene. You and six or five of your colleagues received upwards of 400 million. Why are the taxpayers of this country picking up the tab for those extraordinary salaries on top of picking up the tab increasing the drug that went up 215 percent so you can fund other drugs . At some point the federal government cannot be the ultimate sucker. With respect to teethree the success is the revenue that pays for the innovation across a number of years of development. As my colleagues spoke to the compensation packages are arrived at through a Competitive Analysis and the independent board of directors so discover drugs like teethree we need a competitive Compensation Plan to stay competitive. I think my time is expired can ask another question . I want to know what each of you are willing to do to bring down the cost of drugs to the us taxpayer. I think the discussion today shows that all stakeholders the Insurance Agency and of course all of you need to come together to find as an objective and the outcome of legislation how to cap outofpocket costs for patients and beneficiary so they have the predictability and the affordability we all want. The way to do that is for industry along with the Insurance Industry to come together with congress to Work Together on that goal to pay for that requires a lot of giveandtake but thats the goal of hr 19 to help the American Consumer and american taxpayer. I would like to commit to two things first of all working with the community but specifically i am supporting and mentioned before a company like ours to provide Financial Assistance for patients in medicare to support them with the copay and outofpocket exposure i am supportive of working on this establishment for many here as well. I yield back. So we would be committed in the future and we committed to be committed the number one thing is to ensure that by developing and launching generics and also with increasing transparency with medicaid or medicare or managed care. Thank you. You are now recognized. Thank you madam chair. I will address my question that in july 201821 celgene announced a policy with the price increase is limited to no more than once a year at a level no greater then medicaid Medicaid Services projected increase with the National Health expenditures of the year. So my question doctor, and the beginning of this year bristolmyers raised the list price teethree revlimid at 763 per pill. And in that association of 2020 was five. Four so it appears you already failed to meet that part of celgenes pricing structure. Can Bristolmyers Squibb be committed to not take any further price increases for teethree revlimid this year . Congresswoman we are not taking it will not take additional price increases for revlimid this year the practice is to look at a number of factors to keep it at a maximum of 6 percent and only those that are active in the Development Program and with the total portfolio but that has been flat. So my questions to my colleagues to you also do we need to put regulations on r d because thats the invisible line of what you decide is r d and we are trying to protect the American Public because a drug that is not changing how you increasing r d when it has been approved, trials have been done and you are selling it so where is the r d increase . So will you commit today to stop raising the price moving forward of her of limited revlimid . There are two parts. First of all when a medicine is first introduced it is often at the beginning of the research and Development Project we heard today it was approved for three indications of a different disease. With our research happening further we discovered the other you indication it was approved last year. So most importantly the research and Development Expense we have in the investments we make and 90 percent of what we work on will not work. So when we think about the choices and research in government and investments were made as i mentioned earlier we are currently investigating 13 new medicines that revlimid has accomplished to take one step further than we have plans to invest over 2 billion in new medicines. That is our strategy. This is where the confusion comes in if you are testing other medicines you charge the r d to that so how does that r d cost get pushed onto revlimid . What i need to know is will this continuously keep moving up increasing cost or do you implement another drug . You will tack on to that drug the r d cost so it seems like you are double dipping that support them so frustrated with. Yes im happy to provide my perspective. What i know of the new medicines that i described it may not work and will never be approved by the fda. Your time is expired you may answer the question by your time is expired. Does that mean the drug you are testing that failed you put that on an existing drug to cover the cost of that . Is that what you say . We put our total investment in r d and then the total portfolio of medicines in our objective is to have a system for the investments we make to recognize thats the way the industry works and how we fund the r d cost. We need change madam chair. Thank you. Mr. Gomez you are now recognized. Thank you madam chair i want to go back to the issue i think everybody recognizes the development of a new formulation of the existing drug can improve existing patient outcomes. We have seen new versions of the same drug to extend that monopoly. He is not considered a liberal by any stretch of the imagination and also a cheap focus that was one of the eight negotiators negotiating with the white house and then illuminating that Market Exclusivity biologics that wouldve enshrined those prices into perpetuity we turned into one of the most progressive deals in the history of this country and 385 republicans and democrats 85 ten so this is a big issue we went to ask mr. Schultz a few questions about the decision to develop a 40milligram version that was unlike the original taken daily the other was taken three times a week without 40 milligrams version study show its no different between the daily 20 milligrams dose or the daily 40 milligrams dose. Is that correct . That was way before my time. Actually that is a yes or no question and it is yes because you issued a press release. After these findings of 40 milligrams dose should be taken three times a week but the documents reviewed that suggest many of the own scientist opposed this research. One research and Development Division voted strongly against the study saying there was no scientific rationale for the value this is in your material the same scientist noticed that there is no change what they aware that that they were aware of and were concerned that such a study didnt have a value so the lifecycle on the business side of the company. Im not aware of the situation. Im not asking about that but the lifecycle on the business side of your company . Not necessarily. But is not what you are referring to. We will get you to that exhibit as well those that have extension with exhibit 15 we get that once a year as well and with that 40 milligrams dose to have a monopoly on the market they provided no scientific benefit only because it is more convenient than the 20 milligrams dose. The nuts and the own testimony. And despite researching the efficacy of the 40milligram jugs one drugs one per week more convenient. Thats how it goes. Earlier you said through innovation you believe meaningful innovation when there is no scientific improvement and to do that three times a week . Honestly i dont know. I take back my time. And then telling the then to take two injections rather than the 40 milligrams. I am saying i was not aware thats i wont bother asking him. So all you are doing is trying to find a way to extend the protection of a particular drug. And just to improve the outcome for the bottom line for the longterm. Even scientist said dont do it. Because it doesnt improve the outcome if you had more of a choice to make it more convenient you would make it once a week injection that is more convenient than three times daily. Thats a problem nobody believes the fact you try to improve the outcomes for patients. They believe you try to improve your bottom line not only you undermining your own business but americans confidence of a particular drug for it to be beneficial. Your time is expired but you may respond if anyone would like to respond to his question. I will give a Quick Response so to develop a lot of medications in the space for many of these have to be injected over the course of 30 years that development does not come cheap but then we have to reconstitute that you have to inject themselves with a syringe once or twice or three times a day. It is inconvenient not very easy in reducing the quality of life. Now over a period of time they made it easier for people those that do not know about chronic disease whats the difference of three times a day from a syringe or the oral once a day or once a month . I can tell you it is a huge difference to the treatment with that those were inconvenient and if you skip those. Your time is expired. Thank you very much. Mrs. Miller you are recognized for questions. Thank you chairwoman and Ranking Member. Patients need access to lifesaving cures and we need these at a cost that will not break the bank. Im a cosponsor of hr 19 the lower cost more cheers act to help accomplish these goals the Congressional Budget Office estimated at the low end this legislation would and 38 new cures coming to market other estimates said to take more than 100 fewer into the hands of patients. Either way just one less lifesaving drug on the market is one too many. What is the cure taken out was the cure for leukemia or als . We must encourage innovation without the heavy hand of the federal government and put lifesaving prescriptions in the hands of the patient at a reasonable price. Hr 19 would do all of this. Doctor, how much does your company spend yearly on research and development . Approximately 10 billion. Now i will pose the same question to you. How much do you use your company spend . In the last year before the last year we acquired celgene recollection was five. 7 billion which was 37 percent of our revenue that year. Mr. Schultz your company . Approximately 1 billion per year. I will ask you all again. How does the cost of research and development affect the pricing of new drugs . It does affect it congresswoman, because as i mentioned earlier the research and development is extremely significant one of the highest in the industry we know many of the programs that we work on ultimately would not work and we have many of examples from clinical Development Programs from brain cancer, lung cancer and other diseases that have failed so the need to obtain on research and development is the way we think of the price of medicine of course the other is patient affordability to make sure. Mr. Alles . And with celgene that was unique almost every disease we researched was considered an orphan disease of fewer than 200,000 in the United States of people per year. So today we are talking about multicore diseases of leukemia. And those that was approved during the time is a drug for leukemia. And approximately 4000 people in the United States per year are affected by the biomarker driven by that disease. So we have these rare unmet needs on the belief of the orphan drug act that we word over time to recoup investment to build a successful company. It has everything to do with our direction, our strategy to invest and develop drugs for a very small rare and difficult cancers. How does that affect the pricing of your new drug . About half of Research Goes into generics and of course that research is lest cost because it is only been approved but then we spent many on bio similar is and its what i mentioned before to ensure with those us dollars per year it is similar to what happens it is much more high risk and Innovative Research and that makes it with the marketplace. And also what is allocated. Many of my colleagues have us believe that it is necessary for the public that the government could come in at any time to take back patents from Drug Companies. Do you think they would show innovation . Yes. I think continuing to recognize and reward innovation from what we currently have is a reason why we make longterm investments. Basically for the innovation and with our r d work because and there would be no balance between risk and reward. Congresswoman you are now recognized for questions. Thank you chairwoman maloney for this hearing and your hard work. Mr. Schultz im sure serving as the ceo you may have little or no contact how your actions hurt real people like my residence in my 13 districts. Your actions have consequences as you have heard from my colleagues. And one who lives at the mess she pay 6000 per month for her medication and an additional thousand just to treat her symptoms of pain and fatigue and balance. I 7000 per month may not see munched to you as the ceo but she doesnt have 6000 of disposable income per month the vast majority of americans dont i understand the drug was first introduced 1997 and the wholesale acquisition at that time was only 8000 annually today it is 70000. Do believe it is reasonable for lisa in my district to paid nearly 70000 per year to access . That is not reasonable at all. Thank you. So lets talk about other items. I also know the Drug Companies mislead the public by claiming terrible programs those that need medications can get them but they do not cover everyone is are not reliable for many of my residence i actually asked lisa who was on Social Security she could not get relief with no luck. Documents obtained by this committee suggest these programs serve Drug Companies own financial interest. Does your company donate to thirdparty which covers Medicare Beneficiary cost for their copays . We do contribute. Great. Would you consider donations to be foundation to be a Financial Investment . No we would not. Let me tell you why you are misleading us because internal documents provided to the Committee Show that the company did view them as Financial Investments and even described them this way. In your own work plan that exhibit 37 in your materials estimated the company would lose over 11 million in sales if it reduced the investment of medicare grants by four. 3 million it also estimated they met sales that were declined by 45 million if your company were to eliminate medicare investments. So it seems that they expected sales to decline without that grant is that correct . We call this a side hustle. You make these donations so you look like you give a shit of these people its really a scheme to make money off of sick people. She needs her medication to live she is not part of the hustle and should be one. So this is what you are misleading the public with their own internal analysis they spent 54. 6 million in 2014 but in return you got 257 million back. That is 371 percent profi profit, mr. Schultz. These are companies own estimates. These are your own documents. They suggest what you another Corporate Executives type to be charitable programs is a Profit Program to generate sales. This is so important and these are her words rarely do we put a human face behind the actions of these corporations. We need this medication to have a decent life. There is no cure right now for ms. We need this because we want to contribute to society and make an impact. Mr. Schultz, we need to go back and stop misleading the public to make sure that these drugs have peoples quality of life in jeopardy and i ask all of you and for my colleagues to please Pay Attention those that are submitted for the record. I yield back. I now recognize mrs. Presley you are recognized for your questions. Thank you very much madam chair i appreciate we can continue to work with my beloved colleagues in investigating drug prices. The represent the seventh Congressional District one of the most unequal in our country letting that disparity play out when it comes to health and economics. Let me be clear lack of access is an injustice and represents economic violence and the attack on the basic principle of healthcare as a fundamental human right. Across the commonwealth of massachusetts the seventh Congressional District of which i represent has the highest rate of new diagnosis of multiple myeloma it is a cancer in those of increased risk with the ongoing pandemic . So the Company Still gene raise the price of this lifesaving drug from 215. 719. I appreciate your assisting to answers so i asked the same from you in my line of questioning. For the record, yes or n no, deeply Pharmaceutical Company should prioritize people over profit . We can always do well by doing good. Yes or no. We have to take care of people for us to be successful so we have to prioritize people and the medicines we develop for the diseases they have. That was not a yes or no. According from documents of our investigation 2009 through 2018 revenue generated 58 billion in net revenue including 32 billion from the us alone. To understand how that accumulate such massive revenue rather than the precursor drug which celgene acquired in 1992 was at a new drug when it was acquired . It was not a new drug when we license that from the rockefeller institute. It was an old drug that had a notorious history causing birth defects. Its been used since the 19 fifties and 1996 they found it to be treated using multiple myeloma. Did you know the study was funded by the grant from the National Institutes of health with taxpayer money . I was not aware specifically the only funding was nih grant but i would not be surprised if some funding was provided by the government. So there are three different studies the chemical variation which would later be named revlimid was even more effective treating multiple myeloma so later more investigative clinic and they collaborated showing it worked with another drug to treat newly diagnosed patients. Did you know these were also funded by nih with taxpayer money . Congresswoman i do not know the studies specifically. But i can say the development of revlimid and that discovery in the initial form was something that celgene uniquely discovere discovered. But only after these federally funded studies that celgene invested in the trials needed to obtain fda approval. Isnt that right . The studies sponsored by celgene leading to the new diagnosed approval, these studies the randomized trial ran globally. We have a timeline which impairs at which i am asserting in this moment. Only after the studies that celgene invested in the trial to obtain fda approval so by the time you decided to invest its own money taxpayers had artie contributed and your company was taking the future billion dollars success this is an internal memo from your company saying as much and you wrote that was grossly underestimated the potential for revlimid. Do you recall writing that to a colleague . I saw that document this morning i did remember writing that that accompanied a paper. So despite the taxpayer investment celgene does not have any documents to Government Healthcare programs. So this is a classic example of profits over people so although the white house does not pay federal income taxes my constituents do immigrants and Single Parents pay and you charge the same taxpayers hundreds of dollars to use that lifesaving medication. And those that underwrite the investments in the drug prices are so high they cannot afford to stay alive this is about the right to live. Thank you i yield back. The future woman for holding this hearing this is a incredible importance to our former chair Elisha Cummings. Thank you for offering your expertise. Talking today about my constituents with multiple sclerosis and that they have been facing. I would like to put on the screen goes by Different Countries in 2015. This is using data that your Company Provided in the daily net price but double that in the United States. So to have that similar capacity of those 429 so why is a price on the tire than other countries . The data we dont know how the pricing was back then but it has been discussed it with a crisis in europe and thats what you see in these numbers. I need to reclaim my time because it is so limited that explanation provided you are forced to charge lower prices and the Strategy Plan and with those price pressures. I have no knowledge. That is quite alright will people like to put pressure to raise the prices on the was multiple sclerosis and they started to study but outside of the United States to have a decrease in the list price so the use some form of negotiation and reference pricing . They have a reference pricin pricing. So it is the list price and we have a lot of rebates go to the pbm. Its my understanding European Countries have price negotiation that have nothing to do with the fact its almost four times higher than countries like canada or spain or germany . The differences the negotiating with you negotiate with one party then of course the position changes and then with the pbm there is a higher discount. [inaudible] thank you. Ms. Porter you are now recognize. Thank you. You are ceo of celgene until fairly recently and as we established you make revlimid a cancer drug do know the price when you first hit the market in 2005 . I dont remember the number. 215 for one pill. Do you know the price in 2013 . I can look it up. 412 per pill. Now more recently what about 2017 . I would say approximately 700 per pill. 719 per pill and today revlimid 763 per pill. I am curious. Does a drug get substantially more effective in that time. Do they need fewer pills . During that time the development included six additional indications of lymphoma. Great. Reclaiming my time so more patients who could benefit from paying 763 per pill so did the drug work faster . With fewer side effects . What is the production to justify the price increase . The indication changes are for subsets of different patients with a different disease. I understand that. What im trying to understand from you is how did the drug improve analyzing it from 2005 at 215 today is 763. I understand your question. The manufacturing would be the same. Thank you. To put that into perspective you have the price raised by 500 but the people would have extra 520 in their bank account the average Warren County senior cannot even afford one pill you said nobody pays the list price. Do uninsured patient sometimes pay the list price . I can imagine there are certain times underinsured or uninsured patients would be paying close to or at the list price. I dont know any specific circumstances. One other number. Do you know this number is . Doesnt ring any bells . I thank you are referring to my compensation. This was your compensation in 2017 as the ceo of celgene it is 315 times what the average senior gets on Social Security. Of that 13,000,002. 1 million came from your company and more than half is based on the targets. Any increase in the price of revlimid increases your earnings as of that correct . If revenues increase and expenses did not then earnings are enhanced. Thank you. So this is the price of revlimid you would not have gone your bonus, should you personally receiving bonuses over the last two years just because celgene raise the price of this one drug of revlimid . I received a very generous compensation but i dont know the exact number you are referring to. In fact you personally received half a Million Dollars personally just by tripling the price of revlimid. So to recap the drug did not get better. The treatment for patients did not get better work you just got better making money. You just refine your skills that price gouging. To be clear, the taxpayer spent three. 3 billion on revlimid. Dr. Caforio when your Company Acquired celgene . That is correct if the price was only increased at the rate of inflation would be 286 today according to the fed inflation calculator. Will you commit to lowering the price of revlimid at 286 per pill . Your time is expired but the gentleman may answer the question please respond. No i cannot commit to that. With that value when we acquired celgene i can commit to continue to work to ensure that they have access to do all they can to make it happen. Dr. Caforio just for clarification yes or no way you commit to lowering the cost. Your time is expired. A ready answer i cannot commit to that. Before we adjourn come i want to address the members on the other side of the aisle who is stated repeatedly throughout this hearing that we should be working on a bipartisan basis. This is a critical issue to the people of america. I agree. And we want to work on a bipartisan basis. Chairman cummings tried to do so it was one of the first senior democrats to go to the white house after the election and met with President Trump on marc march 8, 2017. He took the president s Campaign Promises at face value that he wanted the Us Government to finally be able to negotiate for lower prices. He went on a platform. Chairman cummings gave the president a copy of the bill to do just that. And asked for his input on hr three and asked to Work Together and asked repeatedly for the president support. But President Trump fell off the face of the earth. Chairman cummings sent letter after letter after letter to the president in good faith and a bipartisan way. He said on april 20th, 2017 reiterating the request to Work Together. I have a copy right here he sent another one june 21st. 2017 and i have a copy right here. And then he sent a third letter october 25th, 2017, i have a copy of that letter and i would like to ask unanimous consent to place all of these letters in the record. Without objection. Do you know the president s response . Zero. He never responded to chairman cummings again. He broke the promise he made during the campaign to support legislation to finally let medicare negotiate and he broke the pledge he made directly to chairman cummings in the white house to Work Together in a bipartisan way. So to my colleagues who are complaining we did not work on a bipartisan basis you should be directing your criticism directly to the president. He is the one who back on his promises and the one that refused multiple times the efforts by chairman cummings to Work Together. In closing, want to thank all of our panelist for their testimony and i want to commend my colleagues on both sides of the aisle for participating on this very important conversation. Tomorrow we will continue this conversation with part two of our hearings on the skyrocketing price of Prescription Drugs and at that hearing we will finally hear from three more drug Company Executives from amgen and novartis. I look forward to seeing all of you on all of you tomorrow at 10 00 a. M. And i recognize for comment my distinguished colleague and noted without objection we are five legislative days with which to submit additional written questions forwarded to the witnesses for their response. I asked the witnesses to respond promptly as they are able and i recognize my good friend and colleague the Ranking Member of the committee for his closing comments and thank you for your participation and his willingness to work in a bipartisan way. Thank you madam chair. That is true. We sincerely want to Work Together. This is a bipartisan issue. With respect to the letters that you mention the former chairman cummings and yourself and all the members of the committee have sent the president you have sent so many letters from this committee to the president i would say that they view that as junk mail because they get so many letters from this committee. Moving forward we need to pick some issues that there is bipartisan agreement and this is an issue from hr 19 that as many of the things that many of your members referenced during this hearing so the potential is there a recognize there is no mood for true bipartisanship over the next 30 days but hopefully after the lecture we can Work Together and move forward to do with the constituents want to be on top of some type of reform and with that i yield back. Thank you for your participation and comments this meeting is adjourned. [inaudible conversations] [inaudible conversations]