Transcripts For CSPAN2 Pharmaceutical Executives Testify On Drug Pricing Day 2 20240712

Welcome everybody to todays hybrid hearing. Pursuant to house rules, some members will appear in person and others will appear remotely via webx. Some members are appearing in person. Let me first remind everyone that pursuant to the latest guidance from the attending physician, all individuals attending the hearing in person must wear a face mask unless you are speaking. Members not wearing a face mask will not be recognized. Let me also make a few reminders for these members appearing in person. You will only see members and witnesses appearing remotely on the monitor in front of you when they are speaking in what is known as webx as active speaker view. The timer is visible in the room directly in front of you. For members appearing remotely, i know you are all familiar with webx by now, but let me remind you of a few points. First, you will be able to see each person speaking during the hearing, whether they are in person or remote, as long as you have your webx set to active speaker view. If you have any questions about this, please Contact Committee staff. Thatd, we have a timer 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 who are not recognized should remain muted to minimize background noise and feedback. Fifth, i will recognize members verbally. Members retain the right to seek recognition verbally. Members will be recognized in seniority and regular order. Lastly, if you want to be recognized outside of regular order, you may identify that in several ways. Committee staff will ensure i 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 livestream. 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 welcome today 2 of our landmark series of ceosgs with drug company. Yesterday, we heard from the ceos of three Drug Companies. What we learned was shocking. Drug companies are hiking their Prices Higher and higher and placing an even greater burden on the patients who rely on these drugs to survive. We learned that the skyrocketing prices are simply unsustainable, both for Government Programs and American Families. We also learned that claims by Drug Companies that their price increases are necessary for research and development are completely bogus. The internal Company Documents we obtained show that Drug Companies hike prices almost entirely for selfish reasons. They do it to meet Internal Revenue targets or increase their own bonuses in some cases. Drug companies certainly spend some funds on research and development, but nowhere near the windfall profits they are bringing in as a result of their massive price increases. In the cases we examined yesterday, we learned that Drug Companies target our country for their biggest prices and for biggest price increases, charging the American People more than the entire rest of the world combined. They do it simply because they can. Because federal law currently bars our government from negotiating directly with Drug Companies to lower prices for medicare. According to the nonpartisan cbo , allowing the government to negotiate with Drug Companies could lower the spending on brandname drugs by about 456 billion. So let that number sink in. Of 1nearly half trillion. Excuse me. Today is day 2 and we will hear from three more executives. We will hear from the ceo of amgen. Which repeatedly raised the prices of two drugs used to treat Rheumatoid Arthritis and other painful inflammatory diseases. And another drug used to treat the effects of kidney failure and parathyroid cancer. We will hear from the top u. S. Executive from novartis about the companys massive price increases for a drug that treats chronic leukemia. A rare form of cancer of the blood and bone marrow. And we will hear from the ceo of mallinckrodt about the pricing of its drug used to treat a rare sheet seizure disorder in little babies. We will keep our Opening Statements short because we want to hear from our the testimony from our guests, but i would now like to turn to our Ranking Member for his opening statement. Thank you, madam chairwoman, for holding this hearing. I would like to reiterate a few points brought up yesterday. First, republicans have introduced legislation, hr 19, full of bipartisan provisions that the house could pass today and be signed and into law by the end of the week to decrease the cost of Prescription Drugs for all americans. Second, pharmaceutical innovation is vital to enabling americans to live longer and healthier lives, but we must ensure those products are accessible and affordable for all americans. Third, while brand pharmaceutical manufacturers play a significant role, we must look at the entirety of the marketplace, including pbms, health insurers, generic manufacturers, and wholesalers, to truly solve this problem permanently. At this time, i would like to yield to yield the balance of my time to representative massey. Thank you, Ranking Member and thank you madam chair member madame chairwoman. The testimony today will involve the u. S. Patent system. In this opening statement, i want to read the patent and copyright clause in the constitution. This clause was so un controversial that it was accepted by all of those drafting and voting on the constitution unanimously and without debate. It says the United States Congress Shall have power to promote the progress of science by securing for limited times to authors and inventors the exclusive rights to their writings and discoveries. To some people who have not studied this issue too much, they think that perhaps patents is part of the reason drug prices are high. But the reality is on a lot of the drugs, the patents have expired and there is no restriction from the Patent Office to keep somebody from making generic versions of the drug, but there are other impediments not involved in patents that stop these generics from coming to market. I hope we find out what those are about. Then i also want to say that our Founding Fathers were really smart here. They knew that if the owner had a limited period to recoup their investment, the inventor and the owner, then they would be able to find the capital and the backers to develop these ideas and discovery. Even if you had scientists who come up with new drugs for free, and say they just gave the idea away, the new drugs require millions, hundreds of millions in some cases of development in order to bring them to market. Without a patent, which is the equivalent of a deed, like a deed to a piece of property, no one would develop a piece of property if they could not get a secure title patents work the same way. Then invest the money required to bring that to market to test it and make sure it is safe for all human beings. I look forward to robust discussion on that and without, i yield back. I want to thank my colleagues and with your indulgence, because of my cough, i would like to just lead up to the video that we want to play before we go into it, but i did want to respond to my good friend and colleague i believe we should work on this issue. It should be bipartisan. Since you mentioned your bill, i will mention mine, hr 3, which would merely allow our country negotiate for lower drug prices for medicare, as we do with the veterans association. It has passed the house and is in the senate. What i would like to do is to honor and remember our former chairman, Elijah Cummings, who launched this investigation 18 months ago. His number one priority then and our number one priority now is the health and wellbeing of the American People who are being harmed by a daily basis by these astronomical price increases. So i would like to conclude my statement by playing a clip of three individuals, patients and doctors, who are being directly and negatively affected by the actions of these three Drug Companies. If we could now play that video and move quickly forward. My name is heidi and im a proud mom from missoula, montana. Three years ago, after an abnormal blood test, my doctor told me i had leukemia. One day i was healthy, the next day i had cancer. It was a complete shock. She told me im lucky, my cancer is treatable with a drug, but i would have to take it every day for the rest of my life. Then i got a second shock. On top of my awful diagnosis, she told me the drug cost 10,000 every month. Drug, itateful for the keeps me alive, but the price tag constantly hangs over my head. Instead of just focusing on my family and my health, i often have to carry around the burden of what would happen if i could not pay for it. I have no choice, but you all have a choice. You can take action to lower drug prices because drugs dont work if people cant afford them. Carter, and name is i work at Oregon Health sciences university. I take care of babies suffering from a rare seizure disorder. By best drug is made mallinckrodt pharmaceuticals. Without this medication, children are more likely to face lifelong uncontrolled epilepsy and have developmental disabilities. This drug provides the best chance for the child to live a more normal life. It is not a new drug. It was first approved in 1952. For decades, it was priced affordably, but since then Drug Companies seeking more profits acquired the medicine and made a series of unwarranted price increases. Is vial same vile is 40,000. The price has impacted my rack to send my patients practice and my patients. The cost and delays their care, prolonged hospitalization, increases seizures, and harms intellectual development. Mallinckrodt can maintain the higher price because they know they have a captive Patient Population and doctors dont have a good alternative. Their price hikes rely on the desperation of families who want to alleviate their childrens sufferings. Mallinckrodt should not be able to profiteer on the tragedy of these babies. Thank you for listening and i appreciate you addressing the issue. Hi, im from chicago illinois. When i was 30, i was diagnosed with an incurable condition. To treat the constant pain, takei weekly injection of a drug. When im on the drug, i dont have symptoms. I can ride my bike totally painfree, or school but my daughter. I also have to carry the fear knowing that this could be ripped away. The drug is priced at nearly 6,000 every single month. My ability to cover those costs goes away and i know i will go back to waking up every morning and pain. On top of that, my doctor tells me that missing even one dose could mean the drug starts working stops working for me. These risks because crippling anxiety on top of the burden of the disease itself. In order to avoid the interruptions, i have been forced to dip into my savings and jeopardize my Financial Health and i consider myself one of the lucky ones. I urge you to enact solutions to lower drug prices. Thank you. Thank you very much and i will now introduce our witnesses. We are grateful for their attendance today and their testimony. Our first witness today is mr. Robert bradway, the chairman and ceo of amgen. Amgen sells the antiinflammatory drug and Chronic Kidney Disease drug. Mr. Markill go to trudeau, the president and ceo of mallinckrodt pharmaceuticals. The sellscells antiimmune drug. Finally, we will hear from mr. Thomas kendris, the u. S. Country president of novartis, which sells a cancer drug. The witnesses will be unmuted so we can swear them in. Please raise your right hand. Do you swear or affirm that the testimony you are about to give is the truth, the whole truth, and nothing but the truth, so help you god . I do. I do. I do. Thank you. The witnesses answered in the affirmative. Your written statements will be made part of the record. Bradway, you are recognized for your testimony. If you could unmute your microphone. Good morning. Members of this committee. My name is bob bradway and im the ceo of amgen, a leading Biotechnology Company based in thousand oaks, california. Before i begin my remarks, i want to acknowledge the work on Elijah Cummings on drug pricing issues. I know he is sorely missed by his former colleagues and i want to recognize his work dedicated to improving access and affordability for patients. Unwaverings, amgens mission has been to serve patients. We do that through innovative medicines and highquality bio similars that treat many of the worlds most serious and costly illnesses. We are also engaged in the fight to understand, treat, and prevent covid19. We employ nearly 14,000 people here in the u. S. , where we conduct the vast majority of our cuttingedge research and ecofriendly manufacturing. Amgen is deeply committed to meeting the needs of every patient, every time. Therefore, it is of great concern to us when patients who might benefit from our medicines cant get them. We are committed to responsible pricing. A few recent examples. In 2018, we launched a new migraine prevention treatment at a price that was between 20 and 60 below market expectations. Proven made a medicine to reduce heart attacks and strokes inpatients with stubbornly high cholesterol levels available at a 60 reduced price. Pocket d lower our outofpocket costs for patients, especially seniors on medicare. Over the last two years, we have launched bio similars to some of the top selling drugs in the country and plan to bring more to market over time, providing patients with more Affordable Treatment options. Overall, the average net price for amgen medicines across the entire portfolio in the u. S. Declined in 2018 and 2019 and were on track we are on track for further declines this year. An amgen medicine that treats patients with autoimmune disorders, such as moderate to severe Rheumatoid Arthritis it highlights the tension between access to critical, innovative medicines and the outofpocket costs that are also required to pay. Physicians tell stories of how their waiting rooms were cluttered with canes, crutches, and wheelchairs, but thanks to the drug, thousands of patients have been given a new lease on life. Since the approval, we have invested hundreds of millions of dollars in studies for additional uses and to make it more patient friendly. As an example, we recently introduced an easy to use self injection device designed for patients whose disease has sapped the strength in their hands. But innovations like this cost money and that is partially why we have increased the list price in the past. But what has driven up the list price more than any other factor match pressure we face to the price increases of the market leader. I know this sounds strange, companies in virtually every other industry compete by offering the lowest price. Unfortunately, the current rebate system in the u. S. Created with good intent now often leads to a situation in which not getting off formulary requires matching a competitor upon higher price. It increases the significant rebates paid to the middlemen who largely dictate which medicines patients can access, regardless of which medicine there physician prescribes. These rebates paid on all of our medicines do not translate into lower costs for patients. That is because they dont get passed on to patients at the pharmacy counter. There is no question that the present rebate system is dysfunctional and does not serve the patients it was designed to benefit. As we wrestle with the worst Public Health and Economic Crises of our lifetime, the time is now and the place is here to craft the changes that are needed. Innovative biopharmaceuticals are part of the solution to the burden serious diseases impose on patients and society. Amgen strives to prove affordability, however a single manufacturer cannot make that happen alone. We stand ready to work with members of both parties, the administration, and other stakeholders to develop policy solutions, help improve access to affordability for our patients without stifling innovation. There are so many diseases to confront and patients to help. As we stay focused on what is best fors, unconfident for patients, im confident we can end up in a better place. Thank you for the opportunity to speak to you this morning. Mr. Trudeau, you are now recognized. Trudeau charwoman, Ranking Member, members of the committee, thank you for the opportunity to be here today. I started in the pharmaceutical industry as a research and Development Engineer nearly 40 years ago. Over the course of my career, ive worked on pioneering treatments for several critical diseases, including some of the first for hiv. The leadership roles ive had another regions of the world have allowed me to understand the strengths of the u. S. Health care system and its challenges. Ive devoted myself to this industry because like the nearly 3300 employees at mallinckrodt i know that the therapies we make improve the lives of patients and their families. This has been a year of unprecedented challenges. When covid19 hit, we mobilized to identify therapies to combat the disease and consulted with the fda and nih about potential evaluation of our inhaled nitric oxide therapy for the treatment related respiratory complications and supported an of today, nearly 250s hospitals and u. S Health Systems have used inamex as an experimental treatment for covid19 patients. We also secured our supply chain to avoid manufacturing interruptions for the critical 54,000, and donated pieces of ppe, several ventilators, and more than 16 000 gallons of Hand Sanitizer manufactured in our missouri plant. We also engaged with members of congress and federal agencies like barda to discuss leveraging our extensive experience making high quality, u. S. Made generics at our plants in missouri new york, illinois, and North Carolina to bring home the manufacturing of essential medicines and active pharmaceutical ingredients. Today we are the only american manufacturer of acetaminophen a key active pharmaceutical ingredient in many medicines, which we proudly make in illinois and North Carolina. Our resolve to help patients with critical conditions has never been stronger. We understand and share the American Peoples concerns over the availability and affordability of Prescription Drugs. We are steadfastly committed to knocking down barriers to Patient Access. Thats particularly true with our jail. Axar is a complex injectable biopharmaceutical product fda approved for 19 serious conditions, including infantile spasms, lupus, multiple sclerosis, nephrotic syndrome, and Rheumatoid Arthritis eczar arthritis. It is lifechanging therapy for a small group of patients for whom other Treatment Options have failed or patients whose conditions if left untreated may lead to physical and developmental impacts regarding requiring lifelong care causing great financial strain on families and the American Health care system. Its our policy to provide reference samples to generic manufacturers upon request and weve supported legislation like the creates act to ensure appropriate access to those samples. Since we acquired actar in late 2014, we have invested more than 660 Million Dollars into modernizing the product including over 470 million in r d activities and close to 190 million in manufacturing advancements. Weve initiated nine Clinical Trials with targeted combined enrollment of nearly eleven hundred patients, a large number, given the rear and complex conditions it typically treats. Results from one study with patients with persistently active Rheumatoid Arthritis showed that treatment with actar resulted in low disease activity for an astounding 62 percent of patients for whom standard treatments did not work. The list price has increased on average around five percent annually, not factoring in inflation or significant discounting we started when we acquired it. Two of the last six years we didnt take any price increase and last year the net price of it went down, as it will again this year. We have also improved the ability of patients with a prescription to obtain it through our robust free drug and commercial copay assistance programs, which many patients pay nothing outofpocket. Like all of the employees, i dedicated to bring more breakthrough treatments to the market, including one of two treatments we are developing for patients with advanced liver disease, regenerative skin therapy, which may reduce the need for autographed in a certain burn patients, and for a high mortality rare disease affecting children and adolescents area we will not waver in our commitment to serving patients with critical conditions who need better options. Thank you again for the opportunity to be here today. Thank you. Mr. Kindress you are now recognized. Thank you, chairwoman maloney. Cromer, members of the committee, thank you for the opportunity to speak with you today. Dress, i amom can the u. S. Country president for novartis a leading Global Medicines company. We use innovative science to develop transformative medicines that improve and extend peoples lives. We also develop generics and biosimilars through our sandoz the second largest Generics Company in the u. S. Our medicines reach close to 800 Million People every year. Globally we are over one hundred thousand people with approximately 15,000 employees in the united dates. Our global r d headquarters is in cambridge, massachusetts. We have several manufacturing sites across the u. S. Ive been with novartis for 25 years, and i still marvel at the passion of our people to tackle the most complex medical challenges. Gleevec was one of the most significant mental advance medical advancements in recent history. It revolutionized targeted therapy for cancer. Before gleevec was introduced in 2001 the fiveyear survival rate for a patient with chronic Myeloid Leukemia was only 30 percent. Now the vast majority of cml patients have a normal lifespan. Once more, novartis continued to study whether the drug could treat other diseases. Today it is approved for six other rare cancers, saving tens of thousands of lives. A more recent example of our transformative treatments is the development of a gene therapy to treat spinal muscular atrophy, a rare genetic neuromuscular disease that affects primarily babies. The treatment is one of the first gene therapies to be approved in the u. S. , with a single injection. Some babies who would have otherwise died by the age of two or three are now going to kindergarten and growing up like other children. In cell therapies, we developed the first car t therapy to treat a rare form of pediatric and young adult leukemia. This therapy can bring a patient from the brink of death to remission. The first patient ever to receive this therapy has been cancer free for eight years and is now going to high school and leading a normal life. Spending time with this young patients family is one of the great privileges of my career. Beyond Rare Diseases and cancers, we are reimagining how innovative medicines might improve Public Health broadly, particularly in sicklecell anemia, malaria, and cardiovascular disease. Id like to be clear with the committee that at novartis we recognize that these innovations dont matter if patients cannot afford or get access to them in get access to them. In the u. S. , issues of price and access present systemic challenges that must be addressed together by industry and policymakers. And novartis is committed to being part of the solution. While cms predicts National Health spending to grow at an 5. 4 throughof 2028, the average net price of our medicines is expected to decrease by 2. 5 percent in 2020. Valuebased pricing is a critical tool in addressing affordability and access. When setting prices, we at novartis consider multiple factors, including the improvements the medicines offer patients both clinically and in terms of their quality of life. And the benefits that the medicines offer to the Health Care System and society. The industry should adopt a similar approach. And patients can have access to treatments with low cost sharing to encourage the use of the most costeffective options available. We also seek to lower costs by developing lowcost biosimilars and generics through our sandos division, which brought the biosimilar to market in the u. S first. And over the past five years novartis has provided medications at no charge to nearly 300,000 u. S. Patients experiencing financial hardship, or who have limited or no Prescription Drug coverage. Eligible patients with commercial insurance often pay less than for a 30day 30 prescription for the vast majority of novartiss products. The pharmaceutical industry used to be revered. That trust has eroded however , and our industry must work to regain it. At novartis we understand that this trust is earned not just from bringing breakthrough medicines to patients, but by pricing these medicines responsibly and ensuring broad access. While we live in an incredible era of progress and human health, we will only be successful if we can make both of these goals a reality. At novartis we are passionately committed to doing so. Thank you for your time this morning. I look forward to answering your questions. You. Ank all of i now recognize myself for five minutes for questions. And i thank mr. Cromer for allowing me to go over a little of my time. I certainly grant the same to him and more to his colleagues on your side of the aisle. Yesterday, we heard the ceos claim over and over again that they had to raise drug prices to help pay for research and development and promote innovation. But the internal documents we obtained showed that these. That these claims were false. Instead they showed that these price increases are intended to generate more and more revenues for the Drug Companies. Mr. Trudeau lets start with you. In your written Statement Today atu made this statement, malencrott we believe that pricing for an innovative therapy should reflect the value that the treatment bring to patients, providers, and the Health Care System as a whole. Acquire company didnt acthar gel because you thought it was an innovative therapy. It was a very old drug. You acquired it to meet your financial objectives. Id like to go through three quick slides with you. First is exhibit 66. It is up on the screen. This is a a slide from a presentation that was prepared when you were considering the acquisition of west core, which made acthar. As a preliminary matter, these talks about quincy, quincy was just the code name you used for your real company, quest core. Thats correct. Thank you. The title of the slide says quincy or questcor is a rapidly growing Specialty Pharmaceutical Company with a premium priced product. Mr. Trudeau, the premium price product was acthar. And premium priced just means really expensive. Right . Thats actually not true. That is absolutely not true. We set the price at a premium. Lets look at the next slide, exhibit 67. The fourth bullet, this slide says your acquisition would allow mallinckrodt, quote, to achieve aspirational goals with a single transaction. By aspirational goals you are talking huge revenues and that is exactly what you got. Sales accounted for a third of your companys net sales from 20172019. Isnt that right . The sales are roughly correct. Our goals were to transform the company. Mallinckrodt was originally generic and we were looking to make a transformation to a company focused on research, investment, and the opportunity to address patients of severe and critical conditions under therapies. Lets look at exhibit 68. Mark trudeau, i will read the headline. It says your modernization strategy will define the future of akbar as either a growth asset or a, quote, cash cow. Isnt it true this is how you see this as an innovative therapy but a cash cow . That is not true. It was a draft document shown to the board but that is applied to products for which no investment is likely to go forward. Exactly the opposite. We invested in 660 million since we acquired the product in 2014. A cash cow is a profitmaking thing. What is the cash cow and the document speaks for itself. Lets turn to bob bradway. Your company is talking points claim, quote, we tried to focus the economic value, and the unmet medical needs, investment and risk undertaken, scientific and innovation. The internal documents tell a different story. Lets look at exhibit 36. This is a Pricing Committee presentation from december of 2016. In this document your Pricing Committee is basing its decisions not on innovation or research and development, but on what another Company Might do with a similar drug. Isnt that right . Yes, that is correct. It is important to note what is happening in this discussion. This reflects the nature of the structure of the biopharmaceutical industry for which we compete for formulary position for our medicines with other molecules in the same therapeutic category. We are seeing a snapshot about how we position versus other molecules that compete against it in this category. This document has three scenarios for what advil might do and it plans what your company will do in response. Bob bradway, these pricing executives are not discussing any of the things you mentioned in your talking points. They are not discussing research and development, unmet needs, investments, risk undertaken, innovation, instead competing with other companies to beat their prices, you are all increasing them in lockstep. Isnt that right . That is what the document says and i think it is scandalous. What you see is a document that illustrates the competition that exists to keep on formulary. If i may be allowed, the structure of the market that requires in this document. And the antiinflammatory space, we offer rebates which secure position on the formulary of intermediaries to determine which are available for patients to use and reflect the scenarios being considered, to make sure the medicine remains available for patients already on it and those patients whose physicians want to add them to the therapy. Looking at a range of scenarios and the rebate that would be associated with them in the past. Lets move on to Thomas Kendris virginia written testimony is a, quote, given its lifechanging attributes weve committed, to patients who need it. One of the documents obtained by the committee shows executives as high as possible, they price it so high from documents to meet revenue targets without triggering negative backlash. This puts the slide on the screen and this is exhibit 3. This is a slide of pricing scenarios, and the strategic financial plan, quote, action in 2013, in the top, the description for the pricing models, the greatest upside, with the low threshold. The aggressive model, 5 price increases of 9. 9 over the course of three years. Your company chose the most aggressive pricing model, didnt it . In the next sentence after the one you read, the document i am seeing this morning recommends enhancements to our patients support program so what i would say is over the years since it was introduced onto the market its value increased exponentially because of the above five new indications we obtained, the tens of thousands of patients whose lives were saved over time. It became clear the remissions in all of those cancers were robust and longlasting. We didnt know how long patients would live and survive. Over time we found out they did and we turned cancer, all of these 6 cancers from fatal conditions first to a chronic condition and a followon product, we turned it into a treatment free treatment free condition, they dont have to take a pill any longer. So they were tremendously valuable and price increases we took, we took over those years, the lowest price product, product is generic, we havent taken a price increase since 2015 and today, 55 what we manufacture is given to patients who cant afford it, given away for free. The bottom line is novarrtis went with amassing strategy that would raise net sales raising the price five times in five years was all the claims by Drug Companies why they need to increase prices to pay for research and development and innovation, simply not true. These documents show they are increasing prices simply to make more money plain and simple and that is why we need to finally allow the government to negotiate directly for lower prices like all other countries. Again, these Drug Companies make more off of the United States than all the other countries in the world combined buying their products. There will be further questioning on rebates and how they are not working or not getting to people but i am over my time as i am and i want to recognize Mister Massey for his questions. Thank you for allowing me to go through the slide. You mentioned mallinckrodt manufactured generic drugs and that was part of the market. In general, what percentage of prescriptions in the United States are generics . It is approximately 90 at this point. 90 of prescriptions written and filled in the United States for generic drugs, that is fantastic about is the cost of generics significantly higher than in other countries. The United States generic market is among the most efficient meaning prices drop most rapidly in the us, and efficient markets. Generic prices relatively short amount of time many times within a year drop about 10 to the branded price, to other countries. After brandname drug goes off patent, how to get a generic drug to market. To demonstrate secure product bioequivalence. That requires some clinical work and other investment, research and Development Investment and you need to be efficient from manufacturing distribution standpoint because you are competing in an aggressive competitive market. Something we can do in congress to make it easier to get to a generic brandname label after a drug goes off the patent. Generic environment today is quite good. Theres been some significant improvement of the regulatory side improving improvement of generic approval. Statistics show the fda generated more approval over the last couple years, certainly adds competition to drive down prices. To produce the generic without infringing on a patent the patent has to expire or is that not typical in the drug industry . It could be done but thats not typical, mostly Generic Products into the market after the expiration of patent. What is the lifetime of the patent . Patent can vary but the lifetime is typically going to be on the order of 20 years from the actual discovery itself. Much of that time frame is taken up by research and Development Many times when you launch a branded product, only a couple years left because most of that time has been eroded, taken time to develop a product. Typically it is 20 years. It can vary a little bit. That is 20 years from when the invention occurred and sometimes you are only left with a few years to recoup the investment. How many of the drugs result in a profit . On the generic side typically you are likely to be reasonably successful because you are not driving innovation, but what you are doing is driving down costs, bringing competitive markets to the market. On the branded side it is a little bit different. On the branded side, you are driving innovation, dramatically lower. We had some statistics the one in 100 or so drugs in the market is in the range, it is hard feel your high risk environment when developing any new innovation as we all know. A few questions for bob bradway. You talked dont know if you use the word convoluted but seems convoluted those of us not in the industry and trying to understand the drug pricing schemes, how it involves pharmacy benefit managers and rebates, can you tell us roughly what percentage of the money my constituents spend on drugs or the government spends on drugs for my constituents goes to pharmacy benefit managers. Yes. I can tell you the intermediaries which include dvms have 0. 46 on every dollar in the pharmaceutical industry and 46 of the drug industry, reflects revenues that go to intermediaries. The drug price consumers pay goes to intermediary instead of Drug Companies. Instead of directly to the patient, that is correct. No constituents pay the pope copay on a drug, you mention rebates that are paid, to the rebates go to my constituents . Who do they go to . Thank you for raising this question. It is important to appreciate, the copay is a function of list price and the rebates are functioning at list price so as this price rises the intermediaries rise as well. The other consequences patients have to pay a copay off of the higher list price and discount given to the intermediaries are not provided a pharmacy counter to the patient. We wound up with a situation where the intermediaries are getting rebates and not directly transferring to patients. The intermediaries are seeing their share of increase while asking them to reach into their pocket in any form of copay. It is not collected by the innovative industry but by the intermediaries. The copay because of the way the pharmacy benefit managers work the copay my constituents check that they have to ride out, they have to borrow the money for that copay it is based on the actual price that goes through the Drug Companies repeats for that drug, not even based on the price of the drug, based on a higher affective price. Is that correct . Absolutely right. And a fraction of the lift price, the Innovative Company receiving that price, return to the intermediaries. The rebates, 150 million, in the hands of the intermediaries. One more question. Can you explain to us what the intend was when we came up with pharmacy benefit managers system, what the intend was, to make drugs more accessible or lower price. It wandered over the years. And the structure of the rebates system, was created by legislation that enables us to interact with the intermediaries that includes paying rebates to secure formulary placement for our medicines. Hands one of the useful functions, and and what is written for generic drug. They are playing an appropriate role to innovate protections and formularies that stipulate the position and patient from one another at the pharmacy counter were patients cant be sure they walk away from the pharmacy with the medicine they intend on their behalf for the structural rebate system that is in place in the industry. In the closing we need some kind of truth in pricing here, people bought cars this way, the actual price of the car is what the consumer paid that wasnt the real price. That is something we could look into. Thanks to the chairwoman for your indulgence and i yield back. I recognize representative norton, you are recognized. I hope you can hear me. We can hear you. Thank you for this important hearing. The subject matter of drug prices is so important, you scheduled two days, one after the other, mister mark trudeau and Thomas Kendris, appreciate your joining us, we recognize you have crucial lifelines into their families and we heard from these hearings the too many families lose access, with each price increase. You raised the price of enron 27 times since 2002. Amgens profits have grown from 1. 25 billion in 2003, 25 billion today. Under investigation, since launching the drug in 2004, and jen raised the price 20 times and also, in 2004 to 1. 4 billion in 2018. Since then, and by extension in 2014, by more than 8,200, a 6 increase. From 2014 to 2019 the Company Generated 6 zillion dollars in sales. Since launching in 2000 for your Company Raised the price 22 times. Due to these increases your profits have grown 1 billion in 2009, 1 billion in 2009, 2. 9 billion today. Nearly one in 4 americans taking Prescription Drugs against the backdrop report difficulty with their medicine. From our hearing today, testimonies from these two patients who rely on these medications for their lives and struggling to make ends meet. They make heart wrenching decisions, and lowering the list price, in the United States. 95 , as i said in my opening remarks, we have lowered net prices across the portfolio in the us over the past be 2 years and try to repeat that again in 2020. Mark trudeau, yes or no, will you commit to more from the list price . Will you commit to lowering the list price in the United States, yes or no . We commit to lowering the net price in 2020 down to levels it was in 2015. Thank you. Will you commit to lowering the list price, Thomas Kendris, in the United States . The product went generic five years ago, lowered the price by giving discounts in the branded product. And giving discounts on the list price of post generics, and havent raised the price, we lowered the price in giving away 50 of what we manufacture for a patient who cant afford their medicine. Everything comes to make sure every patient can get it. The problem is they are not doing everything they can. I yield back. You are recognized for questions. Certainly set the stage almost perfectly. This hearing yesterday was a little tone deaf. All the states that shutdown due to reaction to covid19, certain drugs need to have prices. Millions, these harsh restrictions. This hearing isnt even focused on therapeutics, vaccine to covid19. The Biggest Pharmaceutical Companies with us. My colleagues on the other side of the aisle view Prescription Drug prices, price tags as topical. Since it is not cheap, cant negotiate these prices. In typical fashion you identify the problem to butcher the solution with more. In the past life, the first step looked to the source to if something is preventing the problem from occurring why not try . They point to pdms, at the federal government, any prescription job payment, drugmakers, pharmaceuticals and what do they have in common . Government influence and control. Health Insurance Companies are exempt from antitrust laws, they would really do not have to compete. Many of my colleagues mentioning an infusion of competition, a link in the chain monopolized. It took my entire political career to repeal the statute, to compete with your businesses instead of leaving most americans with little to no action. Others involved in the drug process, these companies fuel creation of new rules under the Obama Administration and how about pharmacies dealing with the 340 b contracts with strict price controls, no market for sand what about the drugmakers we have here today. They could go on about how the government is involved in the daytoday system. To keep those guys talking, i only care about so much time. The current system, this is a free market and the competition it is failing america. Crony capitalism, to socialized medicine, folks like these, it will be decimated. Those that need it would be lost. Simplifying the Prescription Drug, free Market Competition because soon you may look like Drug Companies and other countries where your profits are capped, your innovation and impact is going to evaporate. Lastly, thank you for taking the first step, competitive healthcare insurance reform act, to stay out of the house last week. This is the first step, Creative Solutions were marketdriven. What we see is patients, doctors and the system, thank you very much and i yield back. Thank you very much. Representative clay recognized for questions. Thank you so much, madam chair. My late colleague, Elijah Cummings, we knew this was one of his signature issues, thank you for keeping his memory alive and keeping this effort. Let me start off by thanking the through 3 witnesses for being here and say hello to a former constituent, mark trudeau who has headed up mallinckrodt, in the st. Louis community, for 150 years. Mark trudeau, let me start, part of the concern is it is a pretty old drug with a relatively high price and you said mallinckrodt is modernizing it. You have invested more than 600 million in it. Tell us why it is important to modernize this drug and arent there other more modern therapies that can take its place . Thank you for the question is good to see you as well. Like many opportunities, old drugs have been repurposed for new purposes. Looking at the antivirals being developed to treat covid19 for example, in the case of ask our it is important to create new information and evidence, things that have led to change our label to provide patients and prescribers and those responsible for reimbursement the appropriate scientific information to make good economic and clinical decisions for their patients. We are focused on doing the best we can for patients suffering severe critical illnesses who have relatively few options. Askar can make a difference. I believe in the important of medical intervention, you innovated a major focus of your company and you are funding part of that. How much does mallinckrodt interest and does your pipeline offer any privacy options for patients . We invest 350 million in research and development, a large number for a company of our size. We specifically focus on underserved patients with severe and critical conditions with relatively few options. Where developing products with severe liver disease, a product for adolescents and children with a high mortality rate, we are developing as a novel biotherapy to treat burns, reduce the need for autograft. We are focused on driving innovations with these underserved patients. My home state of missouri, covid19 has been a major concern. It is my view that during a national Public Health crisis like we are facing today, pharmaceutical and Healthcare Companies should be focused on finding a solution. Perhaps our three witnesses can tell us what our companies are doing in response to this National Pandemic and bob bradway, we can start with you. We are active in addressing the pandemic. I share your belief that all these innovative biopharmaceutical needs need to find ways to develop vaccines, develop therapies and prevent the infection from becoming serious and develop therapies to prevent the immune overreaction which we see for many infected with a virus and to be finding other ways to develop burden of the disease, with speed and scale of efforts underway both in our company and across the industry. Im optimistic we will have solutions. Can the other witness respond . As my time has expired. Time has expired but the witness may respond. I am happy to comment on that. It is very important to do everything we can to combat this challenging Health Crisis created by covid19. We have invested and partnered on Clinical Trials around one of our innovative therapies that can potentially help patients that are ventilated. As an experimental therapy in 250 hospitals. We donated pp even to lasers ventilators, Hand Sanitizer and made available our Healthcare Professionals at Company Costs to be treating patients on the front line. Important to do everything we can to combat this challenge. You are recognized for questions. I would like to start by saying we are interested and we dont want to overreach, and innovation that has brought lifesaving miracle drugs. At the same time discovering these drugs doesnt do a lot of good if people who need the drugs cant afford them. I want to follow up on the points on patents, i support extending the length of patented for an extension will lower drug prices. What i need to know from each of you if you can answer concisely so i can get in a couple other things i would appreciate it. Would this reduce drug prices . And starting with mark trudeau. Anything we can do for innovation, is likely, give the healthcare and opportunity to give drugs to patients more effectively at lower prices. Thomas kendris and bob bradway, if you have anything to add, i want to ask a couple other questions. Innovative pharmaceuticals are an important way to control healthcare costs, they advocate maintaining 12 years of data exclusivity in particular for biologic drugs. It is an appropriate standard and we see innovation as a way to do healthcare costs overall in the United States. I would agree with the other two witnesses, patents are essential to incentivize to invest in High Risk Research and the patent system as it stands does that and we support it. The reason we are asking these questions, it should be obvious that the drug Company Needs to recover their cost. My understanding of the private Drug Research industry, it has led the way in the development of incredible drugs but there is also a number of drugs that never made it to market and we have to deal with that stranded cost that goes into the pricing of other drugs. My question is what would happen if the development of drugs, to the development of these lifechanging, lifesaving drugs if companies couldnt recover their cost, that should be a fairly simple question to answer. Mark trudeau . I believe, my colleagues agree as well. Incentives are important if you are undertaking innovation which inherently has risk. So any additional incentives that can be provided, the potential to increase the reward, certainly need more innovation, in the case of drugs, potential treatments. If you guys have some ideas on incentives, writeoffs or losses or other incentives the government can provide would like you to provide that too to the end of this committee in writing but i do want to go back to something else, the issue of rebates. This is not the first time i looked at this. I started looking at this my first term in congress, there seems to be of substantial abuse of the rebates of how this is handled. That might be an example of what the federal government thought was a good idea at the time that it is not working out so well. I would appreciate getting feedback on incentives that you think would help Companies Bring the prices down but not compromise the ability of companies to develop these. I yield back. I now recognize you for questions. I recognize the critical importance of manufacturing. The danger of the drug producers for the availability of fraud. Mark trudeau, what has proven effective with numerous conditions and testimony . I apologize, the mike was not on. I recognize the credible importance of the drugs your companies manufacture to the health and wellbeing of many americans, the essential nature of the Prescription Drugs make it important to ensure continued availability and affordability for all. This received fda approval for numerous conditions outlined in opening testimony, it was first approved by the fda, and was priced, and weve seen an astronomical price increase at the expense of, and when the price per file was still at or below 100. A vile just like this for 100 just 20 years ago. Almost medially the price of the drug started to increase and in august of 2007 the price skyrocketed from 1,600 a vile to 23 per file literally overnight. When it was acquired for 5. 6 billion the price of a vile exceeded 30, 000. The same file cost 100 now costs 39, 000, 40,000 increase, let me repeat a 40,000 increase from this to this in a matter of two decades. American taxpayers are increasingly footing the bill for this drug. The number of Medicare Part d visits receiving actare increased 20 from 20132018. Cost to the federal government nearly tripled over that time. Do you know how much your company has collected for Medicare Part d in recent years . I dont know the exact amount, it has been many millions of dollars. It is 2. 5 billion. When mallinckrodt acquired it, how much came from medicare . At time of acquisition medicare sales were approximately 25 to 30 . That number has grown quickly, do you know what percentage is medicare sales right now . 55 . That is what the Committee Information shows, 25 to more than 60 of mallinckrodts sales. Not only is medicare the largest purchaser but internal data by the committee it shows you also charged medicare more than any other payer. Medicares average price per file right here is 4,300 more than what commercial payers pay. You know how much the federal government would have saved if medicare received the same discount as commercial payers between 20152018 . I dont know the exact amount but the number would be significant. It is not out of medicare formularies but left access to medicare patients who would benefit from the drug who would be happy to consider similar discounts if we had formulary positions with the same access. That would be helpful and im sure the american taxpayer would like to see it is the committee testament is it would save american taxpayers 150 a year. Attacks in version 2 ireland burdened american taxpayers. Is it safe to say you moved to dodge Corporate Taxes to lower the Corporate Tax rate . That is completely untrue. We sold from a Parent Company that was irish and they became irish as well. My time has expired so i yield back. You are recognized for questions. Mister cloud. Seems to me we often go about trying to fix the problem before asking what is broken about it and talking about drug pricing that we want to fix. It is out of control but its important to ask what brings cost down, it is competition and customer accountability through Price Transparency, it showed how complicated the Pricing System is which makes it hard for a customer to hold manufacturers accountable for the system accountable. In any other industry thats how it works, a manufacturer increases the product, pricing in the market as well. We have a us patent system that protects research, led to the us be the undisputed leader in innovation and to that extent system is working but what is broken is customer accountability and Price Transparency that keeps prices in check. If you think of the American People they go to their doctor and the doctor prescribes the best medicine. You talk about pbms and what you have to do. A physician with the appropriate medicine, challenge at that moment the physician and patient may not know if they can walk away from the pharmacy counter with within the insurance, he will direct them to us it something else. You have to pay rebates to get a higher placing on the formulary. The structure you created in the industry involves being a rebate to the intermediaries in order to secure of formulary placement. That is one mechanism in which the market is being manipulated, breaking the customer accountability mechanism. Americans understand Companies Need to make a profit to exist and create new cures. We understand the process leads to new cures tomorrow. What they have a problem with is the patent system, products, to extend generics and have little change but you gain extension to your patent and you pay for delay and these are issues they have to take seriously. I wish we had pbms and pharmacies, i encourage the chair and committee to consider that if we have a discussion on pricing. The system is complex and broken in a number of areas. My understanding is you talked about the patent time has expired. Are you saying generics are now available . Generics now supply 95 of the market and the product transaction, 95 less than what was prevailing before patent exploration. My understanding is you had an agreement to keep them from producing generics for a couple years. Is that correct . That is incorrect. We sued them for infringing on intellectual property. They ended up settling with us after launching at risk, settling with us for having launched against the uncertainty a patent position. The timing is interesting, that lawsuit was dropped at the same time you did purchasing some of their properties i guess. What is important to note is we have a couple bills we are looking at, hr 19 goes to address these issues when the system is broken versus hr every which is a takeover of the system and it is important to keep in mind lets not throw out the system that brought the best innovation and led to new cures that help so many people here and around the world and i caution that. Representative welch, recognized for questions. Thank you very much. These drugs are tremendous Health Benefit alleviating pain but if we cant afford it does no one any good and the question is the pricing practices of big pharma and how that is putting the cost of healthcare out of reach for individuals, taxpayers and employers who are trying to provide healthcare for their employees. I want to ask bob bradway about the Pricing Strategy for a few of his drugs. Originally approved by the fda for Rheumatoid Arthritis and amgen acquired the rights in 2002. Is that correct . That is correct. Your Company Bought a product that didnt create a product. Correct . Correct. We bought a product, there were tens of thousands of patients on a waitlist. You didnt invent it. You marketed it and produced it and raised the price of it, correct . Yes but im trying to explain what we did is invest in process improvements that move tens of thousands of patients off the waiting list. Going to the price the question is not the legitimacy of what you did but you didnt invent it. One of the arguments pharma makes is a cost so much to, quote, infant, they didnt happen. You saw a market and responded to it and produced it. You raised the price by 450 , 5,500 for a monthly supply of 70,000 a year. Is that correct . That sounds correct. In canada that is 1,800 as opposed to 5,500. That sounds correct. Why cant americans get that . A couple things to observe. Many medicines that are approved arent available in markets. We are throwing the word innovative around, this product was invented in 1998. This is not new. This is decades old. Why cant an american get the canadian price . This is a product we continue to invest in. It was not the product in 1998. For 1,800 you wont give the benefit of that to the United States of america and our citizens. The product a lot of evidence in the record now that when your company and other pharmaceutical companies are making the decision on pricing they have to meet revenue targets, shareholders to take care of and executive compensation to be mindful of, correct . I dont think of it in that way. You dont think of it . You get the benefit of it. Payout of 100 million to executives and it is heartbreaking for a lot of folks who cant figure out how they will get them edification for a person in their family that they love. What is the problem . A company that is selling a product in bulk to a buyer, having a discussion with that buyer about a bulk price discount . Do you have a philosophical objection to that . That happens every day in our interaction. Except with medicare. It is illegal. Would you be agreeable to having a discussion with a bulk buyer who happens to be medicare about a fair price when they make purchases on behalf of us citizens who are on medicare . If i may explain. Yes or no, you have a big buyer, to negotiate with them about the system. Medicare beneficiaries are represented by the insurance plans, for the inclusion of products. That is a know to negotiating with medicare directly. I am trying to explain what is happening already today. We think there are areas for improvement in medicare in particular, Medicare Part d, we advocate a number of those im only asking about negotiating with the medicare program, that is it. Yes or no . You and your constituents appreciate that is happening today. Change the law and make it legal . With your intermediaries, those discussions are taking place today. Im asking about a law that makes it legal. Right now theres a law that makes it illegal. It is bizarre that a bulk purchaser cant have a discussion and negotiate a bulk price discount was that the law. Do you think that is a fair lock . I dont know that i would agree with your construction of the question. We have a highly concentrated intermediary in the Senate Healthcare system, healthcare Insurance Companies and pharmacy benefit manufacturers and they are negotiating for the benefit of medicare today or across are there improvements that could be made absolutely. My time is expired and i yield back. You are recognized for questions. We can hear you. I want to make clear, talk about we want to thank the Drug Companies for what they do producing therapeutics and qualityoflife better and that. Listening to the discussion about the pricing is enough to make your head spin. Thomas kendris. [inaudible] is that price come down . What is the status of that . Price over the years. Im sorry. What im trying to understand , in other sectors our economy when you have more utilization and obviously you have yet more utilizationhe of product, you say its now cleared by fda to use and six types of cancer. You have more utilization of product. Why does particle up . Is at this process were having so much discussion and all the intermediaries and the complexity of the pricing and how it is broken . The price should come down. I think the answer to your question, congressman, is that the value went up over those years for a variety of reasons, including that patients survived longer, lived longer he became a chronic disease instead of the fatal disease. More patients were able to benefit because we got more indications onca the fda approvd over those years. I get that, some more patients are buying it. Its being utilized more. That ought to drive the price down because you can put your fixed costs over more customer base. In any other business, any other industry thats how that works. You can sell more of the product a Bigger Customer base, that drives down the cost because your fixed costs are more over the whole customer base. You see what im trying to say . Does that make sense . Apparently doesnt workes that y with the drugs. In this case i understand what youre saying but in this case for these rare cancers the commercial opportunity actually is quite small. Okay. The Patient Population is very small but the research and is high. Nt commitment that makes sense. You say 65 of the drug, you give it away, is that true . Today 55 is given away for free. Okay. Post generic approval since 2016. And i know mr. Bradway said the same thing about 60 discount so theres a lot of things going on there, the Drug Companies are doing their best to a people who need the drug to get the drugs. Im assuming does anybody go without that these drugs that need it . Even if they cant afford to pay for it. We are doing everything we can when we receive a patient complaint. We investigate each and everyone, and with a variety of ways of trying to ensure that the patient will get access to the product that they need. The other area where i see with the structure ishe broken, talk about 46 of cost is going to intermediaries, pbms, and that seems like a problem. You made a comment on one of the witnesses talked about the generics and they go to the drugstore, the patient, to make sure you get the right generic and the intermediary helpsps mae sure with venture and all that. I thought thats where the pharmacist what role do they have not . Are they getting pushed out from the intermediaries or how to set function . Certainly the pharmacist at the drugstore is not responsible for the fact that the discounts that the manufacturers are giving to middlemen and intermediaries are not being passed on to the patient. Thats not the responsibility of the pharmacist no, i understand that but e pharmacist, if they say you can get another drug, generic, alternative, you negotiate with the intermediaries, the pbms, wheres the pharmacist that into thatst discussion . To make sure the patient does get the right drug, the generic equivalent. I think negotiation you are referring to does not include the pharmacist in that case. Negotiating with the intermediary, withia the middleman, a contract, and thats how we sell it to the middlemen. Im out of time. I want to follow up on that. Do you think we should be looking into the role of the intermediaries and how it affectsff the patient and the doctor, the pharmacist, you know, make sure to get the right drug, the generic alternative and the time of the gentleman has expired but the witness may answer the question. I do, congressman. I think we should do everything we can to make sure that the discounts are passed along to patients. Thank you. Thank you, madam chair. That doesnt excuse the price gouging. You have exclusivity and so forth. Thest dont buy that i just dont buy that these price declines were part of your business plan. I think its a response to the scrutiny you are under so its nice to talk about that and kind of dance around the essence of the price gouging thats been going on for years and years but i dont trust the industry to do the right thing when we are not lookinglo at you with these ligs and so we need put more guardrails in place. This hearing is about that. This is why Elijah Cummings started this inquiry originally and we will keep following through, and theres going to have to be major restructuring of how the industry operates going forward. I know you are trying to duck and cover here but you better anticipate that thats coming because the American Public is to fit to be tied about the high prices of Prescription Drugs. Mr. Bradway, i want to talk about Medicare Part d, thats 45 million seniors who are served by that program. We are all contributing taxpayers to the strength of the medicare program. Your company has collected more than 7 billion in gross sales from selling enbrel to medical party between 20132018, is that correct . Those number sound right. Okay. And in the same timeframe you have collected about 4 billion from selling Medicare Part d beneficiaries. Medicare part d beneficiaries. Its an understatement that amgen gets a lot of business from the medical programs. Does it offer Medicare Part d comparable discounts to the discounts that you give to other government purchasers . Medicaidample, the prices that we offer are lower than medicare, as you know. It is statutorily designed to be lower than the Medicare Part d program. Its not the case that all of our government what about the Veterans Health administration . The Veterans Health program is different than Medicare Part d. Priceludes statutory allowances as well as formulary restrictions which are not part of Medicare Part d, as you are aware. Amgens discounts for the Veterans Health administration are about twice what medicare is currently receiving. Lets face it. The v. A. Is allowed to negotiate drug prices with the industry. Doesnt get that same opportunity. We dont have that ability to negotiate. Bill. Proposed a House Democrats did. This is common sense legislation that would allow medicare to negotiate directly with drug manufacturers for lower prices, just like the v. A. And the department of defense are able to do. Im not going to ask you for your position on whether we should be negotiating. I think i can guess what it is. It seems to me that if your industry, get back to the broader macro picture here. The industry has figured out a way to do business with government overseas that negotiate and are much more aggressive on behalf of their consumers and taxpayers in dealing with the industry. Your industry has found a way to be able to manage a relationship and conduct your affairs, even though you are giving a better pricing to the v. A. And dod because you are having to negotiate there. , i amll figure out a way confident, to survive as an industry, to make reasonable profits. Even as we move forward and put negotiation in place with respect to the medicare program. Thats all we are trying to do. Mitch mcconnell and Senate Republicans have stood in the way of this. They blocked the door to better opportunities for consumers and patients for years now. We are not giving up. We will keep pushing. We will do it. Every day, constituents come up to us scratching their heads, looking at us in disbelief. Why is it, in a free market economy, you cant negotiate on behalf of 45 Million Medicare beneficiaries . We will keep pushing on that. Is the only thing that makes sense. I yelled back. The gentlemans time is expired. Mr. Higgins, you are now recognized. Thank you. I appreciate the continuation of this hearing from yesterday. This is incredibly important subject matter. Finding that the arguments from both sides of the aisle are quite similar. Broadway, i will address questions for you. Businesses have costs associated with opening their doors to the public. You have to be able to cover those costs. High cost of associated associated with developing new drugs. [inaudible] what would be the result [inaudible] we have a technical problem here right now. Me try to fix that. Hes going to try to fix it. Hes back. We lost you for a while. Yes maam. I had no receiving signal. We are back on. I dont know if my question was. Eceived im afraid i didnt hear the phone question. I will do my best answer for you. Let me quantify quickly in the interest of time. I have a couple hard questions for you. We understand the basic businesscritical. What is the importance of maintaining that formula . What would happen to the development of new drugs if there were legislative action out of congress that would restrict research and development of new pharmaceuticals and restrict Companies Invested in that research from cooper recuperating their cost . What would happen to the development of new pharmaceuticals . I dont think we would see Innovative New drugs being developed for alzheimers or the many forms of cancers that remain uncured today. We all get that. We understand. We understand that there are legitimate it development of the new 21st century, hightech, very effective pharmaceuticals. We understand that there are investments in many formulas that never make it to market. That becomes part of the expense that needs to be recouped. We get that on both sides of the aisle. Im hearing the same arguments. I concur with many of my colleagues across the aisle here. , my not understand constituents do not get it, why the same formula drug, the same manufacturer across the border in canada can be three times last than it is here in the United States. My wife has ms. The pharmaceuticals are a constant challenge. Is theeives therapy that equivalent for chemotherapy for ms every six months. Every six months, the same battle with the Insurance Companies due to restrictions from the pharmaceutical companies. My constituents dont understand. I dont understand. We will fix it. Theres a bill in the senate right now that if it would be introduced in the house, it would pass in the senate. It could be law in a couple of weeks. We could really move forward and fix this. I would like the gentleman to answer one more time. Why are pharmaceuticals so much less in canada than they are in the United States . I dont get it. My constituents dont get it either. I give you the floor. You have a minute and five seconds. Explain the difference between canada and the United States. I share your frustration and emphasize empathize with those who are struggling. In theid previously, United States, . 46 of every dollar are in the hands of india and intermediaries. Not in the hands of the innovative companies. In canada, that is not the case. Canada does not have . 46 of every dollar do the companies not get to spend the canadian earnings . [inaudible] of course we do. Lets stop talking about the difference of expenses in the United States versus canada. You have a worldwide market. [inaudible] certainly not. Thank you. Your profits are your profits. Your expenses are your expenses. Why do the drugs cost so much less in canada than here . My time has expired. I would like the gentleman to answer the question. The gentleman may answer the question. Thank you. That in thet out United States, many innovative drugs are available which are not available in canada. If you look at drugs approved in the United States over the last decade that was not the question. The question was why it costs three times or upwards in the United States, where we produce the drug. Why does it cost so much less in canada . In europe, too. Earlier, we pay more for drugs in america than the entire world combined. Thats his question. Whats the answer . Thank you. , theyntries like canada are prepared to ration and restrict access to Innovative New medicines. In exchange for offering lower prices. I respectfully disagree. The answer to that question is to allow medicare to negotiate directly for drug prices with the Drug Companies, as they do in canada and europe. They are not allowed to do it in the United States. Thats one of the things many of us would like to do to lower the price for the people that we work for. I would like now to go to congresswoman schultz. You are now recognized. Thank you. I want to pick up where i left off yesterday. I asked about another nefarious tactic the Drug Companies use to maintain Market Exclusivity and skyhigh prices. This committees investigation shines a spotlight on the way that Drug Companies use litigation as a key part of their Strategic Plan to delay generic entry. I want to focus on how prices were inflated for lifesaving medication used to treat cancer. Yes or no. Novartis engaged in Patent Litigation with the first manufacturer to apply to make a generic version, correct . We did. Ok. Some pharmaceuticals challenge lissette a missy of this tactic. Rather than let a great, novartis struck a deal known as pay for delay. Under the settlement, they agreed to delay generic entry into the u. S. For six months. Novartis made 1. 3 billion dollars in u. S. Net revenue from sales during that sixmonth delay. As the first generic manufacturer, it was entitled to 100 80 days of exclusively. They initially announced that it would prices generic 30 below the price. It entered the market just 6. 4 lower than the cost. In an internally male, novartis executives held this high price as good news. Do you think delaying generic entry was good news for patients . Settled that case, we actually accelerated the introduction of the Generic Product into the u. S. E litigated that could have gone through the length of the patent which would have been another three years. Our settlement meant that the product was on the market faster, actually, 2. 5 years faster than it wouldve been had we done what you are saying other companies do. I understand that happens. In our case, we did not get paid for delay. There was no litigation that the on for years to delay generic. It was accelerated. There was no litigation because you paid for delay. Settlement [inaudible] this is not except it will. They originally said they would price their generics when they were allowed to move forward with the normal process without being challenged by novartis. They were going to price their generic 30 below the price. After you paid for delay and after you negotiated the socalled better deal for consumers, they only priced it 6. 4 below and delayed the entry into the market by six months. Patients are left holding the bag when Companies Like novartis exploit the patent system to keep their market share. 42 of Cancer Patients deplete their entire net worth in the first two years after their diagnosis. I will tell you, im a cancer survivor. I know what its like to go through 15 months of hell that i went through. In total, novartis sued at least five companies in order to prevent generic competition, leading to a classaction lawsuit that alleged that novartis was engaging in sham litigation. You know that protection of International Property rights as import for any coming. When you have Proactive Company practices that become anticompetitive, both patients and the u. S. Health care system suffer. If companies dont behave responsibly, Congress Must act to rein in this unconscionable behavior. No one should be unable to afford the medication they need to survive. Brandname companies try to delay as long as possible competition in the market. Patients need these drugs. Drugsnual cost of your went as high as 123,000 a year. Thats insanity. Its robbery. Ofkills people as a result them not being able to afford their drug. I dont know how you sleep at night. I yelled back. You for your statement. Misses miller, you are now recognized. Thank you. Thank you to all the witnesses for being here today. Im pleased that we are able to continue with this conversation because as we know, the United States is the leading global innovator for groundbreaking medicine. However, now more than ever during the covid19 pandemic, its extremely important that research and innovation is at the forefront of pharmaceutical development. While we look towards our future, we need to ensure that the public and private innovators are utilized to address situations such as a pandemic and improve access to every day, lifesaving medications. How has the covid19 pandemic highlighted the need for innovation, as we are all racing to develop Better Therapeutics and vaccines . In so many ways. Thank you for the question. Many companies are working on therapeutics. We have two of our products in Clinical Trials now. Work for they will what covid19 patient suffer. We dont have a vaccines business. We are helping other companies who do. Has agreed to manufacture a vaccine for one particular vaccine maker. Available ourking products that would be used to treat our generics products, covid19 patients. We are making them available at cost. No profit. We are making them available. We announced that a while ago. Toward the beginning of covid19. Can to find all we therapeutics. We have Research Candidates in the lab. I think about 20 Research Candidates in the lab. Not yet in clinical development. They are being investigated for possible use against covid19. Ok. Say, i alsooing to want to know. Since it is classified as a specialty medication, could you please discuss how this impacts the pace and market price and market . Is a very specific medication. Its the first targeted drug, the first smart drug as people call it. The very first one in 2001. Its a specialty medication. As i mentioned in an earlier question, the cancers that it treats are actually Rare Diseases with small Patient Populations. Cml may be the largest Patient Population. Came second. R five other rare cancers came after that. Very rare, small Patient Populations. It is a targeted cancer therapy. Well, it is a specialty product. It targets these specific cancers. Turn these cancers from even, withronic or our following product, to a disease where treatment can be where remission can be attained treatment free. The patient can stop taking it. Ok. You didnt answer how it impacted the price. Being specialty. Ill move on. I have other questions. Many of my colleagues across the aisle continue to advocate for singlepayer health care that would discourage and stifle innovation. If it were to become a reality, what with the innovation space then look like for a drug like multiple sclerosis . Can you discuss the importance of preserving the i think you are asking a question about a drug. I dont know if you wanted to direct that to mr. Trudeau or if you have a more general question you wanted me to address. More generally. I want to get into, moving from this into how the rights would affect innovation. Thats just an example. Time is expired. Sorry. I did not hear your statement. Time is expired. You may answer her question. Thank you. I think the effect would be chilling on innovation. The rights for intellectual property would have a very delirious effect on those who commit resources to risky development. Mr. Kahana, you are now recognized for questions. Representative khanna, is he there . I think i was needed. Thank you. We hear you now. Can you hear me . Yes we can. Great. I want to focus my line of questioning concerning the amgen drug. , theu could first explain its an antiinflammatory drug, to my understanding. It was introduced in 1998. Thats correct. Its one of the bestselling drugs in the world. Is that correct . It is largely for arthritis. Yes. It is for a form of arthritis known as Rheumatoid Arthritis and other autoimmune disorders. Thise primary patent on expired in 2010, correct . No. The primary patent, what are you referring to . The patent on the molecule itself . Yes. Moleculetent on the has not expired. It was granted what expired in 2010 . A different patent. Not a patent what was that on . A use patent. So that expired, correct . How do Patent Applications how many have you filed since then to try to extend the monopoly on it . I dont know how many Patent Applications we have filed. I would guess several. Thats one of your most important drugs. I would not know that off of the top of my head. 1000 . Five . I would guess several dozen. 68. If you were talking to your neighbor or someone you were growing up with, go back to high school, they say, come up with a new drug. You file a patent. Do you think any person would say, yeah she we should file 68 patents on a certain drug and extends that until 2037 . Step back as he rolled from ceo. Do you think most americans would think that makes common sense i think whats appropriate is the question of whether we are investing in innovation that deserves to be protected by patents. I get all that. I understand we need patents. From a commonsense perspective, theres a drug. People take that drug. If you were talking to an ordinary person and you said, we will file 68 patents on this drug to protect our rights until 2037, do you think they would think that that made that was logical . I think it would require a discussion about what those patents are being issued for, what innovation we are claiming, we are fortunate to have patent rights in this country protected by how much does the drug cost in europe compared to the United States . I dont have the answer to that question. You dont know how much the drug is priced in europe . Would it surprise you if you knew it was 50 cheaper for europeans than americans . No. It would not surprise me. Weve never sold or marketed the drug in europe. But you are selling the drug in europe, where you face competition. Isnt that correct . No. We dont sell the drug in europe. We dont own the product in europe. 50 . Europe, the price is it has similar competition. That has caused the price to drop by nearly 50 since 2018. Is that not accurate . I would not know the answer to that. We dont own the rights to it in europe. I understand you dont. It is being sold in europe for 50 less. You have competition there, correct . Aboutont have the facts pricing in europe. Can you make a commitment to the American People today that no american should pay more than people in europe are paying . Its a simple thing. Are you an american, sir . Yes i am. Probably. Can you tell your fellow citizens that no american should pay more for it than someone in europe . The patent in europe has expired. The european situation is different from what we have here. The european patent has expired. You think the europeans dont want innovation for their drugs . The europeans dont think they need innovation. Yet you think you need patents until 2037. Im asking a simple question. Make a commitment to the American People that no one will pay a dime more than people pay in europe. If you love this country, if you love america, you should be willing to tell americans that they should not be paying more than the french and germans and europeans. Are you willing to make that commitment today to the American People . I would repeat that in europe , the intellectual property for that product has expired. Its a simple question. You can say no. The time has expired. Are you willing to make that commitment . We dont sell it in europe. I take that as a no. [laughter] moving along. Mr. Steube, you are now recognized for questions. Thank you madam chair. Over 3. 5 million floridians are enrolled in some form of medicare prescript and drug coverage. With so many of my constituents dependent on lifesaving prescriptions, i understand the need for affordable drug prices. Despite the efforts of republicans to make progress to reform the Prescription Drug standard, our democrat colleagues refused to collaborate. They will try to suggest that hr three, a key example of partisan government overreach, would solve some of the problems that we are discussing today. This is not the case in the drug administrations a Record Number of tenaris drugs and bring down overall prescription prices. Theres a lot of work left to do. Im glad we are taking steps to discuss the situation. I hope we can move towards establishing solutions. My first question is to you. What is amgen currently doing to assist in the goal of providing americans with lower drug prices . Thank you for the question. As i mentioned in my opening statement, our net prices in the United States have decreased in 2018 and 2019. We are on track to have further decreases in 2020. In addition, weve made a significant investment in seminars. We are making available to patients and prescribers by a similar medicine for some of the biggest selling drugs in the United States at more affordable prices than the Innovative Products that they are designed to replicate. In addition, we are working with a variety of different patient assistance programs through which we gave away free drugs to those who are uninsured and cant afford their drugs. We try to provide copay assistance for those who are struggling. We have insurance plans but are struggling with making payments with their deductibles. We are seeking to make contributions to other charitable foundations that can assist patients with their medicines as well. Acrosstheboard, we are trying to do quite a lot to help make sure that patients who need medicines can afford them. I was interested that in your testimony, you stated that amgen voluntarily lowered the list price of your medicines by 62 . You describe a situation where even after lowering the price, some patients did not see a meaningful difference in what they had to pay out of pocket at the pharmacy. Some colleagues believe forcing you to lower your prices will solve our problems. It doesnt seem like that happened in that instance. Can you explain why . You are referring to a drug called which is our product designed to lower cholesterol and prevent heart attacks. It is one of our most important new medicines. We lowered the list price for that medicine by 60 in order to try to make it more affordable to pharmacy counters. Patients pay a copay as a function of list price. By lowering the list price, we were low wearing their outofpocket expenses. It found more than a year we found that it took more than a year for the insurance plans to move patients from the high list price product to the low list price product. We ran the experiment and found that it didnt work in the way we thought it would. We see this as an example of how the system is not working today for patients. One of the reasons why we think we need to reform the rebate system that exists in the United States today. Thank you. I understand there are certain payment programs in place which can help patients afford drugs. Would you be able to discuss their effectiveness in any other similar initiatives that you are discussing . Thank you. Yes. We have a number of programs designed to help patients pay for expensive medicines. Enbrel, we have copay assistance in place so that more than three quarters of the patients who use it today have a copay of less than 25. Perxcuse me, less than 50 month. Medicaid, 93 of patients are able to receive their medicine at less than 10 a month in copay. Wen it comes to medicare, have 77 of the patients being able to receive their medicine at less than 50 a month. There are examples across our portfolio of the ways that patients are benefiting from the support provided to them in order to be able to access these medicines. Does amgen utilize rebates for pbms . How does that impact patient price . Yes we do use rebates. Again, rebates are a function of list price. If we increase the list price, we increase the rebate. Why are we increasing the rebate . The answer is to secure competitive formulary positions for molecules. We increase the list price to be able to increase the rebate to the intermediaries. The unfortunate effect of that is it increases the outofpocket cost for patients at the pharmacy counter. Thats why we advocate for changes that would include passing through the rebate at the pharmacy counter. Thank you. My time is expired. Thank you for being here. Thank you. Congress will inspire, you are recognized for questions. Thank you. Thank you all for participating today. I appreciate it. I think all of us appreciate it. Many others declined the invitation. Want to start gleevec is a miracle drug. Wifermer chief of staffs died of cml. Had she lived another couple years, it would have been discovered as this miracle drug. Her condition would have been chronic and she would be alive today. The miraclereciate that this has become for leukemia patients. I would like to educate the public on what it is. It is called loss of exclusively. Staff toike for the put up a slide that the committee got that was part of a presentation that was provided to some of the staff of the company. Increase inramatic the price towards the end of his exclusivity. Between 2013 and 2015, novartiss price increase accelerated. It turned out to be a 20 increase in that drug. Executives knew that it would decrease once they lost exclusivity. They tried to get as much profit out of the drug for as long as they could. This plan was stated in internal documents by novartis executives who wanted to maximize value of brand prior to loss of exclusivity. Is that not the case . Identify the document that you have in front of you . I dont have it in front of me right now. The staff would be able to provide you that. They are document you provided to committee. Its a fact. In the last two years of exclusivity, theres a chart we can put up that shows your net revenues going from 1. 9 billion to 2. 5 3 billion. 2. 53 billion. Im sorry. Please. Increase thet price of gleevec from 20 in the last two years because you saw that there was going to be loss of exclusivity . Specifically why the increases were taken. I was not there. We will move on. I will tell you that as i was saying earlier, its indisputable that its value increased over the time it was on the market. It was always the lowest product in its class. The lowest pricing product in its class. Im wasting my time. I want to go to another line of questioning. Medicare, the federal government, paid 5. 6 billion to your company between 2011 and 2018. One third of all the money you made in the United States came from the taxpayers through medicare. Medicare right now is two years from, basically, falling off a cliff. I want to go to each of you now and ask you this question. How much money do you spend on marketing . Our marketing spend is approximately 400 million u. S. Dollars in direct to consumer advertising. 400 million. How much do you spend in europe . Im not sure i know the answer to that off of the top right now. Thank you. Get that to the committee. 2 i will i will. Mr. Bradway, how much do you spend in direct consumer marketing . Direct to consumer tv advertising, less than 200 million. How much do you spend in europe . A fraction of that. Not on tv, but in other forms. Theres no tv allowed in europe. Is that correct . I believe thats correct. How much do you spend . We dont spend any money on direct to consumer advertising. All right. Mr. Trudeau . Yes. We dont spend any money on direct to consumer advertising. My final question is, do you costt to not increase the of your drug moving forward, beyond the inflation each year . Out that weoint have decreased our prices yes or no. We have decreased our prices over the last few years. Our increases have been below inflation. Your answer is yes . My answer is, thats how we have been operating the business the last couple of years. Mr. Trudeau . Earlier, we are committing to reducing the net price to 2015 levels by the end of 2020. Thats the first year they acquired it. As to net prices, yes. Thank you. I yield back. Keller, you are now recognized. Thank you. We all need to ensure Patient Access to affordable drugs. Particularly those in rural areas that rely on safety might programs. Contract pharmacies are essential to the rural areas of pennsylvania that i have the privilege to represent. Hospitals useural pharmacies to provide access to outpatient drugs for those who need them. Many of whom are seniors or have chronic conditions. Thank you for being here. I wanted to ask you about your new Integrity Initiative to address duplicate discounts, requiring covered entities to , dataer and upload claims originating from contact pharmacies onto a new webbased platform. Your announcement augustnouncement from expresses support for a340 b program. I have concern about this threatening hospitals in pennsylvania and their ability to offer Home Infusion services, telemedicine, and expand their outpatient facilities, stretching scarce resources to patients in need. Kenris, what kind of collaboration have you had with 340b hospitals . Mr. Kendris thank you for your question. We support the intent and design helpe 340b program to lower drug prices for the net profitnd the safety net providers you were just discussing in your constituencies. They serve underserved populations in those communities, and the 340 b helps them. Program. T 340 b however, we also believe over many years there have been abuses grown into the system, and we are trying to resolve those. We have raised the problem over the years any companies have hersa. We are committed to making sure medicines are available to as many as possible through 340 b as well, but we believe the program is distorted from its original intention. If i could just jump in, i have a letter dated august 17 explaining your Integrity Initiative. My question was prior to the letter, have you talked to hospitals about this program and how it might be implemented . I believe that our staff is in contact with hospitals. We are collecting responses to that letter, and we are going to continue to work with them. If i could just jump in ive got a limited amount of time. If you are in consultation with the hospitals, when we were you planning on making this in effect and then stopping some of the discounts at 340 b hospitals . I understand they were at the beginning of this month. Mr. Kendris we asked for the data by october 1. We have not heard from all the hospitals, and we are evaluating the data we have received and will continue to evaluate that data. As we move forward, it is going to be based on what we see in the data we receive. So i hospital has not registered that data by october 1, are they still going to be able to participate . Mr. Kendris yes, we still intend to honor valid, legitimate 340b discounts, and what we will do is see the responses, look at the data, and we will talk to the hospitals and move on from there. Mr. Kendris a question on the webbased portal, is this a secure platform, where should we be concerned about Data Security should we be concerned about Data Security . Mr. Kendris i believe it is a secure platform. I can check with my team on that. Do you expect there to be an Administrative Burden on hospitals . Mr. Kendris no. Actually, we believe it is not burdensome. It is the same claims data they have been sharing with the intermediaries that we talked about earlier in this hearing. The data should be available i think it takes about five minutes every two weeks to pull this data. Mr. Kendris so you know that so you know that the intermediaries have this data already. Have you asked them for the data . If it is already available, have you looked at another way to get it . Mr. Kendris i think that relationship is between the hospitals and the intermediary, and we have to ask the hospitals for it. I can check that, congressman, but i believe thats what we have to do. I would like to end by saying that 340b drug discounts are crucial for my constituents, and we should talk about how many changes to the program should affect us could affect us going forward. We need to make sure changes are of healtht interest providers and the patients they serve. Mr. Kendris we agree. Mr. Conley, you are now recognized. Rep. Connolly thank you, madam chairwoman. Trudeau, when you acquired was the onlythat product they had, virtually. Rep. Connolly my understanding is when it first came to the market, one file cost 40. Thehe time you acquired company, that price had gone up to almost 31,000, is that correct . Mr. Trudeau that is correct. 40 my understanding is the only difference wasnt the composition of the drug. It was the status, the legal status of the drug that questcor was able to get acthar granted orphan drug status before you purchased it, is that correct . Thats not necessarily the only thing but certainly that was something that did occur that acthar was granted orphan drug status. Should we not correlate the two events with respect to the value put on a bio of the drug . How do we find going from 40 to 31,000 for the same vial and same efficacy and impact on patient, other than it got reclassified as an orphan drug which gave it a sevenyear market monopoly for the designated use, isnt that correct . I did get an orphan Drug Designation thats correct. In addition the label was updated in 2010 to reflect the current set of 19 indication. So the skyrocketing inflation in this particular drug had nothing to do with pbms, for example. It had to do with the positioning of the drug as an orphan drug, and the protection that provided, which allowed it to have highly enhanced value which made it an attractive acquisition for for the compans that not correct . De son sec filings that questcor file at the time, the company was actually an existential situation. They had an essential drug for infantile spasm, and they were potentially looking at going out of business and not being able to buy the drug anymore to the marketplace. So you came in and saved the day. When we acquired questcor and we required acts are we did three things. One, we invested in Clinical Trials andin manufacturing, two and we started engage with our customers to provide discounts and rebates, and three, we provided patient assistance programseb to minimize patient outofpocket expense and ensure patients i could benefit from acthar has good access to the drug. When you provide this drug through medicare, for example, whats the discount . We provide all of allowable discount. As i discussed earlier acthar is not in medicare formularies and certainly if there were not opportunity for acthar to get a formula position in medicare, that mightr be opportunity to provide additional discount similar to what we do in the commercial sector. With the discount in this case with respect to say medicare be about 1 . I believe most recent date is on the order of one to 2 , correct. So 31,000 drug that once cost 40, you are giving rebates to medicare of less than 1 between 20152018. Is it also true your company is looking to use this drug for other treatments, other than the original infant seizure treatment was developedt for . Company has been developing evidence to support the 19 thea approved indications that are currently on the label. If you do that, do you do that under the auspices of your protected status as an orphan drug orgy have to redefine that because it is no longer being used exclusively for the original purpose . Thehe orphan drugs scored 70 expired a number of years ago exclusivity. Acthar is not patent protected. It does not have any exclusivity under any of the traditional patents or other exclusivity such as orphan drug. Its a drug that is designed primarily for underserved patients that if a very few alternatives, relatively very small population that is very sick. I appreciate that, although i would add when you charge now 33,000 todays price, thus so much of it alternative for a lot of patience either. I yield back, madam chairwoman. Ms. Foxx, you are now recognized for question. Thank you very much, madam c. I want to thank our witnesses for being here today, for being where they are today. My first question is for mr. Kendris. Mr. Kendris, its been said that gleevec is a magic bullet for people fighting chronic Myeloid Leukemia. Can you discuss while the struggle for such a game changer why this drug was such a drug changer . Thank you for the question. Yes, it was a game changer. Was the first targeted therapy, so you may have heard the term smart drug. It was the first smart drug here it turned off a particular gene and it was able to be extremely efficacious, first and chronic Myeloid Leukemia and then Gastrointestinal Tumors and then in five rare cancers, does because it was a smart drug. It worked very specifically on these very specific cancers. By its mechanism of action, the efficacy was so high that, as i said earlier, diseases, these six cancers or seven cancers, were turned from fatal condition where a patient would have died, turn back into conditions where they lived and they were able to lead normal lives. Now we have developed a followon product which allows patients to go treatment free. Drug. Rep. Foxx what is the current list price of gleevec . Mr. Kendris the current list price is 120,000, and the net price is 85,000. The. So how much does the average patient pay for it . Well, the average out of pocket cost for part d patient, congresswoman, is 856 a year. Okay. So how does the patient how does the patient get such a discount price . I think it depends on who the patient is and what their Insurance Coverage is. Okay. The price i just gave you was for a Medicare Part d patient for out of pocket cost, 856. An annual out of pocket cost. Okay. So, a drug considered a magic bullet and basic its not quite a cure, but it puts people in remission has gone down from 120,000 to 856 for part d. Thank you very much for that. So i would like to ask, mr. Trudeau, how does your company decide the right price to set for a new drug that may truly save someones life . Thank you, congresswoman. What we try to do is we try to match the value that we believe that our products are going to bring to patients and kind of compare those two. And the values in two ways. One is the benefit that it provides the patients themselves and their families and again, were typically developing drugs for devastating diseases with relatively few alternatives and were looking at creating data, actually to see what value it would bring to the overall system. And the strug light increase the drug cost and reducing Overall Health care cost for a particular disease. The so, mr. Bradway, the Congressional Budget Office hr3 would result in cures in the nethe what would be the impact if there were 38 fewer cures in the next decade . I think thats potentially devastating. So not only devastating to the patients and their families, but i think also to the economy. I think our economy benefits from innovation that enables us to treat serious illnesses. Were seeing the benefit of that every day now, so anything that diminishes that opportunity would be tragic. Okay, very quick question for all three of you. On average how does your company or the industry bring a novel or Game Changing treatment or cure . Each one of you answer fairly quickly, please. The gentleladys time expired. The gentleman please answer her question. Please answer, mr. Bradley. Thank you for the question. We have 20 different Game Changing novels. Three position, this year were waiting for registration worthy data from one year to the next, but 22 through our history and three more were waiting for this year. Congresswoman, for novartis, it could be more, but at least last year four and this year already had two and we may have more to come this year. So its three to five, almost every year as an average, i would say. Mr. Trudeau. Congresswoman, i think from an industry perspective were trying to get as many novel life saving medicines to the market as we can. For our company specifically, were hoping to have two or three in the next two to three years. Thank you. Im sorry for going over, madam chairman. Mrs. Prescott youre now recognized for questions. Thank you so much madam chair and thank you to the witnesses for being with us this day. To answer these questions and to provide more information about drug pricing. Mr. Bradway, when we talk about high drug prices many times we talk about the list price, and large discounts are provided off the list price and then as part of the insurance design, patients are charged a percentage as a coinsurance. But my understanding is that this is always a percentage of the list price and not the discounted price. Is that correct . Do i have that correct . Yes, you have that generally correct. Okay. I know my answers probably simplistic, but what are some of the ways in which to bring down what a patient pays . Your thoughts on that. Well, weve advocated for changes to the system that would include, for example, passing the rebates that have been negotiated between the intermediaries and the companies through to the counter, and have the immediate effect of reducing the out of pocket cost for the patient in picking up innovative medicine. Secondly weve advocated for placing an out of pocket cap on patients so that after theyve paid a certain amount of medicines for the course of the year they reach a cap and no longer have to have a copay. Those are two examples of things were advocating for. Weve taken the unusual step of even lowering prices, by 60 in the case of our Game Changing medicine known as repatha which lowers heart attack and stroke. Great. But in some instances the list price may go up and there are reasons for that, but my understanding as well and i hope this is not too simplistic, but has the net price, what is actually made off the drug, gone down in recent years for any of the products that you make . Yes, congresswoman. In 20182019 and again, we expect in 2020, that the net prices for our portfolio in the United States will have decreased. So based across our portfolio, net prices have fallen. And then can you explain to us how the net prices go down, but yet, the list price may go up in many instances . Yes, so congresswoman, that occurs when the rebates that were giving to the intermedia intermediateries exceed the increases in list price. Okay and can you explain how can biosimilars reduce costs and costs to patients . Yes, congresswoman, amgen is a heavy investor in biosim lars. And weve invested a portfolio in those, we make three available today in the u. S. With a plan to add more to patients and prescribers. We provide them at a price thats a discount to what the Innovative Products are charging. And commit to having a reliable safe supply of that lower cost alternative available for patients. Thank you. Thanks so much for that. I want to ask any of the witnesses, how have your companies in the involvement, if you are in fact involved in the fight against covid19, what are the steps any of your companies are taking to improve diverse it i in Clinical Trials . Congresswoman, its tom kendris from novartis. Thank you for the question. Before covid19 hit, our Global Drug Development group was focused on this issue for our own Clinical Trials. Its a crucial step that must be taken because i think the basis of your question, im sure you realize, if a product is studied in the limited Patient Population, after its approved doctors are comfortable prescribing it in the limited Patient Population. So if its not studied in a minority population, whatever minority population that is, doctors will be more hesitant to prescribe it there because they dont have data. We recognized before covid broke we needed to change that in our own clinical style. Since the covid19 pandemic began, what weve done through our novartis u. S. Foundation is to begin the process of convening other companies and some groups like the naacp and other groups of Racial Equity to have a conversation about this very issue across the industry so we can improve diversity and Clinical Trials in all Clinical Trials of all types and to address the underlying problems which have to do with many things, but trust for patients who are in Clinical Trials would be one of those things. And thats going to take a broader conversation that were going to try and convene. The gentle ladys time expired. Thank you, madam chair. I would love to be a part of this conversation and i know the Congressional Black Caucus is concerned about this and we would love to offer any thoughts on discussion about this. Thank you madam chair for holding this hearing. I wanted to at some point ask the gentleman in another forum about how do we move manufacturing back to the u. S. Flag and what can we do to support the infrastructure back to our country. Mr. Grossman, youre now recognized for questions. [inaudible] first, i have a question for mr. Kendris, this is kind of a followup on a previous question. I almost had concerned about the 340b program. Right now there are companies out there like eli lilly, im aware theyre not here today, theyve refused to continue to offer the 340b prescription discounts to contract pharmacies that are kind of safety net hospitals and critical aspect hospitals in the communities rely on. To this point novartis is not refusing to provide discounts, but youve claims for potential duplicative discounts. And will you assure us that novartis will the not do what eli lilly has done . Our intent is to be a good steward of the program. Weve asked for the data from the hospital to help us an i void paying multiple duplicate discounts so we support the program in allowing hospitals to use our discounts to provide the patient care that was originally intended by 340b. Although we dont support allowing intermediaries and middle men to profit. The next question for really any one of you, maybe i should pick somebody else, maybe pick mr. Trudeau, specialty biologics often treat particular diseases with limited Patient Populations. Evidence showing that introduction of biosimilars in the market reduce that cost for patients. Since all of your companies have biologics on the market, how have biosim lars impacted the market and have any of you tried to limit to stifle competition and a followup question, how can congress incentivize companies to bring more buysim lars to the market . Congressman, new for the question. Were focused on the best interest of patients. Meaning that patients have access to possible medications they have for their conditions, as well as possible cost. We also support competition, biosimilars in some markets have been shown to enhance competition. Our company does not produce biosim lars so that might be a question better directed to other individuals. Congressman, we Scott Bradway from amgen, were in Biosimilar Market and weve spent to develop capabilities in the u. S. And this will provide alternative choice for patients and providers and so far launched three medicines. The first two in the cancer field where weve had very strong receptivity to our Product Offerings of the so were providing those at a discount to the originator products and we seek significant on market already after a short time being on the market. We think that much more of the industry as created by the legislation, is working effectively. And the u. S. Is nearly a dozen similars and expect this again to be an important opportunity for patients providers. A quick yes or no question on this. President trumps fda released a biosimilar action plan which seem lined the action to approve biosimilars. We believe this has approval of more buy biosimilars than the obama plan. Would you agree this is saving patients money . I will give you a different question, do you agree, you know, trying to get more buy similars to the biosimilars for the president s plan is saving money . Im not sure that i know the president s plan. We have a Generics Company and a biosimilars company. We brought the first biosimilar to market in 2015 so we certainly support biosimilars and as far as im going to give you a quick followup question because sorry. Im going to be introducing a bill or have introduced hr8190, a biosimilar insulin access act which will expand on what President Trump has done. Are you guys pledged not to get in the way of any of expansion of biosimilars . Is that something youre going to fight or do you will you agree that we should be getting more biosimilars to market . Congressman, its tom kendris. I think that generally speaking we support more biosimilars coming to the markets. Santos has biosimilars in its pipeline and is actively trying to get it to the u. S. Market and help patients and reduce Health Care Costs in the u. S. Thank you. The gentlemans time is expired. Representative raskin, you are now recognized. Thank you, madam chair. Mr. Kendris, our investigation found that Drug Companies use anticompetitive tactics to prevent generic competition to prop up profits. Novartis was in pay to delay, and they delay the entry into the market and novartis struck a deal with the first generic competitor to postpone its entry by six months. This is on gleevac, the generic originally announced it would price its product 30 below gleevac, but then they ultimately set the price at only 6 below gleevac. Experts say that these various maneuvers employed the six month delay and a six month duopoly resulted in 700 million in excess costs to payers alone in a single year, 2015 and 16. And you collected your highest net revenue from gleevac during that twoyear period when more than 100 novartis employees collected more than a Million Dollars a year and the ceo, i understand, earned a total of 72 Million Dollars that year. One strategy of anticompetitive exclusion is to engage in restrictive contract with health plans and formsies to ensure that those health plans and pharmacies only cover or dispense the branded or nongeneric form of the drug. These are called National Drug code blocks on generics. Internal records show that novartis developed an ndx block strategy. Novartis offered higher gleevac rabies rebates or discounts, that gleevac instead of a generic version. Mr. Kendris, do you believe that ant blocks are anticompetitive . No, i think that saved the health plan and the brand is cheaper than the generic in that case. What we did, we lowered the price of the branded product with steep discounting and we competed with generics on price with our brand. Well, why did you need to institute a formal block to keep the generics from being in competition at that point . It wasnt to prevent generics to be in competition. There were physicians and patients who wanted branded gleevac and in order not to be automatically somebodies tuted at the pharmacy counter, those patients wanted gleevac and these pairs who we contracted wanted to get gleevac brand to them. Well, you actually promoted to consumers the idea that they should only order gleevac. Tell us about your dispense as written campaign for doctors to write dispense as written. Thats for doctors and patients to know if they wanted branded gleevac, and many patients who are stable from cancer, want the original and not the generic, they want the doctor to write the gleevac brand or they will be all the matically substituted at the pharmacy. Thats what dispense as written means and its for the patients and the doctors who would like to keep a patient on gleevac as opposed to being switched to a generic automatically at the pharmacy. Dont you try to influence consumers or patients in that choice where you say, its your right to ask your pharmacist to have gleevac, dispense as written. And generic your medication may change shape, color size, from month to month. Arent you out there campaigning against nen generics and making the patients believe they need to get the branded pill . Look, congressman, we have our own Generic Company that sells thousands and thousands of generics every year. In fact were the second largest seller of generics in the United States so we dont do what you just described. Were reaching out to patients and doctors who already want to stay on the brand and were educating them how they have to do it. They will not be able to stay on the brand if they want to unless they write a prescription for gleevac. Did you pursue the blocks in order to keep novartis market share up even with agagenerics the market even though you went for the strategy. No, thats are the contract and the payer. Madam chair, i just think that these blocks were tremendously profitable for novartis and the cost is not paid by the company, its paid by the patient, its paid by medicare and all of us through increased prices. But thank you for your testimony. I yield back. Thank you, youre now recognized. Thank you, madam chair, my first few questions will be addressed to mr. Broadway with amgen, you explain that net process are not the same as list prices. You said that part of the list price calculation includes benefits to patients. Can you quickly explain how youre able to calculate that . Yes. The list price is the price that we establish, the rebates are the price that we pay to the intermediateries creating a net price. Its the net price that we receive and the patient receives a copay as a function of the stated list price. Well, patients no doubt benefit from these life saving drugs. I think you can understand that patients have a hard time understanding that cost benefit calculation. How can patients be sure theyre getting the best price available for their medicine. Thank you, congressman, i think thats an important issue. The issue of transparency. And its very difficult in the system thats in place today. Its difficult, for example, because patients dont get the benefit at of the rebate at the counter. Its hard for a patient to have an idea what is by their planned sponsor and the company. So its a challenging problem, even for the initiated patient who wants to try to get the answer to your question. We and others publish our list prices, for example, on the website for our individual medicines. We provide an indication of the range of rebates and therefore, give a sense for what the net price is, but our net price is different for individual payers based on the contracts that weve negotiated with each of them individually. Well, i spend a lot of time in the hearing yesterday talking about my dissatisfaction with the pbms and that process so im going to shift gears and mention that for a second. Mr. Den dris mr. Kendris with novartis, this is a complicated process. President trump in one of his recent executive order recommended that they pass the rebates on to Medicare Part d patients, but this covers only a small percentage of the Patient Population. Mr. Kendris, what can we in congress do to ensure patients are benefitting from these discounts, rather than middle men like pbms . Ranking member comer. Thank you for the question. I think one answer to your question quickly, would be transparency. And i think that we need to encourage Patient Access and affordability and we can give access to value based product with low cost sharing and we dont restrict through formulary and we can cap what they pay in out of pocket costs for Medicare Part d and we can require plans to share some of the discounts and they negotiate for drugs with the patients. Those savings should be passed along to patients at the pharmacy counter. Those things, those three things would encourage Patient Access and affordability. And i agree 100 with your statement about transparency. Who is the agency or bureaucracy in charge with overseeing the pbms and transparency, who holds them accountable . Educate me on that. Thats a very good question, Ranking Member comer and i think that perhaps hhs is the answer. Perhaps hhs should be overseeing the pbm and to some exsent they extent they probably do and i think the oversight and changes in passing on discounts at the pharmacy counter is something that needs to happen and maybe its hhs and maybe its a different approach. Im not sure. And i think thats something, madam chair, i mentioned to you after the hearing yesterday. Its something that we should certainly look into more when were going to continue our efforts to investigate the out of control costs of drugs for americans. One other thing, and my time is running out. But just to touch on what representative keller mentioned with the price difference between europe and the United States. I dont think that any of us like that. But im curious, how much do you spend on litigation in europe versus the United States . Is there a big difference in your litigation costs . I believe, i believe there probably is. I would have to get back to you with the Ranking Member comer, but theres probably a if both of you all could get that back to me, i would just love to know out of curiosity. Madam chair, i yield back. Now recognized, the vice chair of this committee. Thank you so much. Mr. Trudeau, i want to followup on something you should to chairwoman maloney when she asked you about the cash cow slide. Can we put up the exhibit 68 again, please . So now, lets just review the slide. It refers to actar. And from the title here, a cash cow. Now when chairwoman maloney asked you about this, you downplayed it. It was just a the company doesnt view this drug as a cash cow. Do you stick with the assertion that your company does not view actner as a cash cow . Yes, i do. Okay. Thank you. Are you familiar with the term synonym . Synonym. Cinnamon . Synonym, yeah, basically the term that basically refers to one word means the same thing as another word, right, ordinarily the same thing. Are you familiar with that concept . I am, sir, yes. Okay, so we obtained some emails that i want you to take a look at and its from your companys execs. In fact, one of these email chains your Corporate Executives have a discussion about the exact term and i quote do we really want to say cash cow to the board . Obviously recognize how bad this sounds and your companys chief commercial officer responds in his own email wrote and i quote, instead of cash cow, i will replace it with profit maximizer. So, replacing one term with another term, cash cow, with profit maximizer doesnt change the intent of your company, which is to make as much money as possible, right . So mr. Trudeau, you were under oath when you answered chairwoman maloneys question. You swore to tell the truth and whole truth. Were you trying to mislead the committee . Not at all. We dont think about act ner in let me reclaim my type. Can we put up the next slide, this was the final presentation prepared for the board and includes the term profit maximizer. Do you deny that, mr. Trudeau . No, i dont. Okay. So that was the whole point, that miss maloney was trying to make, that your companys trying to maximize profit, then you denied it, and then you downplayed this document. You said you removed the word cash cow, but there was no question that you were trying to maximize profits. Cash cow and profit maximizer, you just replaced one term with another, but the intent was the same to make the most money. I think you owe the chairwoman of this committee an apology. How do you respond . Very clearly, sir, these were options that were being considered, but i think the actions are what you need to focus on well, ill going to reclaim my time. Do you agree that the main purpose, you replaced your team replaced one term with another. Right, one term with another and it was the same intent to maximize profit, right . Id like to put up and your team, your company has brought in nearly 6 billion in net sales from actar. Id like to put up exhibit 76 on the screen, please. The presentation emphasizes the merger was a quote, unique opportunity that should be pursued urgently because the deal would, quote, provide rapid revenue and earnings growth. In fact, soon after the division acquisition, your executives both did about how well the strategy worked, and highlighting to shareholders that actar it contributed 123 million toward net sales in only six weeks. An investor briefing in october 2014, mr. Trudeau, you personally explained that your companys primary goal was to deliver, quote, top level shareholder returns by focusing on highly profitable specialty drugs like actar. Do you believe saying that . I dont recall specifically, but it wouldnt surprise me if i did say that. The reason why, just changing the term from cash cow to profit maximizer, doesnt change your intent. The intent of your company is not to help the bottom line of the Health Outcomes for the American People or for the public in general, its to maximize your profits. Your company then proceeded you already had this drug and it was highly profitable and you proceeded to increase the drug by norman 82,000 per vile, additional 26 increase so i believe that you misled this committee. I believe that you owe the chairwoman an apology, and i believe that you owe the American People an apology as well. With that, madam chair, i yield back. Gentleman yields back. Mrs. Tlaib youre now recognized for questions. Thank you so much, chairwoman. Lets talk about the sham patient assistance programs which we hear a lot from Companies Like yours. I know because, you know, many of the big pharma Companies Use many of these programs in some ways to hike up prices so theyre completely unaffordable and then they offer these charitable programs so that patients can afford the very drug you have made unreasonably expensive. So these socalled fake assistance programs do not get to the underlying problem and many many constituents tell us, was just that these drugs simply do not have be to expensive. That its a choice, a choice that every ceo testifying today makes. And its really a choice that is killing people, in my district and across the nation. So i know you all know theres a lot of documents that this committee has obtained. These are not things that are coming and falling up and theyre not theories, theyre documentation that proves to what were trying to explain to all of you is that these schemes again are hurting people so the internal documents obtained by this committee through investigation show that those socalled sham, theyre socalled sham Charity Programs are money making themes. Lets start with novartis, in one of the letters to the committee you stated that novartis used programs to quote, every patient who needs gleevac has access to it. Would you consider novartis copay and other assistance programs a Financial Investment or charity . Congresswoman tlaib, we are treeing trying to make sure that patients get access to gleevac, when they cant afford it we make sure in a variety of different ways, thats one of them. So the documents dont match up with what youre trying to say here. And the documents obtained novartis strategically, this is a scheme here, you all used it, the Copay Program to drive the demand for gleevac, particularly after it began competing with generic versions of the drug. I would like to put up exhibit 15 up on the screen. So it appears to be an analysis of when to launch the socalled enhanced Copay Program anticipation of the generic competition. Can you see that, mr. Kendris . I want to direct your attention to the table. Yes, hold on one second, congresswoman, im getting a paper copy of it because i dont see it very well on the screen. But i have it now. I think on the top, i dont see it on the screen, but its the one that youre referring to, does it say the operatal scenario is a 6 month preloe start . Yes and into the enhanced program, or the scheme, that it would return 5. 1 and 8. 9 dollars. That means for every thousand dollars put into this Copay Program, you would expect upwards nearly a 9,000 in profit. Am i reading that correct . Im not sure listen, you took an oat to be very specific. Sorry. Youre seeing this investment in your own charts in your own company to this committee youre literally making 9,000 in profit when you insert 1,000 into the sham charitable programs. Congresswoman im not sure i understand this chart the way youre describing it. According to the slide. Sorry. According to the slight. The optimal scenario was to launch the Copay Program six months before your company lost exclusive rights to the drug in a generic and then a generic version would become available. Thats because launching six months prior would result in the greatest return on investment by keeping patients on gleevac before lower cost generics entered the market, does that sound right to you . Okay. Congresswoman, im looking at the chart and i see what youre saying and i would like the opportunity to take this back and to lets look at another document if we may. 2013 novartis executives appeared to have conducted a review for the patient assistance program, the scam. Let me put that document on the screen, exhibit 14. Hope you can see that. As you can see executive noted highlighted for patients who have higher copays and they may not be on the drug. Because cancer drugs are necessity for patients there is necessary sensitivity to price increases, what that document is saying basically, Cancer Patients will keep taking the drug because they simply have no choice. Am i reading that right, mr. Kendris. Congresswoman the next sentence says something that i also think is a fact that Research Shows theres an upper limit of oop costs at which patient adherence begins to decline so you can try to mislead the public, and. Im not trying to and mr. Kendris, your own documents are basically saying, which is sickening, it doesnt matter because she is are life saving drugs lets go ahead and increase prices even though you dont have torques you ha to, y increased the of the prices on patient with cancer and socalled assistance programs and mislead everybody and try to have citizens and i yield. The gentle lady yields. Mrs. Porter, youre recognized for questions. Thank you for being here. I want to hear about inknow he evaluation, as you know this is the second day of hearings with ceos of Big Pharma Companies and weve heard so much information about the real cost of research and development, r d. Mr. Bradway, what was the revenue. 23 billion dollars. 23. 7 billion. How about 22018 . I dont have that to hand. Thats okay, i have a handy, 22. 8 billion. 2019, 23. 4 billion. This totals up because i know its hard to do math on the fly, to 69. 9 billion dollars. Thank you. Mr. Bradway over those three years that were talking about, 2017 to 2018. How much of its own revenue did amgen invest in that really Important Research and Development Work . Approximately 10 billion. Okay. So r d taking you at your word here was about 10 billion, great. Thats a big number. Investing in r d dwarfs some of your other expenses, right . Its one of your largest expenses . Thats correct. How much did amgen spend on lobbying over that same threeyear period . I dont have the exact number, but its approximately 10 million a year. Thats correct. 32 32. 5, 2 million on lobbying. How much on how much did amgen pay for the salaries of the top five, the top five executives over this twoyear period . Oh, goodness, its about i would guess 6 1 2 million per year so 13 million i would guess. 13 million, would you like to revise, take a look right here, sir. Sorry, you asked salary, i gave you an answer to the question about salary. Oh, im sorry. Let me rephrase. How much did amgen spend on compensation for the top five executives. I think thats the number youve written on the board. Could you say that number for the committee . Yes, 100 ill assume that your number is correct, 124 million. Wonderful. And then my final question is how much did amgen spend on stock buybacks in that same two periods, same twoyear period. Im sorry, two year or threeyear period. Right here, threeyear period, sorry. Threeyear period, i dont know the number off the top of my head, but includes the period where tax reform was implemented so i would guess its on the order of 30 billi billion. Right around this number, can you say it im not a witness so i cant testify as to your state the number. The number you have written is 28. 6 billion. Amgen you spent more than double, almost triple. 10 billion is roughly one third of 28. 6 billion. Yes, but what you havent indicated there is the capital that we allocated to acquire research and development externally about 19 in that period. And you make an antiinflammatory drug called embril which is used to street conditions like arthritis. Mr. Bradway did amgen do the research that led to the creation of embril . No, not the original discovery. Weve done billions of dollars of work on yes or no, did you do the research that led to the creation of embril . Congressman, i stand by my answer. The embril that patients use today did we do the research and development that patients use today, absolutely, quit a bit. Did you run overseas trial of the drug, did any executives of amgen help invent this breakthrough drug. No, i did not. I was not involved in Breakthrough Development of the drug or discovery of the drug. In fact, embril was invented. An academical Medical Center and funded largely by taxpayers, amgen later acquired the tech company that embril. Amgen did not directly pay for the discovery of embril, is that correct . No, your statement is wrong. Embril was discovered by scientists at a Company Called genentech. What id like for you to do mr. Bradway, please explain why you and four other executives deserve to pay yourselves tens of millions each year. Ive got an empty white board ready to take down your justifications. Right, i recognize that thats a considerable sum of money and would of course point out that i dont have any direct input to my compensation, thats derived by the board. And its forward to a vote of the shareholders. Overwhelming ly supported the package by reclaiming my time. Do you not know why youre getting hundreds of millions of dollars tens of millions a year, what is the justification . Id like to show the American People. Our compensation is consistent with competitive positions at other companies. Mr. Bradway, reclaiming my time. The other guy gets paid too much, too, isnt a justification, id like to know to hear what you do to deserve 124 million in salary and the gentle ladys time expired and the gentleman my respond to her question. More than 90 is based on Performance Measures including how our shares perform relative to the market and our Compensation Program is aligned with that of our owners, our share owners sore a 0 large part of my compensation reflect the fact that weve been creating value for share owners advancing innovative medicines like we have marketplace today. I wish you would focus on creating value for sick patients, mr. Bradway, not just your shareholders. I yield back. The gentle lady yields back. Mrs. Kelly you are new recognized for questions. Mrs. Kelly. Thank you, madam chair. I want to take a moment to address an argument weve heard a lot about today, that pharmacy benefit managers are responsible for rising drug prices. Mr. Trudeau id like to start with you first. Average net Price Per Unit the price of a drug after subtracting rebates and discounts, and every year since im not going to pronounce this right, since mallinckrodt. And this graph watts created using data provided to the committee. You can see on the chart, 2015, the average price was 30,000, 2018, 33,000. Basically increasing by nearly 3,000 in three years. And that is after factoring rebates and costs, is it fair to say that the advice increased at a faster rate or discount repated to pbms or others in the describe chain . I dont believe thats true. Weve actually increased discounting significantly to our customers well beyond the rate of increase that shows there. Okay. In addition, data your Company Provided to the committee revealed that the rebate that paid medicare for actar and the efforts to perpetuate this m misleading narrative and the rebates to medicare averaged less than 1 , by comparison to tricare average more than 26 . Turning to mr. Bradway. Embril, again, the price of the drug after subtracting all rebates and discounts, 2014. And same is true for another drug, amgen increased the price by 34 between 2015 and 2018. And finally, to you mr. Kendris, data provided to the xhoo it revealed that between 2011 and 2015, the net price of your cancer drug gleevac increased by double digits annually. At the same time the data suggests that the rebates novartis paid for gleevac lower than big pharma, lead the public to believe between 2015, 2019, before they lost exexclusivity, and related to gleevac sale was just 15 of total gross sales. Lets be clear pbms play a part of the current Pricing System, we wont deny that, but its equally pointing the finger at pbm is a way to deflect for their own actions and it simply cannot be as if theyre responsible for all of these price increases. I dont know if anyone wants to comment on that. Ill yield back my time. The gentle lady yields back and the chair now recognizes mr. Comer for his closing comments. Thank you, madam chair, ill be brief. Weve had two long days of hearings and hopefully in the future we can come together and instead of identifying all the problems, we can try to work towards some solutions to those problems. I want to mention that many of the problems that my friends on the other side of the aisle mentioned today can be solved in hr19, our bill, the republican bill. For example, representative washerman schultz was mentioned several times pay for delay settlement. And we dont like that. I dont think anybody likes that. Thats bipartisan and thats in our bill hr19. So i think theres an opportunity to Work Together on this issue moving forward and i certainly hope that we can do that. With that, again, appreciate the hearings that we had. I appreciate all the witnesses that came before us over the last two days and hopefully we can Work Together moving forward because this is an issue the American People are demanding congress address and i think that we can do that and i hope that moving forward we work in a bipartisan way to have solutions to the problems. I yield back. The gentleman yields back and i thank the gentleman and i can assure you that my colleagues and i are open to working with you for solutions in solving this problem, but before i close id like to enter into the record a letter to the Committee Received from the mayor of rockford, illinois. Thomas mcnamara. And explains the barriers City Services with the funded of 500,000 that it spent on actar and he mentions installing 350 street lights, planting 2000 trees or replacing two miles of sidewalk. I ask unanimous consent to place this letter into the record. Without objection, so ordered. With that, let me close by thanking the six, all six of the ceos who agreed to participate in these twodays of landmark hearings. And id like to thank the staff for all the work that they did in preparing these hearings. To me, the singlemost remarkable revelation coming out of these hearings is the claim by Drug Companies that they need to raise their prices for research and development or to promote innovation. This is completely and utterly false. It is baseless and i think miss porter underscored this in her comments. The internal documents that we obtained show that the pricing discussions going on inside these companies have nothing to do with research and development or promoting new innovation. They show a meticulous, even ruthless focus on squeezing every possible dollar out of the pockets of the American People and the american taxpayers. Whether you call it a cash cow or a profit maximizer, it shows that these Companies View these drugs in a profitbased basis, in a profitbased terms and that was clear in the documents we saw. I want to make clear, also, that these drugs are life saving and life changing in many, many ways and were grateful for that, but we cannot let these Drug Companies continue to target our country, the United States of america, for the biggest and deepest price increases anywhere in the world. Not everyone knows this, but we have a law on the books in this country that bars our country from negotiating directly with Drug Companies to lower prices for medicare. One of the biggest drug purchasers in the world. Of course the Companies Know this and they exploit it to the tune of hundreds of billions of dollars and thats what these new documents showed. These Companies Make profits in europe where they negotiate and candidate where they negotiate and all sorts of Different Countries that negotiate, but we in america, we have our arms tied behind our back and were not allowed to negotiate to help our people. And that is not a free market. A free market is when two people or two parties come to a table and agree to a price. One is willing to pay and the other is willing to accept. Our system is the opposite of a free market. It lets the Drug Companies increase their prices over and over and over again. Dozens of times, by thousands and thousands of dollars as we heard today and saw in the documents. This is absolutely unsustainable. We need to pass the legislation that Elijah Cummings examined and that President Trump used to support before he broke his campaign pledges. We finally need to let our government negotiate to remove this block that does not allow us to be treated fairly. Were exploited in the system. Now, i want to let members know that these two days of hearings will not be our last. We have heard testimony from six ceos, but we have been investigating several other companies as well so i will keep members appraised of the additional hearings potentially when we return in november and in december and finally, i want to thank the members of our committee on both sides of the aisle for this is a critical issue for all of our constituents and i believe all members demonstrated your command of the materials and your desire and drive to help your constituents and to help the American People. I sincerely hope we can take these findings and move forward on real legislative changes to help American Families together. And with these two days of hearings, i again thank the staff that has worked incredibly hard on this and this hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] the [inaudible conversations] [inaudible conversations]. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]