Let me also make a few reminders for these members appearing in person. You will only say members and witnesses appearing remotely on the monitor in front of you when they are speaking and active speaker view. A timer is visible in the room directly in front of you. For members appearing remotely i know you are all familiar with the webex 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 webex set the active speaker view. If you have any questions about this please Contact Committee staff. Second, we have timer that should be visible on your screen when youre in the active thumbnail view. The house rules require 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. Since i will recognize members verbally and let members retain the right to retain bracketing verbally. Members will be recognized in seniority order for questions. Lastly, if you want to be recognized outside of regular order you may identify that in several ways. You may use the chat function to send a request. You may send an email to the majority staff or you may unusual mic to seek recognition. Obviously we do not want people talking over each other, so my preference is members use the chat function or email to focus facilitate formal verbal recognition. Committee staff will ensure i am made aware of the requests and i will recognize you. We will begin the hearing in just a moment when they tell me they are ready to begin the live stream. The committee will come to order. Without objection, the chair is authorized to declare a recessf the committee adding time. I now recognize my soul for an Opening Statement. Good morning and welcome to day two of our landmark series of hearings with drug company ceos. Yesterday we heard from the ceos of three Drug Companies, and what we learn was shocking. Drug companies are hiking the price is higher and higher and placing an even greater burden on the very patients who rely on these drugs to survive. We learned these skyrocketing prices are simply unsustainable. Both for Government Programs and american families. We also learned claims by Drug Companies that their price increases are necessary for research and development are completely bogus. The internal Company Documents we obtained show Drug Companies hike prices almost entirely for selfish reasons. They do to meet Internal Revenue targets or to increase their own bonuses in some cases. Drug companies spend some funds in research and development but nowhere near the windfall profits they are bringing in as a result of their massive price increases. Finally in the cases we examined yesterday we learned that Drug Companies target our country for their biggest prices, and for the 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 federal government to negotiate directly with Drug Companies could lower spending on brand name drugs by about 456 billion. So let that number of sink in. Its nearly half a trillion dollars. Excuse me. Today is day two and we will hear from three more executives. Well hear from the ceo of amgen which repeatedly raised the prices of two drugs, enbrel which is used to treat Rheumatoid Arthritis and other painful inflammatory diseases, and sensipar which is used to treat the effects of kidney failure and parathyroid cancer. We will hear the top u. S. Executive from novartis about the companies massive price increases for gleevec, a drug that treats chronic Myeloid Leukemia, a rare form of cancer of the blood and bone marrow. And well hear from the ceo of trend night about the pricing of its drug called h. P. Acthar gel which is used to treat a seizure disorder in little babies. Record to keep our Opening Statement short because we want to hear from the testimony from our guests but now i would 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 in yesterdays hearing. First, republicans have introduced legislation, h. R. , full of bipartisan provisions that the house could pass today and could be signed 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 Innovative Products are accessible and affordable for all americans. Third, while brand pharmaceutical manufacturers play significant role we must look at the entirety of the pharmaceutical marketplace including pbms, health insurers, generic manufacturers and wholesalers to truly solve this problem permanently. At this time i would like to yield the balance of my time to mr. Massie. Thank thank you, ranking memr comer and thank you, madam chairwoman. I anticipate todays discussion and testimony will involve the u. S. Patent system, and so in this Opening Statement i want to read that patent and copyright clause thats in the constitution. This clause was so uncontroversial that it was accepted by all of those who were drafting and voting on the constitution unanimously and without debate. It says the United StatesCongress Shall have power to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. Some people who havent studied this issue too much think that perhaps patents are the reason that drug prices are high but the reality is on a lot of the drugs the patents had expired and theres no restriction from the Patent Office to keep somebody for making the generic versions of the drug but there are other impediments not involved with patterns that stop these generic some coming to market some i hope you find out what those are about and then i also want to say that our Founding Fathers were really smart here. They knew that if the owner at a limited time to recoup their investment, the inventor and the other, then they would be able to find the capital and the backers to develop these ideas and discoveries. So even if she had scientists who would come up with new drugs for free, lets say they just gave the idea away, these new drugs require millions, hundreds of millions in some cases of development in order to bring them to market and without a patent which is equivalent of a deed that could deed to a piece of property, nobody would develop a piece of property if they couldnt get secure title to the property. Patents work the same way. They allow the investor to get secure title to the idea so that they can then invest the money that required to bring that to market and to test it to make sure it is safe for all human beings. I look forward to robust discussion on that and with that i yield back. I want to thank my colleagues and with your indulgence because of my call i would like to just leave 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 mr. I agree we should work on this issue. Its important to the American People, should be bipartisan but since you mention your bill im image in mind, h. R. Three which would merely allow our country and to negotiate for a lower drug prices for medicare as we do with the veterans association. Its passed the house and is now in the senate. But what i would really like to do right now is to honor and remember our former chairman, Elijah Cummings, who launched this investigation 18 months ago. His number one priority than an hour 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. And if we could now play that video and move quickly forward. I 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. He 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 he told me that drug costs 10,000 every month. Im so grateful for gleevec. It keeps me alive, but the price tag constantly hangs over my head. Instead of just focusing on my family and my health, i also have to carry around the burden of what would happen if i couldnt pay for it. I have no choice, but you all have a choice. You can take action to lower drug prices hit because of drugs dont work if people cant afford them. Hello. My name is carter and on the gastroenterologist. I take your babies suffering suffering from a seizure disorder. The best treatment is h. P. Acthar gel. Without this medication children are more likely to be lifelong uncontrolled epilepsy thank you. Thank you very much and i will now introduce our witnesses and we are grateful for the attendance today and for the testimony. Our first witness today is mr. Roberts bradway was at the chairman and ceo of amgen. Amgens hills antiinflammatory drug enbrel and the Chronic Kidney Disease drug sensipar. Then we will go to mr. Mark trudeau who is the president and ceo of aliquot pharmaceuticals. Mallinckrodt sells the antiimmune inflammatory disease drug h. P. Acthar gel. Finally well hear from mr. Thomas kendris who is the u. S. Country president of novartis. Novartis sells the cancer drug gleevec. The witnesses will be unmuted so we can swear that in. Please raise your right hand. [witnesses were sworn in] let the record show that the witnesses answered in the affirmative. Without objection your written statements will be made part of the record. With that, mr. Bradway, you are now recognized for your testimony. If you could unmute your mic. Thank you. Good morning, chairwoman maloney, Ranking Member comer and of the members of this committee. My name is bob bradley and the and ceo of amgen, a leading Biotechnology Company based in Thousand Oaks california. Before i begin my formal remarks want to does the work of Elijah Cummings on drug pricing issues as chairman of this committee. I know he is sorely missed by his former colleagues and want to recognize his work dedicated to improving access and affordability for patients. For 40 years amgens unwavering mission has been to serve patients. We do that through innovative medicines and highquality biosimilars the treatment of the worlds most serious illnesses. We are also engaged in the fight understand, treat and prevent covid19. We employ nearly 14,000 people here in the u. S. When we conduct the vast majority of our Cutting Edge Research and ecofriendly manufacturing. Amgen is deeply committed to meeting the needs of every patient every time. Therefore, its 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 2065 below market expectations. We also made a medicine proven to reduce heart attacks and strokes in patients with stubbornly high cholesterol levels available at 60 reduced price. This helped lower outofpocket costs of patients especially seniors on medicare. Over the last two years we launched biosimilars to some of the top selling medicines in the country and plan to bring more to market over time surviving patients with more Affordable Treatment options. Over all the average in that price for medicines across our entire portfolio in the u. S. Declined in 2018 and 2019, and were on track track for further declined this year. Enbrel is a a medicine treats patients with autoimmune disorders such as moderate to severe Rheumatoid Arthritis. Enbrel highlights the tension between ensuring entering patie access to critical innovative medicines and outofpocket costs they are often required to pay. The physicians tell stories of how the waiting were cluttered with canes, crutches in wheelchairs. Thanks to enbrel, patients have been given a new lease on the life. Since the approval we have invested hundreds of millions of dollars instead of traditional uses and to make it more patient friendly. As an example we recently introduced an easytouse self injected device design for invocations whose disease has sapped the strength in their hands. But the innovations like this cost money and that is partially why we have increased the list price of enbrel in the past. What has driven up the list price more than any other factor is the pressure we face to match the price increases of the market leader. I know this sounds strange, companies and 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 kicked off formulary requires matching and competitors high price. These higher prices increase the already significant rebates by the middlemen who largely dictate which medicines patients can access, regardless of which medicines their physician prescribes. Or still these rebates paid on all our medicines do not translate into lower costs for patients. Thats because they dont get passed on the patients at the pharmacy counter. Theres no question the present rebate system is dysfunctional and does little to serve the very patients it was designed to benefit. As we wrestle with the worst Public Health and Economic Crises of our lifetime, the time is now in the place is here to craft the changes that are needed. Innovative biopharmaceuticals are part of the solution to the burdened serious diseases imposed on patient and society. Amgen can strive for reforms to improve affordability for patients. However, the 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 to help improve access and affordability to our patients without stifling innovation. There are so many diseases to confront inpatients and patience till. If we all stay focused on whats best for patients, im confident we can independent better place. Thank you for the opportunity to speak with you this morning. Mr. Trudeau, you are now recognized. Chairwoman maloney, Ranking Member comer, members of the committee anchor 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 crew i worked on pioneering treatments for several clinical disease including some of the very first for hiv. The leadership role that ive had and other regions of the would have led me to better understand both the strength of the u. S. Healthcare system and its challenges. Ive devoted myself to this industry because like the nearly 3300 employees of mallinckrodt under the therapies we make and group the lives of patients and families. This has been here at unprecedented challenges. When covid19 hit we mobilized to identify therapies to combat the disease. We consulted with the fda and nih regarding potential evaluation of our inhaled nitric oxide turkey for the treatment of covid19 related respiratory complications and supported and independent Clinical Trial being coordinated by mass general. As of today nearly 250 hospitals and u. S. Health systems have used this as an experimental treatment for covid19 patients. We also secured our supply chain to avoid manufacturing and direction for the critical medications we make and donated 54,000 pieces of ppe, several ventilators and more than 16,00r manufactured in our missouri play. We also engage with members of congress and federal agencies like barton to discuss leveraging our extensive experience making high quality u. S. Made generics at our plates in missouri, new york, illinois and North Carolina to bring home the manufacturing of essential medicines and active pharmaceutical ingredients. To date we are the only american manufacture of acetaminophen a key active pharmaceutical ingredient in many medicines which would probably make in illinois and North Carolina. Our result of patients has never been stronger and would understand and share the American Peoples concerned over the availability and affordability of Prescription Drugs. Mallinckrodt is steadfastly committed to knocking down barriers to patient access. Thats particularly to with acthar jill, a complex pharmaceutical product fda approved for 19 serious conditions including infantile spasms, lupus, multiple sclerosis, necrotic syndrome and Rheumatoid Arthritis. Acthar is like changing therapy for smal