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 StatesCongress 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 ga