HELP Majority Releases Report Revealing Big Pharma’s Business Model » Sen. Bernie Sanders

HELP Majority Releases Report Revealing Big Pharma’s Business Model » Sen. Bernie Sanders

WASHINGTON, Feb. 6 – Sen. Bernie Sanders (I-Vt.), chairman of the Senate Health, Education, Labor and Pensions (HIL) Committee, today released a new report detailing a fraudulent system that allows Big Pharma to extort payments from Americans. the highest prices of prescription drugs in the world.

The HELP Committee Majority Panel found how three US pharmaceutical companies – Johnson & Johnson, Merck and Bristol Myers Squibb – profited at the expense of the American people. The report documents how these companies made billions of dollars by charging Americans the highest prices in the world. The profits they make from selling some drugs in the US is far more than the rest of the world combined. The report also systematically analyzed sales prices for innovative prescription drugs sold by Johnson & Johnson, Merck, and Bristol Myers Squibb since 2004, revealing that these companies charge higher prices in the United States than they did two decades ago.

Click here to read the full report.
Click here to read the summary or see below.

Note: The notes mentioned in the full report are linked.

Key findings include:

  • The pharmaceutical industry is extremely profitable, with companies such as Johnson & Johnson, Merck, and Bristol Myers Squibb raking in tens of billions of dollars each year.
    o In 2022, Johnson & Johnson made $17.9 billion in profits, and its CEO received $27.6 million in compensation. That year, the company spent $17.8 billion on stock buybacks, dividends and executive compensation, while only $14.6 billion was spent on research and development (R&D). In other words, the company spent $3.2 billion more on enriching executives and shareholders than on finding new drugs.
    o In 2022, Bristol Myers Squibb had a profit of $6.3 billion, and its former CEO earned $41.4 million in compensation. That year, the company spent $12.7 billion on share buybacks, dividends and executive compensation, compared to just $9.5 billion. Like Johnson & Johnson, Bristol Myers Squibb spent $3.2 billion more on enriching executives and shareholders than on finding new treatments.
    o In 2022, Merck generated $14.5 billion in profits and its CEO earned $52.5 million in compensation. That year, the company spent more than $7 billion on dividends and executive compensation, and $13.6 billion on R&D. If Merck’s cancer drug Keytruda had its own company, its sales in 2022 would rival McDonald’s’ annual revenue and exceed that of hotel chain Marriott.
  • The current industrial business model is based on tearing down the American people. For some of their most popular drugs, Johnson & Johnson, Merck, and Bristol Myers Squibb made more money in the United States than in the rest of the world.
    o Since 2016, Johnson & Johnson’s sales of arthritis treatment Stelara in the United States have been twice as high ($30.4 billion) as in the rest of the world ($14.9 billion).
    o Since 2015, Merck has made $43.4 billion in the U.S., and $30 billion in the rest of the world, selling the cancer drug Keytruda.
    o Bristol Myers Squibb made $34.6 billion selling its blood thinner Eliquis in the U.S., compared with $22.5 billion in the rest of the world, meaning the U.S. accounted for nearly two-thirds of all global Eliquis sales since its launch.
  • Johnson & Johnson, Merck and Bristol Myers Squibb charge Americans the highest prices in the world for prescription drugs. They start by charging exorbitant prices for new drugs. Then, as patients come to rely on these drugs, these companies raise prices, forcing patients to pay more or forego ongoing treatment.
    o Merck began selling a vial of Keytruda in 2015 at an annual cost of $147,000 in the United States and $132,000 in Germany. While Keytruda currently costs just $89,000 in Germany, it is twice as expensive in the US at $191,000.

HELP Majority Releases Report Revealing Big Pharma’s Business Model » Sen. Bernie Sanders

  • Bristol Myers Squibb began selling Eliquis in 2013 for $3,100 a year in the United States and just $1,000 in Japan. In Japan, the price of Eliquis has dropped to $900. In the US, Bristol Myers Squibb more than doubled the original price to $7,100.

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  • Over time, higher selling prices combined with price increases have led to striking differences in US prices compared to the rest of the world.

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  • Johnson & Johnson, Merck and Bristol Myers Squibb don’t just charge higher prices in the US than in other countries. They also blame Americans more than they did in the past.
    o From 2004 to 2008, the average sales price of innovative prescription drugs sold by Johnson & Johnson, Merck, and Bristol Myers Squibb was $14,000. Over the past five years, the average selling price of innovative drugs sold by these three pharmaceutical companies was $238,000.

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  • Johnson & Johnson, Merck and Bristol Myers Squibb are trying to protect their pricing power by any means necessary.
    o According to a database compiled by patent lawyers called the Drug Patent Book, companies have established patent assemblies to extend their monopoly and delay low-cost generic competition.
    o Merck’s Keytruda has been granted 168 patents. 64% of these patents were issued after the drug first received FDA approval.
    o Johnson & Johnson’s Stelara has been granted 57 patents. 79% of these patents were issued after the drug first received FDA approval.
    o Companies have spent a lot of money to gain influence. Over the past two decades, Johnson & Johnson, Merck, and Bristol Myers Squibb have spent more than $351 million on lobbying and $34 million in campaign contributions. Last year, these companies sent about 200 lobbyists to Congress.
  • The federal government is starting to take on the greed of the pharmaceutical industry. For the first time, Medicare can agree on the price of drugs like Eliquis and Stelara. Manufacturers are also required to pay rebates to Medicare for raising prices faster than the rate of inflation. But more needs to be done to make drugs available to all Americans.

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