Coverage, theres a link to each debate question and answer, see social media feeds on debate happening in reaction and watch our president ial debate video from the cspan video library. Next lawmakers questionse pharmaceutical of the pricing and drugs, the price increase at a rate that far exceeds inflation among other issues. This is just under four hours. [silence] [silence] welcome to todays hybrid learning, pursuant to house rules, some members will appear in person and others will appear remotely via webex. Since some members are appearing in person, let me first remind everyone that pursuant to the latest guidance from the house attending position, all individuals attending this hearing in person must wear a facemask unless they are speaking, members who are not wearing a facemask will not be recognized. Let me also make a few reminders for those members appearing in person, you will only see members and witnesses appearing remotely on a monitor in front of you when you are speaking what is known in webex as active speaker review. A timer is visible in the room directly in front of you, for members appearing remotely, you are all familiar with webex by now but let me remind everyone of a few points. First you will be able to see each person speaking during the hearing whether they are inperson or remote, as long as you have your webex set to active speaker view. If you have any questions about this, please contact the Committee Staff immediately. Second we have a timer that is visible on your screen when youre in the active speaker with thumbnail vio. The house rules require that we see you, please have your camera is turned on at all times, fourth members appearing remotely who are not recognized should remain muted to minimize background noise and feedback. First, i will recognize numbers verbally that members retain the right to seek recognition verbally and regular order members will be recognized into nordic, 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 where you may unmute your mic to seek recognition. Obviously we do not want people talking over each other so my preference is that members use the chat function or email to facilitate formal verbal recognition, Committee Staff make sure amendment 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 lifestream. Are we ready . [silence] are we ready to begin the life stream. The committee will come to order, without objection the chair is authorized to declare recess of the committee at any time, i now recognize myself for an Opening Statement. Good morning and thank you forg being here today. A year end half ago on january 29, 2019, our former chairman Elijah Cummings held this Committee First hearing of the new congress. The topic of that hearing was the same issue we are examining this week, the astronomical price increases Prescription Drugs, chairman cummings caredic deeply about this issue as the very first witness to come before a committee, we invited, you may remember her, she testified about the devastation of losing her daughter who had to ration insulin because she simply could not afford it. Since chairman cummings is not with us today, i would like to ask the committees indulgence to play a short clip of the Opening Statement from that hearing. I been waiting a long time to hold thisg hearing, for the pat decade i have been trying to investigate the active the Drug Companies for also took drugs, the generic and brand names. We have seen time after time the Drug Companies make money han over fist by raising the prices of their drugs, often without justification and sometimes overnight. While patients are left holding the bill, the part pharmaceutical industry is one of the most under most profitable in the world and one of the most powerful. 14 Drug Companiesie made more tn 1 billion in profits in the Third Quarter of 2018. D they have the best money combined. Let me be clear, there are powerful interest that do not want us to interfere with the massive profits. But theretr is a strong bipartin consensus that we must do something, something meaningful to reign in the outofcontrol price increases even President Trump p says Drug Companies are getting away with murder. But tweets are not enough, we need real action and meaningful reform. We are recognized that research and Development Efforts on groundbreaking education made immeasurable contributions to the health of americans. Including new treatments andfo cures for diseases that have affected people for centuries. But the bottom line, the ongoing escalation of prices by Drug Companies is simply unsustainable. This is a matter literally of life and death and we have a duty to act now, our constituents are demanding more from it and im grateful that we are finally starting down the road with this hearing. I remember chairman cummings at i that hearing so very well. Sitting right here in this very chair, listening intently to mss fierce determination, his empathy, i remember how he promised at the end of the hearing to do everything inur or power to make sure no family ever faces this situation again. At that moment chairman cummings was in the process of launching our committee on one of the most comprehensive and indepth investigation of drug pricing ever conducted by congress. Today 18 months later i amam honored to report some of our initial findings, at the outset its important to note the Drug Companies make products we all need, we rely on this industry to develop critical new therapy, treatments and vaccines. But our committees investigation has revealed deeply troubling facts about how these Companies Price the drugs that we all rely on. Our committee has now reviewed more than 1 million pages of documents from some of the largest and most profitable Drug Companies in the world, these include internal Corporate Strategy documents and communications among top executives. Let me briefly describe three name findings from these documents. First the documents show that these price increases are unsustainable, either for Government Health programs or patients themselves. The documents have reviewed show the Drug Companies continue to raise prices while raking in record profit and continue to put their products further out of reach for patients in need. To start the week back to back hearing, we will hear today from the ceos of three companies. We will hear from the former ceo of bristolmyers which required celgene last year. These Companies Sell the cancer drug, they have tripled the price of this drug since 2005. Today a course of this drug is priced at more than 16000 a month, that is just per month. We will also hear from the ceo the drug company which sells the multiples process drug copaxone. The company read the price of this drug 27 times in 1997. A yearly course is now priced at 77000, nearly seven times higher than when it was first introduced. To put this in perspective, that is more than the median household entire income for the year in the United States. Second the document reveals by the committee and shows that these massive price increases are based on generating profits for these companies, their shareholders and their executives. Lk we have all heard the talking points from the Drug Companies in the lobbyist claiming they need to raise prices to pay for research, lifesaving medication that p pharmacy is driving up te prices or that they are committing significant funds to helping patients who cannot afford the drugs. But the Committee Investigation those claims are utterly bogus, they do not hold water, the documents we reviewed show time and time again Drug Companies hike prices to meet their earnings targets and in some cases so executives can get their personal bonuses for the year, finally the documents show Drug Companies are targeting the United States for the biggest price increases in the world. They know the federal government is currently prohibited by law from negotiating directly with Drug Companies to lower prices for Medicare Beneficiaries. This may be the starkest finding of all, i was astonished to see some of the new documents wedo t will be discussing today, the United States is where the Drug Companies are increasing their prices, much more than in any other country, this is where they are making billions, billions of dollars in profit, last december the house passed hr three and we named it in honor of elijah e. E. Cummings, lower drug costs now act. This legislation would authorize medicare to negotiate directly with Drug Companies for lower prices. President trump supported this change on the campaign trail, but unfortunately he broke his Campaign Promise and he now opposess the change, the white house issued a statement declaring the hr three pr represented to the president , he would veto the bill, and studied taken on the pharmaceutical industry like i you promised, President Trump appointed former industry executives to key positions. These included joe grogan, the former director of white house domestic policy council, mr. Grogan personally wrote an oped opposing hr three, one week before we passed in the house. Here is the bottom line, as a result of President Trumps reversal drug prices has continued to skyrocket under his tenure and drug Company Executives have continued to get rich. A recent report found that Drug Companies have raised the prices of more than 600 Single Sourced brandname drugs by a medium of 21. 4 just between january 2018 and june 2020. By any measure President Trump has failed to reign in outofcontrol drug prices. There is no doubt that he has been scrambling ahead of the election, he promised to hand out a 200 discount charge but he failed to explain how this will help people facing tens of thousands of dollars in drug costs. The president also claimed he is banning u. S. Companies from charging the experts exposed tiny demonstration as a transparent to create the impression of action where there has not beenly any. Let me close with this, as chairman cummings wouldve wanted, we need to focus on the people, this affects the most. I would like to place statements from two patients who want to share their experiences with us about the two drugs and we will now play the patient videos. I am 50 years old and i am from his enter minnesota. Im a single mom with two kids in college. In 2018 i was diagnosed with an incurable cancer called multiple myeloma, before my diagnosis i was a High School Math teacher in a longdistance runner, now i can no longer do either. I rely on a drug to keep me alive, my outofpocket costs are around 15000 a year which is impossible for me too cover on my fixed income. In order to keep taking the drug i will have to deplete my life savings, cash only for 1k and sell my house when those funds run out, i am not sure what i will do. Usually i am a planner but i cannot plan for this, i am terrified for my future. I circumstances made and to make me feel helpless at times but im grateful i can share my story with all of you. I urge you to consider patients like me as you work to hold Drug Companies accountable and fix the broken system. Thankm you. Hello my name is therese, i am 66 years old and i live in indiana, i spent my life working as a nurse, watching People Struggle to afford Prescription Drugs, i never thought it would happen to me until 2003 when i was diagnosed with multiple sclerosis shortly after my diagnosis i began taking copaxone which cost 1800 per month at that time and after one year of paying for my treatment i wiped out my savings. After that, i had to rely on grants to cover the cost, and 2017 i lost my grants and at the time the price of copaxone had risen to 6000 a month. I can no longer afford it, i went without the drug, when i was not on the drug i lost shortterm memory and experienced other declines in mu functions. Which makes it difficult for me too enjoy the things that i love but like spending time with my grandchildren, my condition should not progress faster just because Drug Companies want to make a few extra bucks, this Drug Company Price Gouging needs to change, as each of you work ke reform the system, i hope you consider patients like me, thank you. Thank you and i now recognize the Ranking Member for as much time as he would like for his Opening Statement. Thank you, chairwoman melania i appreciate you calling this very important hearing today on the issue of drug prices, this is a critical issue for my constituents indeed for all of myour constituents. I am committed to working with you to identify and implement reforms that will improve access and affordability to Prescription Drugs. This concern issuedes by the president over the course of the last three years President Trump has taken bold steps to address drugen prices. Under the Current Administration drug prices have fallen over 13 from the expected trend, under President Trump or Record Number of drugs have been approved saving americans tens of billions off dollars. Under the Trump Administration terminally ill patients are given a chance to explore innovative treatmentti options. So we are all in agreement that drug pricing is a crucial issue for us to consider. However, i am worried madame chairwoman about the apparent intentions of the majority in experience. Instead of considering potential reforms in a productive and bipartisan manner, these hearings seem designed simply to vilify and publicly shame pharmaceutical Company Executives. A productive set of hearings would consider the pros and cons of various reforms and would speak to retain the positives of the Current System while identifying and prove that they were necessary and possible. Instead, democrats seem eager to cast the witnesses of villains to place all blame for cost and access issue on the private sector. The causes i think, our firm are complicated. Many of the greatest healthcare initiatives and innovations of the past 100 years happened in america, they have happened not because of government dictate but as a result of the tireless work of individuals having the freedom to experiment and compete and improve all of her lives. At this moment in time, the entire world is cheering on theh pharmaceutical industry to find a safe and effective vaccine tou stop covid19. That is the path to a more complete return to normalcy, to reopening our economy and getting her kids back to school and getting parents back to work. Under the Trump Administration we are seeing the fastest Vaccine Development in history, it is unprecedented. A mere 43 days passeds between sequencing of the coronavirus, rna and the start of Vaccine Development, as dr. Fauci and others testified safety is not being sacrificed but the Financial Risks are high. I am hopeful the democrats on this committee can stop the repeated attacks on the Vaccine Development process which do nothing but undermine the efforts of so many government and private sector scientists. Returning to the matter before us today, the policy challenge is ensuring that we dont kill the motive to develop nuclear as well as the same time taking targeted steps to address specific concerns regarding cost and patient access, the problem madame chairwoman, is not that the free market has failed. Rather the problem is that elderly complex regulation and Government Intervention in the market have distorted incentives and created barriers to competition, i dont believe that more bureaucracy is the answer, we must rethink regulation and ensure adequate competition happens in the marketplace. And yes, we should consider any needed forms of what the founders of a limited guarantee of profit from an invention that at times has been distorted into an unlimited ability to exclude others from selling Prescription Drugs, i look forward to hearing todays witnesses on how best to ensure america remains at the forefront of innovation and discovery while addressing Prescription Drug pricing in a sensibility. I hope we choose to do that in a manner that takes into the account the complexity of modern ang pharmaceutical development n the lifesaving Innovation Companies such as those appearing before us today and provided us instead of creating false and simplistic narrative about the private sector, thank you, madame chairwoman, i yield back. I now recognize the Ranking Member of the committee on education and labor for her Opening Statement, thank you very much madame chairman, Many Americans pay too much for Prescription Drugs, it is not right and Congress Needs to step up, luckily we have a solution that can lower cost at the drugstore for patients and seniors, the solution can be passed into law before the election, the lower cost hr 19, the republican alternative to democrats hr three combines many bipartisan reforms to lower outofpocket spending protects access inc. Heres and strengthens transparency and competition, to the contrary democrats hr three would eliminate 38 new drugs over the next decade, new drugs that can cure alzheimers, cancer or covid19. Hr 19, the o republicans will would make research and development more competitive by reducing companys ability to gain the system and engage in antibehavior, hr three would hide the cost of Prescription Drug behind the wall of medicare bureaucracy, the republican bipartisan bill on the other and would require Insurance Companies and pbms to be more transparent with drug costs with available of the Doctors Office before someone has written and no effort to require pharmacy benefit managers for rebates with manufacturers, hr 19 with a portion of rebates to pbm speed pass directly to the patient at the pointofsale, saving seniors millions,mi hr three attempts to use the power of the government to steal intellectual property. And to decrease the cost of the drug in the short run, hr 19 moves away from where generics and bio similars to come to market increasing competition and rapidly driving down costs for patients and ensuring access to new innovative medication. , hr three ignores the cost of administering Cancer Treatments for Medicare Beneficiaries, hr 19 cuts the cost of chemotherapy and half by providing incentives for high quality care instead of merely giving priority to the location of treatment. , instead of passing common sense reform contained in republican hr 19, democrats have chosen to discard bipartisan work and conduct the partisan hearing to attack companies that are working to develop the American People, democrats had a choice to help americans are speaker pelosi, sadly they chose to help speaker pelosi. Thank you again madame turned back. I yield. Heiss for an openingstatement. Command chair and as my colleague from North Carolina just mentioned, hr three really would completely got the pharmaceutical innovations which we also desperately need and we rely upon. In fact the Congressional Budget Office said it would result in 38 it would result in 38 fewer over the next 20 years. That is a significant numbers. They also estimated it would result in as many as 100 fewer cures from coming to the market. Just think of that. One hundred cures from coming to the market. It would result in a cure from deadly diseases like multiple sclerosis like we just saw or alzheimers or covert covid19. We dont need them not coming to the market but according to the cbo that is what would happen with hr three. By the way, they dont come cheap. Its not unusual for some of these medications to cost as much as 2. 5 billion through r and d and to even come to the market to begin with. And thats not even to mention or to consider the fact that more than 90 of these drugs that enter into the fda Clinical Trials never gain fda approval. And so, weve got an enormous expense with the companies trying to bring medication onto the market, 90 plus of which never make it onto the market and so let me just be clear the fdas rigorous process is a huge reason why so Many Americans trust that the medications and vaccines that come to market are safe and dependable. Unlike many of my colleagues on the other side of the aisle, i trust the process and i know that it will bring a safe and effective vaccine to the American People for covid through operation warp speed. Biopharmaceutical companies are far out spending the federal governmentre for r d for cures r various diseases and thats exactly why we need to be willing to work in order to make innovation easier so that more americans can live fuller and happier lives,in not killing innovation with too much government. So, im sad to see that todays hearing shows frankly at least in my opinion that my colleagues on the other side of the aisle are not interested in a bipartisan solution to bring more cures to save american lives, and instead they think its more beneficial for the reelection campaigns to attack pharmaceutical executives and not greatly think that is a huge mistake for the American People. With that, madam chair, i would appreciate the time and yelled back. I now recognize congressman royyn who is the ranking membef the subcommittee on civil rights and Civil Liberties for an Opening Statement. I want to thank you, chairwoman maloney. Seriously thank you for giving us time to have Opening Statements. You didnt have to do that, and wewe are grateful that you did. We all recognize is a major concern to all americans because lives literally depend on the existence or availability and importantly effectiveness. The drug pricing issue is focused on blockbuster biological drugs and that costs a lot of money. 4 are biologics but 46 of drug spending. 90 of the drugs sold in the United States are generic and relatively inexpensive. So lets have hearings and have a perspective on solving the problem as a whole rather than vilifying certain actors. Lets not play the game. In washington that is to clearly target one industry for political purposes who in this case we are talking about drugar companies, but hardly all to blame. Lets look at pharmaceutical managers, Insurance Companies, the fda, hospitals and governmentni regulations federal and state level. Last year in a hearing, one of my colleagues was eviscerating a drug company that makes in hiv lifesaving drug for making profit. I said something to the effect of i hope they doo make a profit but with the caveat that this kind of innovation saves our lives. And the caveat that result in regulated corporate profit versus the kind of profit that drives innovation to save lives. Many of us have had our lives changed by scientists around the globe. I would note to chairman cummings im glad you played that video. The Companies Often make money patents wrapped around Government Research and i agree we should address that and i think most of us do but he also specifically gave me time to highlight my story and pulled me aside after the hearing to agree that we must ensure we have the drugs to save lives and i would note we are working overtime to produce the vaccines as we speak. Indeed it is a troubling situation but we have a lot of complex government regulations coupled with Insurance Companies to have total control of the Healthcare System and powering the major corporations to roll over customers because there is no market. There is no doctorpatient relationship that sacrosanct and enables the patients to price things to market. Pathis is a Problem Congress has largely created. We want to address it and look at the supply chain from top to bottom. Look specifically at the patents providing protection from competition making it harder to access cheaper insulin. This is what happens with limited competition. The fda has approved roughly 2,500 generic versions. Pharmaceutical drugs have at least four generics reduce the price by an average of 39 but the fda is inefficient. On average it could take more than a decade and a 2. 6 billion of research to get a new treatment through the market and only one in a thousand to ever get the preclinical testing. Only 8 get fda approval. Once the drug clears the patent law, it still has to make a formulary of your Insurance Plan to receive your discount. The healthcare bureaucracy the body has created is guilty of lining the pockets of the companies beyond what the market would demand. Both insurance and pharma. In 2018, the United States spent 335 billion on retail Prescription Drugs, 10 of the National Health expenditure but wthatwe spent 1. 2 trillion, 34f the expenditure, so where should the focus b, the Healthcare System or just pharma . As we all agree the focus requires this is usually understood to have been through insurance and risk adjustments but its become too expensive for most americans and often its this bodys fault. S the regulation caused premiums to more than double from 2013 to 17 increasing overall by 60 from 2010 to 2017. Worse yet, cms data shows while premiums were spiking through obamacare, people in the individual market were losing their coverage in just two years from 2016 to 2018 of the subsidized declinedid by 2. 5 million people. A 40 decrease. Dethis makes it harder to deflae cost and forces many to pay the list price, which could be avoidable. There are always bad actors tht take advantage but lets not Forget Congress role in creating the system. I know im running out of time. Chair maloney i would also point out each of the companies are working today to engage in the price. Innovation in the pharmaceutical industry is critical. Lives are literally lost. We want Affordable Drugs rather than expensive drugs and to do that lets do what this body never does any more, roll up our sleeves, restore health care, and power patients and doctors and remove the bureaucrats and middlemen driving up costs. I look forward to hearing from the witnesses and appreciate the time you gave us this morning, chair maloney. I now recognize my colleague and a very good friend, congressman welsch, who worked very closely with chairman issue for hisis Opening Statement. Thank you very much, madam chair. I thank my colleagues. Every single american, every single taxpayer at one point or another is going to need pharmaceutical assistance. In every single american, in every single taxpayer, everybody who pays a premium, every employer who pays premiums on behalf of his or her employees needs relief from prices that are absolutely beyond reach. The question for this congress is whether our government will play a role to stop price gouging by the pharmaceutical industry. And let me be candid, there is a disagreement about that. This legislation would enable the government on behalf of the people it serves to negotiate prices when it purchases Prescription Drugs farm the pharmaceutical industry. This is not a question of whether those are necessary. Its not a question of whether theat investigatory and Research Work pharma does is good. Its about whether there is any limit on what the pharmaceutical industry can charge the taxpayer, the medicare program, the medicaid program, the employers who provide insurance to their employees. What i understood as the government here to serve the people has a responsibility to do things that protect them from price gouging. E and yes its true many of the pharmaceutical industries have come up with lifesaving pain relieving medications, but they are killing us with the prices they charge. What this report shows is that there is a very Clear Strategy on the part of the pharmaceutical industry to boost its prices in the place where it can, and thats the United States of america. Ours is literally the only country where the government wont protect its citizens from price gouging. Now the prophets, nothing wrong with prophets. Price gouging prophets, yes and the tactics used that are tried and true by the pharmaceutical industry to extend the life of that monopoly that they get granted by this congress, by making an ever so slight change in the medication itself and claiming that entitles them to extendm the patent where you he companies that are charging like 70,000 for a drug, it helps but who can pay that. Then we see the pharmaceutical industry coming up with very skillful ways to appear to be helping, like donations to thirdparty foundations that help patients afford. Theyve done and an analysis you are going to see inly this repot where they very selfconsciously realize that boosts sales for them and they make money by making that as an investment. What has happened here is that temptation pharma has two years its uninhibited Pricing Powers has transformed americas pain into a profit. That is what has happened. We can address many of the things my colleagues have talked about with regulation and find ways to help the emergence, but the only way to really get the pricing is to have negotiations. By the way, negotiations are core to a free market economy. A buyer and a seller have a discussion and decide what its worth the seller and the buyer. We are the only buyer in the program where we dont negotiate. When you negotiate, you save money as vermont has done. Wiwhen elisha and i met with President Trump, elijah was presenting his price negotiation plan the president said he was for price negotiation and it was ripping us off. He was hopeful. The president has failed to fulfill his promise. We are heree to keep elijahs commitment. Thank you madam chair and i will yield back. Thank you. I think the gentleman for his hard work. Now i would like to introduce the witnesses. We are grateful to have their testimony, and i want to thank the witnesses for being so accommodating with their schedules so we can have them here together. Our first witness today is mark alice was the former chairman of the board and ceo they sold the cancer drug until november 2019. Then we will go to doctor giovanni who is the chairman of the board and ceo of bristolmyers which has served since november, 2019. Finally, we will hear from mr. Kare schultz of teva. They sell a multimulti sclerosis drug. The witnesses will be un mutated so that we can swear that man. The witnesses will rise and raise their right hand. Do you swear or affirm the testimony you are about to give is the truth, the whole truth and nothing but the truth, so help you god . I do. Let the record show that the witnesses answered in the affirmative. Without objection your written statements will be made a part of the recorder and with that, d for your testimony. Chairwoman maloney, Ranking Member and members of the committee, thank you for the opportunity toto discuss the lie extending medicine approved by the fda for the treatment of rare and incurable blood cancers. My name is mark alles and i had the privilege of being part of the research in the industry for more than 30 years. Before i joined this industry i served in the marine corps and Marine Corps Reserve and before that, i taught a junior high school. With the values of integrity and to every part of the career. It was discovered, developed and brought to patients by the former employer. They were in the Clinical Development and implemented medicines for the treatment of cancer and serious inflammatory diseases. After serving in multiple different roles in the company, i was appointed the chief executive officer than 2016 and chairman of the board in 2018. My last day was december 2nd, 2019 after acquired by Bristolmyers Squibb in novembe. At that time the company employed more than 80,000 people worldwide with approximately 5,600 in the United States. Onepr of them was marketed as revlimid, the primary treatment of a rare and incurable blood cancer. Approximately investing 800 million for 14 years to develop before the first approved use in late 2005. Revlimid is a unique drug completely independent full approval process. Its become a standard of care based on several large clinical studies that have demonstrated significant patient benefits. Since the initial approval, the Company Continues to invest several hundred Million Dollars into the research andio development of the medicine. At the time that it was acquired, they had and were sponsoring more than 50 additional clinical studies for patients with different types of cancer. N as it is common in drug development, some of the studies were not successful however some were and resulted in six additional approvals including the mostec recent in 2019. Since 2005, more than 700,000 patients have been treated with revlimid worldwide. Guided by a set of principlesd that reflect the commitment to patient access, the value of the medicine in the Healthcare System, the continuous effort to develop new medicines and uses as the need for financialor flexibility. 2018 the Company Publicly committed to full pricing transparency by limiting price increases to know more than once per year and at a level not greater than the centers for medicaid or Medicare Services increase in the National Healthcare year absent exceptional circumstances. To help ensure access to medicine, the companys patient support programs provided copayment assistance to eligible commercially insured patients and provided free medicine to eligible patients. More than 140,000 people in the United States were prescribed a cancer medicine and received some form of assistance. Celgene sold samples of the patents medicines to manufacturers so long as the companies met critically important Safety Standards and we used requirements to protect the public from the risks of severe birth defects associated with a known and suspected drug including revlimid. Multiple generic versions are licensed in the market within the next two years. Celgene was a Research Driven bioPharmaceutical Company heavily in the discovery and development of innovative therapies that are now helping to improve the lives of tens of thousands of people worldwide and concerning legislative changes i urge congress to maintain any of the incentives that currently exist to encourage and support medical innovation. Finally, because my mother died from a disease my son lives with insulindependent diabetes, my daughter has autism and my older brother is being treated for an incurable blood cancer all of us severely impacted by this pandemic. This issue matters to me as a deeply personal level. I hope and believe these treatments that society and my family will benefit from today and long after these medicines become generic drugs. Thank you and i look forward to answering your questions. Thank you very much and we will now recognize mr. Caforio. You are recognized. Mr. Caforio, are you on mute . Thank you. Can you hear me . Yes we can. Chairwoman, Ranking Member and members of the committee, thank you for the opportunity to join this important conversation. Begin by congressman cummings. A champion for Affordable Health care and continued by chairwoman maloney. This is an important issue for all americans. Today advances in medicine are progressing at remarkable speeds. As a physician, im excited by the science but also concerned that without assistance to protect all patients and without Affordable Access, we risk these advantages being out of reach. Medicines like revlimid highlight these advancements and the challenges that come along with it. We have seen extraordinary gains. The fiveyear survival has doubled in the past 25 years turning what was once a dire diagnosiss into a manageable condition for some patients. Its one of the most significant contributors to the survival rate. We continue to unlock our Scientific Understanding and our Research Today is fueling nextgeneration treatments that build on the success and progress. We are now on the task of personalized medicines that use reengineered cells to fight cancer. We are providing 1,000 examining the trials and enacting the robust response. Itit was prescribed outside of e u. S. And cost tens of thousands of different defects. However continuing to invest in the research and development ultimately [inaudible] and billions of dollars. I do recognize that its a perfect solution with thek challenges and the opportunity to work with you and others to advance Critical Reforms to deliver care to patients. We believe in the importance of a healthy market we are committed to discovering, developing medicines that help patients with an unprecedented year our work has never been more critical. I look forward to answering your questions. Thank you. Thank you. Mr. Schultz, you are recognized. Chairwoman maloney, Ranking Member and members of the committee, thank you for opportunity to appear before you today. The medicine for the treatment of multiple sclerosis but before i discussedto this i would likeo talk about more of the role. Global Pharmaceutical Company committed to affordable medicine to improve health. We were founded in israel 120 years ago and worldwide for the significantat presence in the United States. The Global Leader with the largest portfolio of Generic Medicines. 41. 95. 9 billion savings. We also provide over 40 million of assistance to almost 13,000 patients. We are committed to helping the patients Scientific Research. This defines how we do business and approach. To the Research Development or the price of success for the significant cost of Ongoing Research its ultimately approved for the government. But you have to spend a lot of resourcess before moving to the markets. Our investments in researching and developing and commercializing safe and effective treatments in the United States in 1996. Since then its become the preferred treatment. Since first introducing, weve continued most recently 2014 and it only needonly needs to be add three times a week. As a result its been completely on the value it brings. They all predate the agenda moreover in the Price Comparison its declined over the last several years which is expected to giving the comparisons in the industry into the market. As a company apparently focused on the generic drugs. We are also dedicated to supporting our patients and improving Patients Experience in all the ways we can. We spent a significant amount of resources on a program called shared solutions. We provide both medical and financialan assistance to paties and also provides patients with 24 7 access to support from certified nurses. Peer resource and educational programs. P it reflects the products value but also is committed to ensure that patients have Affordable Access to their drugs for example shared solutions have a team of dedicated s specialists who help cover patients coverage and benefits so they can receive the most Affordable Care possible. We acknowledge the pharmaceutical industry as a whole needs to be mindful and responsible about the pricing of medications and understand each company plays t a role keeping down the healthcare costs. We renew the commitment to continue toco provide access to highquality Generic Medicines to create Innovative Solutions for patients and to strive to make healthcare more accessible and affordable. We appreciate the continued efforts of the committee to extend specific medications and look forward to working with committee in answering their questions. Thank you very much. Thank you all for your testimony and i now recognize myself for five minutes for questions. Istns want to talk about internl documents the committee obtained as a part of the investigation. Showing Drug Companies are targeting the United States for their biggest price increases anywhere in the world. They do this in part because the federal law currently prohibits the federal government from negotiating directly with the Drug Companies to lower prices on behalf of Medicare Beneficiaries. So, mr. Alles, id like to start with you and put up a slide that we obtained from your company, celgene. Please put thepa document up. Do you have a copy of it now that you can see . This document that is in the reports that we gave you, this is an internal presentation for october 2018, and it was made to the companys Corporate Access committee thats the committee thats responsible for approving the companys price increases. Can you see the document . Madam chairwoman, i see the document but im looking for a copy of it here in the room. This document basically gives your companys view of the world and how much money you can make in different countries. I want to ask about the United States on the bottom left and compare that to the European Union on the top right. If you look atk the u. S. , it sas and i quote, highly favorable hlmarket with freemarket prici. Now you say freemarket pricing, bute the government cant negotiate with you to lower prices under medicare. So, thats absolutely terrific for your profits, and i understand why you think it is highly favorable. But then you say things are only, quote, manageable and then you highlight stagnated price growth as a result of the price negotiations. Now you call it stagnated price callh but the rest of it it negotiating to bring prices down for people. Your company loves the u. S. Because you can keep increasing prices as high as you want, and medicare that covers millions isnt allowed to negotiate. But where they do it stagnated or not increasing so heres my question isnt it true for the past decade you targeted the United States for the biggest prices and the p biggest price increases in their entire world. Madame chairwoman, thank you for the question. As i look at this slide, it seems to accurately reflect our assessment of the Market Access of thece pricing environment in the different regions of the world at that time. I think it also speaks to the United States is the leading innovator and the opportunity in the u. S. Continues to drive much of the research and development and medical innovation for the world. So, it also i think describes not as well as i would like that there are fundamental differences around the world with economies and countries and the systems, but in the end it does highlight who we are the home of medical innovation and that is a freemarket environment. Since launching revlimid in 2005, you raised the price 22 times in the ten years from 2009 to 2018 your Company Reported 51 billion in the net worldwide revenues for this drug alone, and 32 billion of that came from the United States. You charged more for this drug here in the u. S. And made more money from this drug here in the u. S. Than in any other country combined. Let me turn to mr. Schultz. I have an internal document from your company, teva that shows how executives reviewed. Let me put the document up on the screen. This isum exhibit 32. This is an internal presentation from september, 2016. The top of the slide reads, and i quote, what does teva do well in pricing. The first bullet on the slide says price negotiation strategies and able to increase prices successfully. And underneath that it reads, and i quote, influenced heavily by the u. S. Being allowed to high prices. Below it, it says and i quote, we apply more frequent price changes twice a year and many on a continuous basis many on a continuous basis you are highlighting your ability to raise prices here in the United States because you are allowed to b do so because youre forced to negotiate the prices now for the patients and people isnt that right lacks. As you might know i joined 2017 which means i havent seen this document before and im not aware theres been no changes or increases theres been a dramatic reduction in the pricing to the tune of a price reduction in 2018 and again in 2019. That is what i can comment on. This document shows why we need to pass and sign into law hr three. The chair man was right and President Trump was right before he broke his promise and reversed his position. We need to get rid of this ridiculous law that says the government cannot negotiate drug prices. I now recognize mr. Palmer for his questions. Before i begin, madam chair, i would like to say that i do miss Elijah Cummings. No disrespect to your chairmanship, but he was, in my opinion, a good man. Thank you. We all miss him. If i may reclaim that time, i think its obvious that we dont want to do anything to stifle research and innovation that has us literally brought us miracle drugs. I think we are about to see that with the covid19 vaccine. Weve got members of this congress, including mr. Roy and others that have had drugs have a major impact in their lives. It was mentioned the multiple myeloma and im happy to hear about the advances from the cancer that is my fathers life in 2000. I think we all have stories like that. I think the fact is that we want coto encourage innovation. We want to encourage this research that can bring us these miracle drugs, but that will do little good if they cannot afford those drugs. One of the things my colleague mentioned, and we have seen situations where the patent protections are so short that it seems obvious at least to me from a business perspective that some of the price hikes are on the companies to try to recover their cost because theres billions of dollarss invested n the development of a drug and many of them never come to fruition and never get to market. Companies have to take that into account when the price. They price. But what i want to know is if extending patent protections would be of any value to reducing the costin of drugs mr. Alles, if you dont mind responding. Celgene. Thank you for the question. I will answer to anything that sounds like my last name. The question is very complicated but a critical question. I believe that if the patent reform extended the patent life of a medicine coupled with modernizing the reimbursement challenges for example capping the outofpocket cost for Medicare Beneficiaries along with the act that passed at the end of 2019 that did tighten up some off the areas that could have been used to extend so i think theres a combination of things that could have been together that would have the opportunity to t lower pricing. At celgene, we also thought managing the companys medicines took into account the lifetime of the medicine with its initial and prove approval versus what historically had been the pricing practice which over time increased the price in the u. S. To as you say offset failures and offset Clinical Research costs and offset other unexpended expenses. Its an interesting marker. E i appreciate the answer and i would like to hear from the industry. To make sure that these drugs are available to people that needth them. The system was denying coverage that included those for treating Breast Cancer and prostate cancer. We dont want to have that happen here. For those one or two companies that have a monopoly. Then in california, 31yearsold and heran Insurance Company wouldnt pay for it but they would pay for the assisted suicide drug and her copayment would only be 1. 20. We wanted to avoid that and incentivize companies to continue to do this research. I think we ought to have an operational warp speed for these drugs. I think we see an example of how this could work if we all get our minds around it and with that i will yield back and thank you for your indulgence. You are now recognized for questions. Thank you very much, madam chair. Thank you for this important hearing signaling the importance of this hearing on the drug pricing to the American People. Thee notion that in a market system we are having to debate theio notion of the negotiation forny any market item is very peculiar to me. Mr. Alles, mr. Caforio and mr. Schultz, i want to thank you for joining us today and acknowledge and appreciate the work that you are doing and even as you have testified, the assistance you are gaining from patientsro that there are millis of americans who cannot afford these drugs. I appreciate what you are doing and for that reason every time a Company Raises prices it pushes these lifelines and opportunities even further out of reach. Because i have a limited amount of time, im going to have to ask you not to give me an extended reply but an answer. Im simply trying to establish for the record the answers so please. I understand your Company Raised the price of revlimid several times and it generated 32 million in net income from u. S. Sales between 2018 and then over that same period of time in 2009 to 4 million in 2018. Do these numbers sound correct to you . Yes or no . I would make one correction for the record, 32 million i believe those numbers would be correct. Thank v you very much. The price it was in 2000. Mr. Caforio after acquiring, you raised the price yet again is that right . Yes, congresswoman, be increased by 6 in january of this year. Your Company Raised the price 27 times since its market and i also understand its now seven times more expensive than it was in 1997 and has collected more uman 34 million in u. S. Net sales. Rr do these numbers sound correct to you . I wasnt there at the time but that does sound correct. Are you aware that nearly one in four americans takes Prescription Drugs with the difficulty in affording their medicine . I am aware of that and very thankful for providing prescriptions in the United States market. Thank you. Mymy time is running out. Are you aware of that that nearly one in four report difficulty in affording their medicines . I am aware of that and that is why we actively support every patient we can with a number of patient assistance. Are you aware of that number nearly one in four americans paying for drugs report a difficulty in affording it. A i am aware of the number, yes. Thank you. My time is expired. Thank you, madam chair. Thank you very much, madam chair. My first question is for any or all of the witnesses. I understand your companies are working to develop new treatments and vaccines to fight the spread of covid19. What country do you expect to deliver the first credible widely used vaccine . Could the witnesses answer please . Thank you, congresswoman. Thank you for the question. Companies around the world are working day and night to develop not only vaccines but also treatments and we are cooperating like we have never done before to assure the process. We are working 24 7. As has been said before, innovation in the industry happens primarily in the United States with many of the Companies Working on treatments and vaccines. There are companies of course in other parts of the world working on this as well. What i know is whether it is a new medicine or vaccine, whenever innovation is made available to patients, it is available right away. In our country sometimes it is delayed in terms of its access. We are working to make sure that doesnt happen. But im confident we will accelerate for u. S. Patients. We know that the United States is the most likely to develop the first credible vaccine, so if one of the other witnesses could say marble are the best incentives for these . It is very clear that the ability to have Financial Flexibility built into the innovationon cycle allows for te Multinational Companies doctor caforio was speaking about, to shift the resources when the crisis occurs, and certainly this is a crisis, so the innovation cycle of that is representative of the u. S. Market and those two things. It allows for that shift and also provides access more often than not. For example, one of the indications of revlimid available to the citizens immediately upon approval took 13 years longer to be available to patients in the United Kingdom. So these issues are accompanying some of the developmental issues and economic challenges of how innovation is warranted in the United States but not necessarily in the rest of the world. Mr. Scholz, let me ask you the next question. If the United States had implemented the same controls many of our european allies had in the last few decades, would we be more or less likely to develop a vaccine for covid19 . I would say you would definitely be less likely simply due to the fact that financial incentives would be less. One interesting fact that is in line with this whole problem of access to new medicines is nearly all new drugs i think if you just go to canada its Something Like 56 of the recent innovations. There are financial incentives and motivations to do research and launch products. In the long run of course most of these would be available all over the world. Thank you very much. I think anybody that has had any experience with capitalism understands that human beings respond better to rewards than to punishment. Weve known that for a long time. Thank you very much for recognizing me. Thank you. Mr. Connelly has generously al ored to handle the work on the floor, so we are going to recognize him now so he can gohe to the floor. You are now recognized. I think the chairwoman for holding this hearing. I do want to preface by taking issue with my friends on the other side of the aisle. If you listen to their narrative, you would never know 600 Single Source drugs went up in price by nearly 21 in just a twoyear period. You would never know listening to their narrative that longtime drugs 100yearsold like insulin which isnt a new drug and not a dime went into it and skyrocketed the price threatening the health of american diabetics to the tune of millions. You would never know and they are rushing to attacks on this side of the aisle. We had a man who bought a company for a lifesaving drug and he gouged the price not because of the need to reinvest or have a return on investment, but because he could. And he had no conscience and he went to jail. Thats the ceo we want to look at. We want to protect the American Consumer. If my friends on the other side of the aisle find that they dont want to do that, i think that they are taking a bad step and thats what this hearing is about. I commend you for holding the hearing. If we could put up the graph between europe and the United States on your drug if im pronouncing that correctly if we look at that graph it cost a little bit more than it did here in the United States and yet, over time a huge divergence occurred. But you can make even more popular here in the United States because of the free market environment which means we dont negotiate that prices that a fair statement . In the aggregate what we are seeing is the innovation cycle and r d. Im running out of time is there a difference between the r d investment in europe . It is the same drug. It can be quite different Clinical Trials can be run more completely in the United States or more happens here. With respect to that looking at exhibit number seven, your own forecast said he would have modest price increases in the United States independent that you would stabilize the price of a pill at 470 by 2019. Instead it went up at 750. Was that also because of unanticipated are in d cost . How can you get that place. So wrong . And looking at the document you are describing and i know we got the estimate of are in the wrong. You got the price of the wrong of the. Thats a big differential when it hits the pocketbooks of the American Consumer. Would you not agree . I see the difference between the European Union and the forecast but i also dont seem to increase adjustment for example and 2018 it approached five. 7 billion. That difference means for an American Consumer dependent on this lifesaving drug it occurred cost more than 16000 a month and i think that is an appropriate costs to most americans magazine the kind of choice the chairwoman shows us in the videos of American Consumers first with this kind of price escalation to make the terrible choice between controlling their illness or leading ago. That should not be the sophies choice any american faces. I yield back. You are now recognized for questions. Thank you to our witnesses for being here today as well and for the difficult task you have of working through r d and trying to make a profit while at the same time provide medication not only here in the United States but abroad. I do wish my friends on the other side of the aisle if they were serious about true reform and lowering prices, we will be looking like a tran19 instead of pushing Something Like hr w three which we all know will not lower drug prices and again mentioning earlier in my Opening Statement there are fewer drugs availableou as a result this is it just me saying word spread that cbo may confirm there would be a loss of cures available on the market. I know why any shape or form or fashion is considered to be a good idea that seems like a poor idea in fact it seems like a dangerous idea to go down that path. So for whatever reason some of my friends on the other side to have potential cures to push hr three through as opposed to hr 19 the republican legislation addressing many of the issues we frankly talk about today without destroying the free market innovation and the ability to get drugs through the process and to people who need it. Think again illuminating any cure, any cure for whatever the disease might be alzheimers, sicklecell, canceh one of o these was a possible cure and could not come to the market and that is unsatisfactory. We simply cannot go down that path to eliminate any potential cure for some of these serious diseases. Hr nine kept seniors outofpocket cost, required Insurance Companies tove make information of drug cost available well in the Doctors Office and a host of other things. Thank you teach the companies here today every one of you are involved in developing treatments and vaccines potentially for covid19 and this highlights how important the investments are that you make them policies that incentivize investment and pharmaceutical innovation is a good thing. Thats where we need to be focused and right here in the United States no doubt this is the epicenter of research and development for a host of diseases that includes covid19 and finally want to acknowledge and think the administration for the great work they have done to lower drug prices as you can see from the poster behind me there has been a drastic decrease in p prices and if you look at this and by the way these are statistics from the bureau of labor statistics you saw the largest single year drop or Prescription Drug prices since 1967. This is great progress in the right direction the fda approved our Record Number of affordable generic drugs last year for the third Consecutive Year under the Current Administration. October 2017 the fda published a list of the and one off plan drugs with exclusivity without any generic competition and announced they would expedite a review of the generics that made it on the product list. October 2018 the fda approved 110 generic drugs and then approved 18 more. This all results in a 26 billiondollar reduction of cost 26 billion of cost savings and then we have also some executive orders from the president , four of them to lower the cost of drug prices it is a huge issue. We are moving in the right direction thank you to our witnesses and the companies for being here we have to get beyond talk and look at actual action taking place to lower Prescription Drug cost and i yield back. Mr. Cooper you are now recognized and you must turn on your video. In we are having technical difficulties i now b recognize mr. Raskin we will go back to mr. Cooper later. I use that by contrast. So i am not saying. We have some technical problems we are now going to ms. Wasserman schultz you are recognized. Robin kelly you are now recognized. Thank you madam chair and the committee for bringing us together to discuss affordability and all witnesses willing to testify today the medication is critical to the patients they serve me at the cost can make them unaffordable putting doctor does your company have any programs or initiatives to help patients afford revlimid . And with the current covid19 discussion why not . You are on mute we cannot hear. Now can you hear me . Thank you for your question. Yes. First of all it is absolutely important and essential that anyen patient that needs one of our medicines has access we have a number of programs to help patients i will mention a few examples we provide free medicine mostly uninsured or underinsured patients. In one year Bristolmyers Squibb gives approximate 2 billion of free medicine for patients in the us we have 100,000 patients every year. For revlimid specifically in 2019, we provided in that case so jean approximately 500 million. We also have a Copay Assistance Program support to patients that have commercial insurance and for revlimid specifically that support was approximately 20 million last year we did act quickly at the beginning of the covid pandemic because we thought it was important to do that. So we expanded our program and for any us patient that lost their job or insurance because o of covid they are receiving any bristols grip myers medicine for free and we do make contributions to charitable organizations because we do know there are patients that we cannot help directly and we do make those contributions so they can have access. We do understand that all of those are solutions if you look at the totality of our program without approval that is as broad we definitely the word like to do more and i wanted like to work with the committee with policy reforms. I know Bristolmyers Squibb has a commitment to address Health Disparities including the 300 Million Investment announced last month but with the skyrocketing prices that could exacerbate the same Health Disparity that specifically of the revlimid could have multiple myeloma and also that investment does not erase the healthcare disparity of that issue so what have you seen of the impact on minorities in particular and does that lead to less access . I think the covid pandemic this year that they are disproportionately going back and we try to help in many different ways as i mentioned we expanded our support programs and able to provide her medicines for free to many more patients this year and that increased and to serve those communities that haveie been impacted more. How many of those are taking advantage . I have exactly those statistics yet. But we are tracking the utilization o of our programs i would be happy to follow up with you. I would love to see that. Absolutely. My time is up. Thank you madam chair. Congressman you are now recognize. Thank you. This is extremely important to the people we all represent and something we know we have needed to deal with for quite some time the extraordinary increase of drug pricing. Any of you could speak to this but doctor, could you speak to as a hearing on drug pricing, the Pricing System so to speak the difference between what you price it at and what the customer pays and the process that goes through with a brief explanation . Yes. Thank you congressman i would be happy to do that. Let me start by saying the Pricing System in the us is very complex and in one of the objectives working to gather is to resolve that complexity to realign the incentives to help the patients better we do price based on the value they deliver to society and Healthcare Systems in the us and we do have probability aspects into consideration thats very important to us. The system is complex in the commercial space so for those who have insurance through their employer, of course we work with Insurance Plans and pbms to ensure our products provide very significant rebates and discounts we like to see those transferred into patience and often they are not. This is an area important to us. Of course the focus of today is primarily on the Government Program medicare and even medicare as well with many areas with those plans and there is significant competition as well. I will break in because we are running out of time for basically this is somewhat of an accurate charge of drug pricing scheme . Its difficult for me to see. What i want to note is the manufacturer circles a large pharmacies and pharmacy benefit managers we are only speaking to the manufacturers today. I would suggest while definitely a lot we need to talk about if we come up with a good price discussion we need to bring these other elements into the discussion as well. Over the last few years we know the Trump Administration has produced a Record Number of generics and three years in a row Record Number of generics do they bring the price down for consumers . Yes. 90 percent of prescriptions in the us are generics. The others would agree with that . Thank you for the question congressman. Yes generic brings down the price dramatically 90 percent of the volume in the United States is from generics one out of ten but the face seeing typically was somewhere between 60 and 99 percent within the year of the generic version of the drug. President trump also passed an executive order dealing the most favored nation status to gauge pricing more on the International Price index. And then the price since 1967 for Prescription Drug pricing is also interesting to me while we have a chart to be out there which is an attempt to take over this from a government standpoint that does the dress delay which are serious issues that need to be done with and certainly i think we all agree its a bipartisan issue to lower drug pricing but as we have seen with obama care and Affordable Care act those intentions as we with that extraordinary increase so it is extremely important we make sure that we are equipped to deal with this properly. Now one question i do have. My apologies i read the clock wrong. Mr. Raskin you are nowow recognized. Thank you madam chair for calling this hearing. Mr mr. Schultz the prices of your product has gone way up over the last two decades its in the billions the executive compensation your top executives are making four, five, 6 million. What is your salary . It is combined of different elements but basically the basic salary is 2 million. So with that total compensation package. That ongoing package is 12 million. So asking about r d inevitably with those exorbitant prices that Drug Companies are charging are necessary to invest in research and development but it cost our constituents four times what it cost in germany and five times when the cost in the United Kingdom and seven times for added cost Vladimir Putin in russia of 18 a day we are told that any price increase the only one that doesnt limit drug prices we will stifle innovation depriving our people of the next cure for the be taken seriously it is a sobering canswer with the skyrocketing cost of Prescription Drugs and then to separate from the next cure for diseases but our examination of your company that they are not investing nearly as much on r d dictionary hypothesis for the salaries of the executives they is the price 27 different times before bringing it to market more than two decades ago 7114 for a monthly course has your company ever justify these price increases by claiming the revenues are used to invest in Scientific Research and development . I only started late 2017 andpa actually we have decreased. So the fact youre talking points that page five show your executives being directed and justified pricece increases so the company can invest in research and development so its from what we heard from our colleagues today that directly contradicts the talking points. And those that spent the least amount of money on r d with pharmaceutical companies do you know how much compared to what it made and profits . Understand you are relatively new to the company. Let me give you the details. Your company has made more than 34 billion from capac soundbites 2 percent of that was r d expenditures from the foundation. And then with a simple r d expenditure from 2015 with their been multiple price increases since 2015 how do you justify that to what we saw in the beginning of our hearing filling their car and their houses and justify increase seeing the prices of this desperately needed drug while there are no investments of scientific investment while those are imposed . Are you supposed to clean house . They were in financial trouble and a number ofum reasons because the associate price decline. That meant i fall into basic so they can honor their commitments. Your time is expired. Matter chair this is precisely why we need to give the government and medicare to negotiate for lower drug prices because taxpayers are getting ripped off on big pharma. I agree. You are now recognized for oug. Minutes. You hear both sides discuss the problemsms we face with high drug cost heres what we agree on miracle drugs that cure cancer, cure the illness is that we have do no good of our patients cant afford it. The price of insulin that has been around 100 years that doesnt require any research or development ought to be stopped and the difference with my friends on the other side of the aisle may say let government get involved. On our side you heard a lot of different testimony about hr 19 go lets look at the one thing that helps the system five and thats the competition. So take a look at it. It stops the exclusivity of . Like insulin that have been around for a long time the prices to be hiked up and where a company will say to introduce a drug there is no difference with a higher price when it does the same thing as the drug thats the thing we ought to be looking at i urge my colleagues on the other aisle to look at this Public Disclosure pricing not to be highlighted i urge you to look at hr 19 what im interested in is the pbm code any panelist or witness going to the pharmacy benefit managers and how it affects drug prices . Anybody . Congressman thank you im happy to give my perspective. First off all the pricingd systemsy is really complex and our objective everyone that has on needs medicine has access. But if you cant afford it then what good is the drug . And now we need to help patients with affordability programs and where we would like to do more. And with that copay assistance to be extremely helpful and then to introduce thef outofpocket. And specifically to your question of pbm that plays the Important Role so our concern the significant rebates and discounts that the industry provides for some medicines dont make their way to the patients at the pharmacy counter so those should be benefiting from those rebates and discounts. And then to be supported on reform and to realign incentives that this can make a real difference. Me the way get us a blueprint. We will do just what youou sad if the insulin is so unaffordable how about you the the way with that . How about the other witnesses . Playing a significant role to consolidate and negotiate on other customers to take care of the patients that are insured. And over the lifetime of the pharmaceutical product the rebates typicallyly increase somewhere between 25 and 65 percent and then to see those actually passed on to the patients there has been a lot of debate that the rebate structure could be more transparent. I am running out of time. So the groups that they are selling to help us with that transparency i yield back. You are now recognized. Thank you very much madame chair particularly thankful that you are holding this hearing. Five months ago i was reelected again to fill the seat that was previously held by my dear friend of 42 years congressman Elijah Cummings i appreciate the comments i heard earlier with respect to both of you served with him and miss him like we all do. The congressman represents the seventh Congressional District and throughout his time in congress he championed a lot of things but nothing more dedicated than the effort to lower the cost of Prescription Drugs. March 8, 2017 the congressman went to the white house to meet with President Trump to talk about a key piece of legislation during the federal government the authority on de authority to drive down the price of Prescription Drugs. With a guaranteed real price protection of soaring prices of these drugs according to his own statement following a meeting that day chairman cummings said he seemed enthusiastic about the idea and pledged to Work Together to pass the largest it one the legislation despite numerous a good faith effort for followup President Trump never responded. He abandoned his commitment to work jointly and if in its tcurrent form he would veto it. We are here today because President Trump failed to fulfill his promise. As a result seniors and retirees continue to face a measurable suffering simply because they cannot afford to buy up or take a shot their pain and suffering cannot be quantified the collective cost of the greed of big pharma can be calculated. For example take the Pharmaceuticals Company which we have heard from today and hetheir ceo a drug as we have all known to be used effectively to treat multiple sclerosis. Since 1997 raising the price of the drug 27 times. Twentyseven times to the current price of 5800 a month. Nearly seven times more expensive than when it was first introduced between 2002 and 2016 the net sales increased from 411 million to three. 3 billion. So i would like to start with you and we are challenged by time but the good thing the hearing will go on for a while but its my understanding that tivo negotiates with those Like Veterans Affairs . Thats correct. Also my understanding it does not directly interact with her or negotiate with medicare . Is that corrector . We do with the meta cap plans those go by the Insurance Company typically and with the insurance provider. If they negotiated directly which is what im asking in your opinion does that lower theat cos cost . It could go both ways because it depends on the circumstances how many patients are under the plan you are discussing. So in all likelihood the answer would be yes i thank you would agree with that. Otherwise why even enter into negotiations . That year the average net cost after discounts the v. A. Paid 2019. It was 4200 twice as much though thats quite a difference in a drug going to two different agencies in the government because it prohibits one agency from not negotiating at all. My time is about expired but in yourbim aut opinion in the l6 months what do you suggest we do at this point in time as a legislative body . What you suggest americans do whose hands are tied . Your time is expired you may answer the question. Uc thank you very much. There are two parts to your question. This is a very typical question of a complex system with many different players but its important to secure innovation we can all agree to that and its important to try to make it slightly less complicated because its difficult. And then is a very simple model and then of course that sells 1000 and pieces at a time cheaper than if you buy one at a time so that is driving the overall cost the other is what about compared to right now . That the price has collapsed the irony the reason i came to the job i have today because at the end of 2017. But to use the word collapsed after you raise the drug price 27 times did collapsed by 2 percent is that a real collapse . We had to be carefully we use wording to suggest to the American Public that after you have raise the price 27 times that it collapsed is a little misleading. You are now recognized for questions. Americans pay too much for the healthcare and the rising cost of Prescription Drugs bipartisan cooperation. Now more than ever we need to ensure patients especially those of existing conditions have access to affordable Prescription Drugs having traveled meeting with patients and hospital administrators and medical professionals who have repeatedly told me among other things, the best way to tackle the issue is to address patient reform and to get generics to market faster Price Transparency solution so they know the true cost of the medication theres been discussion today around hr three a government centric approach to allow the government to set prices to force negotiation w and less innovation in the pharmaceutical drug market. Dr ignoring the good bipartisan work done on this issue to make significant progress to lowering drug prices. Anssng hr 19 introduced by energy and Commerce Committee walden would improve Price Transparency into shop like a true consumer to get to market faster and encourage innovation instead of stifling it so some of the colleagues in Congress Moving toward socialized medicine and such as revlimidt and other drugs. You are on mute. You may answer the question. Yes can you hear me . Im a physician by training and to have the opportunity to live in multiple countries and working and living in the us for most of my career and access to new medicine for patients is another priority. I would like to emphasize when we introduce a new cancer medicine in the united state states, that is available to patients immediately and make sure it isis affordable and with a significant delay with access to medicine one of my experiences is multiple myeloma and those with multiple myeloma after five years to 50 percent in the last ten years but i do know the medicines responsible are still not available and then to address the challenges for the comorbidity for those patients of course. And to make sure they have the experience. But it is absolutely essential and that we are able to provide a new medicine immediately. Ive learned several times during theha hearing this morning the Pricing System in the us is complex. My colleague from texa texas, representative cloud had a chart that is just one part one part of the entire system off manufacturing. To the witnesses who has a role other than the manufacturer of the drugs . Is that correct . Thats correct. If we have a complex system and there are many parts if we really want to get down that the drug is produced and delivered to the patient in a costeffective way to be affordable instead of just one part of the supply chain that would invite everybody to make sure to come up with a solution to benefit us rather than just the messaging. I yield back. The chair recognizes ms. Wasserman schultz. Thank you madam chair the competition is crucial that someaf Drug Companies have resorted. Turn your video on bylaw we have to have on your video when you speak. My video was on my end. Can you see me now . Yes. Thank you. With competition is crucial to ensure brandname drugs become more affordable but some have resorted to tactics to delay competition would like to ask a few questions about celgene use of the Safety Program and therapy treatment so the high cost of Cancer Treatment so what that ram strategy ensures that they are move safely am sure you are familiar with this program and the manufacturersre is that right . Madam chair . Please unmute and answer the question. I did and you are correct. And due to the threats for pregnant women that is something i can certainly appreciate the for the intended purpose. That is the goal of the program. Also using as a way to delay . We did not and sell samples of products to generic and with that indemnification and proces process. This is exhibit 11. The second key discussing point using the program as useful for prevention that just means to delay generic competition there is no other way to be thats why will ask that again doesnt try to prevent competition yes or no . You are looking at a document whose definitionwh was seen to be exactly that. Ac the slide and i understand some of the words but i dont know the context. S , on spirit the generic manufacturers would need to replicate the exact same standard with the branded version. As long as the generic word in fact meet the regular standard, yes. According to the fda and then to have fda approval. And that the delay cost consumers 237 million and then to keep those competitors at bay . This is also true it even tried that even tried to obtain additional patents on it itself . I will be with the second question and in with the statute and regulation a patent on the program that we created in conjunction with the fda for the safe distribution of medicine one dose and a pregnant female could lead to severe one birth defects. The fda very specifically says the generic manufacturers are a safety concern and clearly in their own presentation has the encroachment as a key goal anyone with common sense at understands you are trying to block thankfully congress has created any appropriate usage and this demonstrates how they continue to exploit those loopholes regardless of the strategies that your company has followed it is unacceptable and as a cancer survivor and i strongly suggest of the things that come to life here the way you handle the process to access the materials they need i yield back. First of all doctor when did mr. Meyer squared a choir celgene . November 2019. Last year. And what was the list price for revlimid immediately prior to the acquisition . I dont have that she tear. I was mentioned before in the hearing. Did the price increase dramatically in january 2020 . We looked at the price of all medicines and when we do that there are multiple factors our investment in r d and considerations to affordability increasing the price 6 percent. Have there been any price increases this year . Spirit just the one price increase. Our practice since 2018 has been to limit price increases only to the medicines where we have significant Clinical Research programspr ongoing and when you look at the net price of the total per folio in the us since 2018 it has been flat. I have a question for you mr. Scholz. As i understand it entering into an agreement with amgen which appears to be a pay for delay contract. Is that accurate . It mustve happened. Im sorry. Is there a payment made to delay the introduction of a generic . I am not aware of that but that is the. Before i dont know anything about it. You dont know for sure if there was such an agreement or not . No. Im sorry i dont. Thats almost incredible but thats okay. Coming back to the doctor is there generic competition currently on the market . Congressman there is not because revlimid has and through 2027 so what i can tell you is that those patterns were reasserted in a secondary review because of the strength and those important innovation in the development of revlimid and there will be patents and generics in the next few years began 2022. Some critics have said this is the same as the drug as flutamide is this the same or not . That is not my understanding revlimid is a completelyen Different Program has started to synthesize hundreds of compounds it belongs in the same class as other medicines as it always happens in the industry as a safety profile and efficacy profile clearly advance the treatment of multiple myeloma and an independent medicine. A more broad question before i run out of time, right now it seems to me what we see on the United States per capita we pay 50 percent more for pharmaceuticals in canada or japan or germany and twice as much as italy and ireland. To what do you attribute that . It is a dramatic difference. The difference comes from the fact innovation is recognized and this is the reason why the innovation based industry primarily a us industry takes place in the us. And then in the case of Bristolmyers Squibb we addressed 10 million per year into research and development with those 13000 dedicated scientists working at the company and the reward of innovation is important to continue to fund r d revlimid has made a very big difference for patients at the samee time we will invest more than 2 billion in the development of the multiple myeloma medicines some of those have extraordinary innovation and the reason we can do that is because we have a system to reward innovation and that is when we should Work Together. Your time is expired. I recognize mr. Sardines. Thank you madam chair. Can you hear me . We can hear you and see you. T thank you. Thank you for the hearing. So to those who indicated sorely missing congressman cummings on this issue. He was a bulldog and the president talked a good game how the word take on the pharmaceutical industry. E consumer or patient the pharmaceuticalad companies took part to hike up the prices of these drugs but nevertheless i dont think that its fair to try to put the blame on to the pbms its the pharmaceutical companies. 2009nd the average price after removing discounts was 294 and then was 396 and in 2018, it was 590. So the net price more than doubled in that time. As it fair to say it increased at a faster rate than any discountth were to others in the supplyly chain . Mr. Alles. Can you hear me, congressman. I dont have the numbers in front of me but i trust the numbers you provided are accurate and would present a rapid increase of the price you described. The unique molecule you heard the use of discounting other contracts was reallyui not required. It affects on average about 50,000 patientsat a year in the United States. The new cases is about 25 to 30,000 a year so its very much one of those products that is available and medical hematologists will prescribe it as we describe specialty pharmacies so it isnt really the complexity other than the Risk Management program we see with other projects. To reclaim my time with other mechanics as an excuse of why the prices skyrocketed and more than tripled between 2005 and 2019 thats what we saw in terms of the price hike so that falls on the company. Niu are in the position having to explain why its such a significant increase. Unlike revlimid, there been significant rebates for theug drugs, is that correct . Thats correct, yes. Even with these rebates, the net price began after by more than 75 in eight years is that right . Im not aware. I want to congratulate you on being able to answer about 50 of the questions by saying you were not there. [inaudible] it would have been nice to come equipped a little bit better with what the situation was at the company with respect to these drugs prior to entering because in some ways you have a responsibility in this perspective. But anyway, in any event, the net price jumped from 22 in 2009 to 3,113 in 2017 it was 3,880 and its only increased as we discussed when the generic option came. So there is a role in the pricing and again i dont have them off the book but clearly the pharmaceutical companies are still a major culprit when it comes to the price gouging and that is why we are bringing this attention and with that i will yield back. The gentlemans time is expired. Mr. Higgins, you are recognized for questions. Ythank you, madam chair and Ranking Member for holding todays hearing which is focused on a subject that affects everyone in the country. We are here today to hear from colleagues for a solution to the issue about drug costs. I have issues with hr three that resulted in a huge expansion of the government control over patients healthcare that was the result in access for americans drugs and treatments. We were generally worried about this issue and we worked on compromised legislation rather than messaging bills to do zero bipartisan input and very unconstitutional language in my opinion. That being said, we must recognize as a nation its part of a legitimate narrative across the country we have genuine complaints about the price of pharmaceuticals so you gentlemen that appear on the panel today have to answer some difficult but legitimate questions. Introduction of generic drugs. I want to ask mr. Caforio. Regarding generic drugs introduction into the marketplace generally g produces positive economic benefits for consumers. At least by the essence of that statement, would you agree with that . Congressman, i totally agree. In the interest of time its understood across the board when generic drugs are introduced into thegs marketplace, then needed pharmaceuticals become more affordable for regular americans and its the cornerstone of the concern and why youwh are here today. So, you stated in response to another colleague you mentioned the drugs you introduced are uniqueac and generally we would agree with that, but would you please address pharmaceutical companies tendency to make very small changes in the formula of a drug and therefore extend the period of protection and delay the introduction of generic drugs or market that very slightly changed formula through to the Insurance Companies over the Management System that exists. Talk to us about the first slight change in the formula majority and why should that stop a generic drug from beingo introduced, to me that is gaming the system. Thank you,nk congressman. Let me start by saying that our policy is meaningful innovations and to reflect meaningful and important innovations. In many cases it is about new treatments and some cases its about new dosing. The use of different manufacturing technologies. But our approaches to patent meaningful innovation that is beneficial for patients. A meaningful innovation in the formula that exists that is approaching the patents and you are looking at this at the introduction of generic drugs with that same formula would you say a meaningful change in the formula thats not recognized across the board by the medical field and by doctors if the doctor says it is a meaningful change, then how is it that the board of directors and pharmaceutical companies determine, explain to us what you mean by meaningful change. Sure. I believe that for most pharmaceuticals at the time we introduce aph new medicine we ae at the beginning of a new Development Program that lasts for many years. The way we think about meaningful changes are changes organized that can be patented and innovation that is therefore protected. We think about across the entire period that we invest in the medicine and we do that in the contextth in which we recognize the importance of generics. In fact 90 of the generics in the u. S. That allows us to be able to continue to have a sort of innovation and so i think the system is designed in order to protect innovation that is meaningful and determined by us as researchers and it grants us with patterns and the objective the gentlemans time is expired. You are now recognized for questions mr. Welsh. Thank you madam chair. I think one of the reasons a lot of us are focusing on the executive commendation is to model this higher prices, higher profits and higher bonuses. Its not just about the individuals that are making significant amounts of money. The executives. Its about the significant burden on the companys purchasing employee sponsored healthcare or employersponsored health care. I want to ask a little bit about that. First of all, doctor caforio, between 2006 and 2017, according to the committee report, the top executives were paid 400 million. Can you address that . Will im not familiar with all of the details. Does that in any way seem a little on the high side to you . I cannot comment on those figures. I am not familiar with them. Its in the report. Im asking your opinion about whether that amount of compensation, 400 million is on the high side. I have received the reports from the beginning of the hearing. I dont know what it refers to. That would have been a decision of the board. Im telling you first of all what is in the report, so it is 400 million and that period what time. Executive between 2012 and 2017 it was 119 million. Now, sales of your product revlimid have increased as a result of the Medicare Part d program; correct . Sales increased for a number of reasons. The primary is the number of reasons is used for. You are familiar with Medicare Part d. Its a benefit to seniors and it enables them through the government to purchase the product; correct . Absolutely. The price of one pill is about 719 is that correct . Im sure it is correct. Let me go to mr. Alles. Is it true that you raised the price 23 times after it was broughtim to market in 2005 including as many as three times in one year . I will agree that the price has gone up. I dont have the number in front of me but specific to 2017, i do recall there were price increases that year, yes. Increasing the price again after acquiring celgene, correct . Mr. Caforio, would you unmut your self and answer the question. St thank you, chairwoman. Im sorry it appears yes we did increase the price at the beginning. Do you know how much the outofpocket expense is to the beneficiary after the government pays these increased prices . Yes, congressman and i know it can be significant. Its 15,000 a year and the average probably gets a Social Security of 22 or 23,000. Do you know how much it costs the federal government through Medicare Part b . I know that it is a widely used medicine. Its 4 billion. I really dont understand why you dont know these numbers because they are the numbers that come down to the individual patient who cant afford the outofpocket even with the help of Medicare Part d. Did you provide part d plans for revlimid . We provided all discounts yes. I dont know that we have any of that information. Would you provide the contracted price reduction information to this committee . If there were discounts, we provided them. We didnt discount revlimid through commercial lands widely but we will followup with any of that information. I dont have it with me today. Has bristolmyers begun providing any discounts to medicare for revlimid since it acquired celgene . Congressman, weve continued to provide those discounts. I do want to go back to this executive pay. Ultimately that is paid for by taxpayers, employers and individual patients. Do you have any reservations about 100 million being paid to the six executives over two years . The gentleman may answe answs question,ay please. [inaudible] im grateful. The decisions about compensation is made by our board of directors and whether its about our executors or any employee in the company, they are structured in a way that looks at compensation across our industry and creates the conditions for us to be able to attract talent. The gentlemans time is expired. If you are recognized and may go over for as much time as you need because mr. Welsh did go over time, tomac. Thank you madam chair. I dont believe we can have a credible hearing on unsustainable drug prices without mentioning pbms. I know a few people have mentioned that today, but pbms are unnecessary levels of bureaucracy, which according to every independent pharmacy in my Congressional District have no rhyme or reason for the bills they send to the pharmacies. I think that is something this committee needs to look into and i hope, madam chair, moving forward, that that is an area we cane have a bipartisan agreement and explore what role they play in unsustainable drug prices. But we are talking about drug prices and obviously it iswe a concern for all of our constituents regardless of who we represent. The constituentst also rely on new treatments and cures we being developed. Teva is the Worlds Largest manufacturer of generic and Bristolmyers Squibb one of the largest brandname manufacturers. So i would like to ask you both the same question how do we balance these objectives . Thank you, congressman. I think that balancing the objectives and bringing new treatments and cures to patients we need to ensure the medicines are affordable to patients. I do agree that our system requires change, and i know Bristolmyers Squibb industry is really open to working with this committee, with congress to find ways of evolving the system to help patients more. It is possible to find that balance. And there are some measures we can take immediately allowing the companies to provide patients with support, Financial Support and it would be helpful to those that began very rapidly. Similarly introducing the cap in medicare would alleviate a lot of the burden that exists today. Ultimately we need to Work Together to think about how the system evolves and to account for this innovation. Mr. Schultz, from a generic manufacturer standpoint, how would you answer that . Thanks for the question. Id like to give a slightly broad answer. I think the system basically works well on the fact most of the innovation takes place in the United States and a lot of new medications have been introduced over the last lets say t 40 years due to the syste. The system basically rewards innovation by granting patents which means for a period of time, the pricing is in the normal competition rate and the reason thats necessary is less than one out of a hundred initial projects make it through. The rest may fail on the way. The basic idea works extremely well as we see in the big picture which has been partly due to pharmaceuticals. That being said you cant keep giving that sort of benefit that gives a better pricing situation when you launch this product. At a certain point in time. Im happy to report that the generic industry does work very well and provides high quality medication based on Research Innovations and it provides the products high quality at a fraction of the prize an price i talk about the price reductions, i think that is really the case because most of the generics in the United States today probably have a net price less than 6 so a price drop of more than 90 . We saw a graph earlier today how its bending downwards in the United States. Thats a combination of competition and innovative drugs but also the competition from generic drugs. The benefits to be seen in relationship and so therefore ithe presence of many is a part of balancing the market. [inaudible] let me uncorrupted ask you this because we are on the clock and ive goneck over little bit. What is an adequate amount of time for a brandname company to invent and get a patent on a new drug, what is an adequate amount ofnd time in your opinion for te patent to exist before generic manufacturers can come in and recognize the fact obviously the brand Name Companies spend a lot of money on research and development. We have all gone over that. But from g your standpoint, what is an adequate amount of time before they can come in into the marketplace . It is a fair amount of time. The issue is that sometimes, im not saying in any way they would ever do that, but some companies have made you could say a lot of patents which are not that substantial and theyve had to be challenged. Thats part of the model we have to challenge this o many patents that are not living up to the innovation standard and then eventually the generic can launch. You could argue somehow its not the original patent thats the problem but its many surrounding patents that do not have the innovation they ought to have and its something that could be looked at more to avoid you get so many around the product. Thank you, madam chair. My time is expired but i look forward to working with you on this issue moving forward and i certainly hope that we h can examinee every other factor that contributes to the skyrocketing. I look forward to working with you. Congresswoman you are recognized for questions. Thank you madam chair i think you for hosting this hearing and to the panelists. Let me start off by saying that what you do is remarkable. You are saving lives with these innovative drugs. 50,000 americans who have blood cancer that it can assist with hithis remarkable, but here is e issue. As the president often saysen wo is the socce sucker here, the ud states is the biggest spender, the government of the United States is the biggest spender of drugs. We are at 44 and in a number of years we will be at 47 , so the taxpayers are picking up the tab for all the expenditures of drugs in this country. If we look at that and then we look at celgene in just that one year it raised the cost 15 in just one year that was 3. 3 billion in medicare spending in that one year without one drug between 2009 and 2018 half of all the revenues generated in the world came from the United States, 33 billion, and we represent 4 of the population in the world, so at one point or another we have to say are we just suckers. Now you have a remarkable drug, but your price increases have put this drug out of the reach of most americans. Id like to first put up on the screen a graph that shows the price from 2005 its gone from 215 a pill to the price today of 765 or 763. The price for a monthly course in 2005 was 4,500. Do you know what the price is today . I believe its in the 16,000dollar range. Is actually 16,000. So, why did they raise the price by more than 250 over the last 15 years . During that same time period the portfolio grew from two medicines. You are not on mute, i can hear you. Im asking why you increased the price 215 from 2009 to over the course of 15 years. To fund what became a very important portfolio. Two products are now ten products including pancreatic cancer, Breast Cancer, lung cancer, different forms of blood cancers and severe in some literary diseases, so approximately 30 to 35 of that revenue and the price increase that accompanies the generation of that revenue was reinvested into the Research Development that had some of the most important medicines we have not talked about today. Reclaiming my time, you evidently received remarkable compensation in the last two years that you are the president or ceo. You and i believe six of your colleagues or five of your colleagues received upwards of 400 million. Why are the taxpayers of this country picking up the tab for those extraordinary salaries on top of picking up the tab for the increase in a drug that went up 250 so you could fund other drugs . At some point, the federal government cannot be the ultimate soccer here. There is the one medicine in the Pharmaceutical Company is often the drug and the revenue that pays for the innovation and failures across a number of years of development. As my colleague spoke to the compensation packages are arrived at through competitive down analysis and from our independent board of directors. We need a competitive plan to sustain the company. I think my time is expired but if i could ask just one more question. I want to know what each of you are willing to do to bring down the cost of drugs for the u. S. Taxpayer. May i go first . Of course. Thank you. I think the discussion today is illustrative and that all stakeholders in the industries, and of course all of you, we need to come together and find as an objective and outcome of legislation how to cap outofpocket costs for patients andd beneficiaries so they have the predictability and liaffordability that we all wan. I think the way to do that is for the industries to come together with congress and Work Together on that goal. The way we pay for that requires a lot of give and take but if that was the goal i think we would really be helping the American Consumerr and the american taxpayer. For my perspective i would like to commit to two things. Working with the committee to understand. Specifically i am supported as i mentioned before a company like ours to provide Financial Assistance if that will be possible in the future. It isnt possible today. I am supportive of working with the establishment as well. Thank you. I yield back. The number one thing is to ensure we are always developing and launching so that they are accessible and affordable for all americans and also work on increasing transparency and be it medicaid, medicare. Thank you. Thank you. Congresswoman you are now recognized. Thank you, madam chair. I would like to ask a question to mr. Caforio. In july, celgene announced a policy that would limit the price increases too, and i quote, no more than once a year at a level no greater than the Medicaid Medicare Services projected increase in the National Health expenditures of the year. So, my question in the beginning of this year, they grade the list price to 763 per pill and that was r a 6 increase. The projected increase in the National Health association for 2020 was 5. 4. So it appears that you have already failed to meet that part of the pricing pledge so i asked this question have you committed to not taking any other price increases this year . We will not take additional price increases this year. Our practice has been to look at a number of factors and limit price increases and only to those medicines and that practice asev a result to the total portfolio. My question to my colleagues and to you is do we need to put regulations because it seems like thats the invisible line how the industry decides what we see on the other side trying to protect the American Public because a drug that isnt changing, how are you increasing when its been approved, the trials have been done so where is this increase and will you commit here today to stop raising the price . There are two important considerations. First of all, importantly when a medicine is per first approved and introduced its often the beginning of a research and development process. In fact, we heard today that it was approved in 2005 for three indications. Research continued. I think what is most important here is the research and Development Expenses we have the investments we make are orpresented at the value market portfolio. When we think about research and development choices, they are redirected at the total and as i mentioned earlier, we are currently investigating two c nw medicines and we have plans to invest over 2 billion in new medicines so thats our strategy. So this is what is confusing is if you are testing other medicines you will charge to that so how does that cost get placed and does that mean this medicine will continuously keep moving up and increasing in cost although if you implement another drug you are going to tap onto that drug the rmd cost so it seems like double dipping here and that is the part im frustrated with and dont understand. Yes, i am happy to provide my perspective. What im know is that of the new medicines developed at this time, many will not work and will not be approved. At the time is expired. Please answer the question. Does that mean the drugs that you are testing that you put on an existing drug to cover the cost of that is that what you are saying . We look at the total investment and then the total Portfolio Market and the objective is to have a system in which thats the way our industry works and how we can fund many high risk costly r d programs. The gentlewomans time is expired. Thank you. Mr. Gomez you are recognized for questions. Thank you madam chair. I want to go back to the issue of and protection. I think everybody recognizes that existing drugs can improve patient outcomes. But we have also seen a Drug Companies use different versions to extend the monopoly Pricing Power. The gentleman from louisiana was even asking questions about it and he isnt considered a liberal by any stretch of the imagination. The Pricing Power was also a key focus of the negotiations. We successfully eliminated the Market Exclusivity which would have an insured and we turned it into one of the most progressive trade deals in the history of this country. Inpr the past 385, republicans d democrats so this issue is a big issue. I would like to ask a few questions. Like the original that was taken daily this one is taken three times a week. Studies show its no different between the 20 milligrams dose. Is that correct . Reclaiming my time its actually yes. Theyus issued a press release. After the findings they were to be taken three times a week but they suggest they opposed pursuing this research. Ulone reported they were strongy against and had no rationale or value they were aware of the concern and the fact that such a study has this value. They are on the business side of the company, isnt it . Its on the business side of the company, correct . Not necessarily, no. They would typically be organized in the rmd organization as a way to achieve the monopoly in the market its a 20 milligrams dose and describing as one of the best examples it would have been more convenient. Mr. Caforio whether there is no scientific improvement or meaningful motivation to do it three times a week. I take back my time. To take two injections im assuming all you are doing is trying to find a way. The scientists said dont do it. It doesnt approve the outcomes. Nobody believes the fact you are trying to improve the outcomes and bottom lines and undermining they pay more for it. If anyone would like to respond to his questioning. Many of these thoughts have to be injected and over that course years ago it would be normal to have a product to reconstitute once a day, twice a day, three times a day. Not very easily in those different issues. It should make it easier for people to take the drugs and some people who do not know about it will ask what is the difference. When you skip those thank you, chairwoman maloney and thank you to all the witnesses for being here today. They needed these drugs at a cost of that will nots break te bank. Im the cosponsor of hr 19 the house passed hr three. The Congressional Budget Office estimated that at the lowend this a legislation would prevent 30 gate cures from coming to market while others said it would put more than 100 fewer in the hands of patients. Either way, just one less lifesaving drug on the market is worth too many. To put lifesaving prescriptions into the hands of the patients at a reasonable price. How much did they spend yearly on research and development . Now im going to pose the same question to you, how much does your company spend on the research and development . In the last year before bristolmyers acquired celgene, my recollection is it was 5. 747 billion of the revenues that here. The research and development is utremely significant. I have many examples of the extensive Clinical Development aprograms as we think about the advice ofhe medicines of course the other one is making sure every patient can have access to medicines. How did the cost of research and development affect the pricing of your new drugs . Quite unique considered an orphaned disease. The diseases weve been talking about today, leukemia, et cetera, these are very Rare Diseases that was approved during the time approximately 4,000 people in the United States per u year. So we have targeted to these needs on the belief first by the drug act that we would over time and build a Successful Company for very small rare difficult cancers. How does the cost of research and development affect the drugs . There we spend money as i mentioned before too the tune of the u. S. Dollars per year but similar its much more high risk Innovative Research and they make it finally so of course there is a cost for the failures allocated. Thank you. Many of my colleagues today would have us believe they are necessary for the wellbeing of the American Public. This means the government could come in at any time and take back patents from Drug Companies. How do you think they would show innovation . Yes, congresswoman. Continuing to recognize and rewardiz innovation in the intellectual Property Protection is the reason why no industry can make longterm investments in research and development. Anyone else . Its the patent system of the 15, 20 years nobody would undertake the risk because there would be no the gentlemans time is expired. Thank you chair maloney for this hearing and the Committee Staff for all their hard work. Mr. Scholz, im sure serving as the ceo, you may have little to no contact with how your actions hurt people like my residence in the 13 districts. Your actions have consequences as youve heard from many colleagues. People13 like lisa who pays 6,0 per month for her medication, and an additional thousand for fatigue and balance. Mr. Schultz, i know it may not seem like much to you, the ceo of the data pharmaceuticals, but at least it isnt 7,000 of disposable income per month. The vast majority of americans dont. I understand that the drug use was first introduced on the market in 1997 and the acquisition at that time was 8,000 annually. Today it is 70,000. So, yes or no do you believe it is reasonable for lisa and others to pay nearly 70,000 a year to access . I also know the Drug Companies mislead the public byp claiming terrible programs help ensure that patients who need medication can get them but those programs do not cover everyone and they are not reliable for patients and actually drive up the cost for many residents. In fact i actually asked lisa who is on Social Security if she was able to access the relief and she had no luck. Documents obtained by this committee suggest the programs actually serve the companys own financial interests. Does your company donate outofpocket costs . Would you consider donations to the foundations to be Financial Investments . T internal documents provided to the Committee Show they did view the programs and Financial Investments even describe them that way. The investment in Medicare Part d by 40. 3 million. They also estimated that it met sales with a decline by 45 million in 2011 if your company were to, quote, eliminate medicare past investments. In my district we call this a side hustle. The Pharmaceutical Company makes these socalled charitable donations so you look like you care about sick people but these are just another scheme by your corporations to make money off of sick people. She isnt part of the hustle and shouldnt be one. Lets turn to the programs for the copayments with commercial insurance. Again this is how you are misleading the public. According to the internal now and i was as they spend money to the program in 2013. But in return, you all got 257 million back. Thats 371 profit, mr. Schultz. There is no cure now for ms we need this because they want to continue to contribute to society and make an impact. Mr. Schultz youu need to go back and stop misleading the public to make sure these drugss those that how the quality of life jeopardy and the right to live in jeopardy and ask my colleagues to please pay attention. I yield back. I now recognize mrs. Presley. Thank you very much madam chair i appreciate we can honor our beloved children cummings investigate. I reported the seventh Congressional District and one of the most unequal in our country. To see these disparities play out when it comes to health and economics. Let me be clear the lack of access to affordable lifesaving medication is an injustice it represents an attack on the basic principles of healthcare as a fundamental human right and with the commonwealth of massachusetts Congressional District which i represent is the highest rate of new diagnosis of multiple myeloma and black residents are more than twice as likely to do see my dash diet disease a cancer that compromises an individual and places them at the increased risk especially during the ongoing coronavirus pandemic the Company Celgene raised the price of the lifesaving drug 215 up a 719. I appreciate your succinct answers with my colleagues i will ask the same for me with my questions for the record, yes or no, do you believe that pharmaceutical companies should prioritize people profit . We can only do well by doing good. Yes or no. We have to take care of people us to be able to be successful so we have to pay our ties people and the medicines we develop for those diseases. According to documents of our investigation t o revlimid generated 51 billion of net revenue including 32 billion us alone to understand how you accumulate such massive revenue follow the money from thee beginning it was developed as a precursor drug which celgene fired in 1992. Now was this a new drug when celgene acquired it . Flow minimized was not when we licensed it from the rockefeller institute. It was an old drug with a notorious history causing birth defects. In the fifties and the 1996 as a drug effective in treating multiple myeloma did you know this was funded from grants of the National Institutes of health with taxpayer money . E i was not aware specifically the only one dish only funding was nih grant that would not be surprised if some funding was provided by the government p. Through three different studies a chemicalwo variation which was later named as revlimid was even more effective to treat multiple myeloma some more investigators working at the mayo clinic shows that revlimid also which we newly diagnosed patients did you know that these were also funded by nih with taxpayer money . I do not know the studies specifically you are referring to but i cant say with of limited and the discovery of limited in its initialal form was something that celgene uniquely discovered. Is only after the numerous federally funded studies that celgene invested in the trials needed to obtain fda approval isnt that right . The study sponsored by celgene leading to the new diagnosed of will, those was a large randomized trial runed globallys. We have the timeline which bears out only after these numerous studies that celgene did invest to obtain fda also the time they decided to invest their own money taxpayers and only contributed significantlyy in your was confident a of the billiondollar success in fact do you know the companies grossly underestimated the annual saleses potential do you recall writing that to a colleague . A solid document this morning i do remember writing that. It accompanied a paper regarding the study. So despite the taxpayer investment, so she reported it did not provide to Government Health care programs. This is a classic example efforts of people so well the people of the white house did not pay the taxes my constituents do and your Company Charge those same taxpayers hundreds of dollars to use the lifesaving medication. I hope you will discourage the companies you advised to control their greed and those taxpayers that undermine these investments to medicines are so high people cannot afford to stay alive it is about the right to live in the American Public deserves better. Ms. Ocasiocortez you are recognized. Thank you madam chairwoman is incredibly important hearing as many others have noted that was an incredible importance to our former chair elisha cummings. Thank you for participating today mr. Schultz and offering your expertise and insight. I want to talk today about my constituents with multiple sclerosis and the exorbitantpl cost they are facing in their diagnosis. Like to start by putting up two graphs with the price per day on five different countries. These graphs were created by your team here on the committee used seeing data that your Company Provided and as you can see here it was just 29 in spain 30 in germany but more than double that, 97 in the United States. That is a day to live be a similar 40 milligrams and 2016 cost 33 in germany, 29 almost more than four times that 129 in the United States. Mr. Schultz why is the price so much higher for people with multiple sclerosis in the United States than other countries . I back them but i can give a general comment. As discussed earlier the very early access in the United States often comes at the higher list price. Is what you see in the numbers. Here internal documents seem to tell a different story the best explanation provided as they are forced to charge lower prices and with our Strategy Plan for 2,072,009 to gather the price pressures. I have no knowledge is more than ten years before. Thats all right. Thank you thankfully we know and the answer is that itht was. Wallpaper forced to put pressure with the same twoyear. The company raise the price on multiple sclerosis patients by 60 percent in the same two years it was reduced in europe and when generic products under 2017 then the prices started to study outside of the United States the availability of generic actually has a decrease in the list pricen to most European Countries use external reference preceding . Thats right it is different from country to country there is reference preceding one placing. But what if its not in the United States . It is the list price and thats the price nobody pays there are a lot of able to go to pbms. Its my understanding its your testimony today is that European Countries have place to go she nations and the United States has nothing to do with the fact that it is almost four times higher in the United States than spain or germany or canada . I was saying in the us many different people are negotiating and typically is paid for on the table that is the consolidation of the pbms. One last question. Do people turn a profit in europe quick. Yes. Thank you. Ms. Poirier recognize. Thank you us euro celgene until fairlyly recently in my colleague established that you make will format a cancer drug to know the price what it was when i first hit the market in 2005 . I remember the number. Reclaiming my time it is 215 per one poll. Turnover was in 2013 . I can look it up i have in front of me. 412 per pill now more recent with about 2017 . I would say 700 a. But i have been front of me. 719 and today the cost 764 per pill. I am curious, do the drug get substantially more effective in that time to Cancer Patients need to oppose . During that time the development of government included six additional and theions some with, nd balance of patients. Reclaiming my time so discovered more patients who could benefit from paying 762 so using a drug patience to work faster . Or side effects headed that change the formula of the production to justify the price increase . The indication and changes of different patients with disease. I interesting and that what i am trying to understand fromno you is how did the christopher look at a pool and analyze it from 2005 and then today at 763 the same . Understand your question about the poor the manufacturing is the same. Thank you so to put that into perspective you hiked price by 500 the average Orange County senior has 528 left in their bank account after they have paid their basic Monthly Expenses the average senior cannot even afford one poll is emotionally nobody pays no space but that is not correct do know that if i share patients. The list price . I can imagine there are circumstances under his door and insured patients word place dash would pay the list price of specific circumstances. Returning to one of the number do you know this number . I thank you are referring to my compensation in some way. Exposure compensation in m 2017 being ceo celgene 200 times the average americans income 315 times the average senior get the Social Security. Of that 13 million, about two two. 1 million came from your companys yearly name targets and that was baseds targets any increase in the price of government will also increase your bonus by increasing earnings isnt that right quick. Of revenues increased and expenses do not then earnings will beexes enhanced. Thank you increase the price of revlimid will not have gotten your bonus do you know how much you personally received in bonuses over the last two years just because celgene raise the price of this one drug med one revlimid . I have a generous compensation i dont know the exact number. You received half a Million Dollars personally just by tripling the price for forbid. But i didnt get better treatment to get better got better at makings money just find your skill set price gouging. Into the clear taxpayers spent two. 3 billion with a revlimid medicare. When you acquired revlimid is that correct quick. If i. C. E. Has only been increased to reflect inflation it would be 286 according to the said inflation calculator will you commit to lowering the price of revlimid will . You answer the question. I cannot commit to that and that value that we acquired celgene. I cant commit to continuing thatrk to ensure patients that need revlimid have access. We are doing all we can to make thato happen. Just for the clarification a yes or no you commit to lowering the cost. Your time is expired. You may answer. I cannot commit to that. The gentle ladies time is expired, before we turn i want to address the members on the other side of the aisle who stated repeatedly throughout this hearing we should be working on a bipartisan basis this is a critical issue to the people of america i agree and we went to work on a bipartisan basis and chairman cummings tried to do so one of the first senior democrats to go to the white house after the election and met with President Trump on marchch 82017 he took the president s Campaign Promises at face value and then to finally negotiate for lower prices he ran on the platform. Chairman cummings gave the president a copy of his draft bill to do justid that. He asked her together and have asked to draft a bill and asked repeatedly for the president support that President Trump off the face of the earth chairman cummings sent letter after letter after letter to the president in good faith in a bipartisan way someone in april 20th, 2017 to reiterate his request to Work Together have a copy of it right here he has sent another one june 21st 2017 and i have a copy right here. Then he sent a third letter octh 2017 and i have a copy of that letter and i would like to ask unanimous consent to place all of these letters in the record. Do you know what the response was of the president . Zero. He never responded to chairman cummings again. To put the promise he made during the campaign to support the legislation to finally that medicare negotiate it with the pledge he made directly to chairman cummings of the white house to Work Together in a bipartisan way. So to my colleagues who are complaining we did not work on a bipartisan basis we should be directing your criticism directly to the president he went back on his promises and he is the one that refused times the effort of chairman cummings to Work Together in closing thin to work in a bipartisan way you will have sent so many letters from this committee to the president e avntk ma i wouldy view that as junk mail because they get so many letters from this committee. I think moving forward we need to pick some issues where is bipartisan agreement and this is an issue republicans over the past imposable hr 19 that as many of the things that many of your members reference during this hearing so the potential s is there i recognize the fact there probably isnt any mood for true bipartisanship the next 20 days hopefully after the election we can Work Together and move forward to try to do with our constituents want to get some type of reform with respect to drug pricing and with that i yield back. Thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjourned. Thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjournedns. Thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjourned. Thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjourned. Thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjourned thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjourned. Thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjourned thank you for your participation and comments i see you tomorrow at 10 00 oclock. The meeting is adjourned the house election so Committee ExaminesVoting Rights and combating misinformation this election year. Colorado secretary of state and member of the cuyahoga ohio county board of elections. And it one at 9 00 p. M. The governor candidates in montana is each other and on cspan2 9 00 a. M. Looks at mailin voting including House Majority and former attorney general a recorder. The Brennan Center for justice small table show a bit later on reimagining the former new jersey governor women from the us attorney and former solicitor general. To will arguments coming up at 10 00 a. M. With the pharmaceutical Care Management association federal versus state law governing regulation of pharmacy benefit managers and drug cost at 11 00 a. M. Regarding the religious freedom restoration act and monetary damages at issue of civil lawsuits can be filed against the federal employee and his or her own individual capacity