J&J, Merck, and Bristol Myers Squibb spend billions more on executives and stockholders than on R&D — Senate report points to greed and ‘patent thickets’ as key reasons for high prices::Senate report points to greed and “patent thickets” as key reasons for high prices.

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    15 months ago

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    Both of these arguments faced substantial blows in a hearing Thursday held by the Senate Committee on Health, Education, Labor and Pensions, chaired by Sen. Bernie Sanders (I-Vt.).

    “In other words, these companies are spending more to enrich their own stockholders and CEOs than they are in finding new cures and new treatments,” he said.

    PBMs work as shadowy middle managers between drugmakers, insurers, and pharmacies, setting drug formularies and consumer prices, and negotiating rebates and discounts behind the scenes.

    Rather, the heart of the problem, according to a Senate report released earlier this week, is pharmaceutical greed, patent gaming that allows drug makers to stretch out monopolies, and powerful lobbying.

    On Thursday, the Senate committee gathered the CEOs of three behemoth pharmaceutical companies to question them on the drug pricing practices: Robert Davis of Merck, Joaquin Duato of Johnson & Johnson, and Chris Boerner of Bristol Myers Squibb.

    The analysis found that from 2004 to 2008, the median launch price of innovative prescription drugs sold by J&J, Merck, and Bristol Myers Squibb was over $14,000.


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