Rep. Katie Porter made another Pharma CEO sweat yesterday, during a House Oversight Committee hearing on prescription drug prices. Porter used her "whiteboard of justice" and a few sticky cutouts to dismantle a favorite excuse for high prescription drug pricing in the US: that we have to pay the highest prices in the world to ensure the companies can afford to do research and development of new lifesaving medical miracles. The reality, Porter pointed out, is that Big Pharma spends far more on advertising, executive pay, and enriching stockholders than on R&D.

Her sacrificial victim for the day was Richard Gonzales, CEO of AbbVie, which makes the world's top-selling drug, Humira. The Oversight Committee yesterday released a report detailing how much of AbbVie's profits have been driven by ever-increasing prices on just two medications: Humira, which is used to treat rheumatoid arthritis, Crohns, and other autoimmune and gastrointestinal illnesses, and Imbruvica, which is used to treat cancers such as mantle cell lymphoma.

In January, Fortune reported that AbbVie would be jacking up the price of Humira again, by another 7.4 percent. As the committee report detailed, since Humira was first released in 2003, its price has been increased 27 times, by more than 470 percent. An annual supply of the medication now costs $77,000 in the USA.

So it was time for Porter to debunk the notion that we need to pay astronomical prices for prescriptions so that pharma companies can afford to keep developing new treatments. Mr. Gonzales probably had to remind himself he's being paid very well — his total compensation came to over $24 million last year — which must have been of some comfort to him after Porter reduced him to an AbbVie cadaver.



After noting that AbbVie spent a total of $2.45 billion on research and development from 2013 to 2018, Porter got to the items that the company spent far more on, like $4.7 billion annually for advertising, and $50 billion for stock buybacks and dividends from 2013 to 2018 (hooray for the 2017 tax cuts!).

And of course there's the executive pay; Gonzales figured that comes to a modest $60 million annually, but Porter replied, "Try $334 [million] on for size."

In short, Porter summed up,

You're spending all this money to make sure you make money rather than spending money to invest in, develop drugs, and help patients with affordable, lifesaving drugs. You lie to patients when you charge them twice as much for an unimproved drug, and then you lie to policymakers when you tell us that R&D justifies those price increases.

The Big Pharma fairy tale is one of groundbreaking R&D that justifies astronomical prices. But the pharma reality is that you spend most of your company's money making money for yourself and your shareholders. [...] You're feeding us lies that we must pay astronomical prices to get "innovative" treatments.

Porter's grilling of Gonzales reflected the findings of the committee's report, which was based on 18 years' worth of internal documents and data from AbbVie and its parent company, Abbott Labs. Ways and Means Chair Carolyn Maloney (D-New York) had to subpoena the documents last year when the company refused a request to turn over the information. The report stated that

AbbVie pursued a variety of tactics to increase drug sales while raising prices for Americans, including exploiting the patent system to extend its market monopoly, abusing orphan drug protections to further block competition, and engaging in anticompetitive pricing practices.

In the hearing yesterday, Maloney noted that even as AbbVie raised drug prices in the US, it reduced them in other countries. Gonzales said, "The system you described is how it does work." And how!

For instance, as NBC News explains,

The list price for Humira in countries outside of the U.S. is much lower. The committee found that in 2015, the cost for a 40-milligram syringe of the drug was $1,727 in the U.S. while price range was between about $400 and $970 in Canada, the United Kingdom, Germany, Japan and South Korea.

Well yes, but those are all socialist hellholes without any freedom, don't you see. We need to pay higher prices to subsidize their leeching off all the innovation and R&D here in the USA, even though that actually turns out not to be where the money really goes. It's a talking point, and pharma's sticking with it.

The committee report also pointed out that unlike the Department of Defense and the Department of Veterans Affairs, Medicare is legally prohibited from negotiating drug prices with companies; if it could, taxpayers could save billions annually, but again, if we did that, how would shareholders make any obscene profits? Also too, NBC News notes, the report found that AbbVie "engaged in a series of anticompetitive strategies to block lower-priced biosimilar versions of Humira from entering the U.S. market."

All in all, it wasn't a great day for the cherished myth that's constantly used to justify the high cost of for-profit healthcare. You might want to bookmark Porter's tweet with that video, just to have it on hand the next time someone swears to you we have no choice but to pay through the nose for prescription drugs.

Now, if we could get adequate funding for immediate research on cloning Katie Porter.

[House Oversight Committee / NBC News / CommonDreams]

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Doktor Zoom

Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.

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