Bloomberg Law
Feb. 28, 2019, 10:31 AM

Some Pharma CEO Statements at Hearing Could Invite Scrutiny

Jacquie Lee
Jacquie Lee

Pharma CEOs glossed over the full stories about issues like brand-name drug samples, R&D spending, and biosimilars, according to a Bloomberg Law analysis of their statements at a Feb. 26 Senate hearing.

Seven executives faced some skeptical senators in their high-profile appearance before the Senate Finance Committee. Committee Chairman Chuck Grassley (R-Iowa) reminded the CEOs at the start of the hearing that “it’s a crime to provide false testimony to Congress.”

The committee’s ranking Democrat, Sen. Ron Wyden (D-Ore.), brought up past hearings where he said tobacco company executives testified on Capitol Hill. “They lied that day,” Wyden said. “This committee, the chairman and I, expect better than that this morning.”

CEOs representing AbbVie Inc., AstraZeneca PLC, Bristol-Myers Squibb Co., Merck & Co., Pfizer Inc., Sanofi, and Johnson & Johnson appeared at the hearing.

Statistics about how pharmaceutical companies spend their money and set prices are shrouded in secrecy. In many cases, the public has to take drugmakers at their word when they note how much they’ve spent on research and development or why they raised prices on a product.

Here are some of the assertions made during the hearing that raise doubts.

Drug Samples

Sen. Steve Daines (R-Mont.) asked each CEO, “Has your company ever withheld drug samples from generic manufacturers?

Each said “No.”

Generic companies must prove their cheaper generic drug is just as safe as the brand alternative before they take their product to market, and they need samples of the brand-name drug to demonstrate that.

Generic drugmakers have complained that brand drugmakers have delayed approval of generic drugs by refusing to provide the samples. That has gotten attention from the Food and Drug Administration, which started publishing the names of companies that generic drugmakers say won’t comply.

Pfizer and AstraZeneca are on the FDA’s most recent list of companies alleged to have gamed regulatory procedures to withhold drug samples from generic drugmakers. Pfizer has four inquiries related to how it releases its samples, and AstraZeneca has one.

The CEOs’ answer may not be misleading, however, as the FDA notes that being on the list doesn’t mean the agency has “independently investigated or confirmed the access limitations described in the inquiries received.”

R&D Investment

In his opening remarks, AbbVie’s CEO Richard Gonzalez said his company is “dedicated to developing new innovative medicines for some of health care’s most challenging diseases, such as cancer, Alzheimer’s, viral infections, and auto-immune diseases” and that it had “invested approximately $50 billion in pursuit of that goal” since 2013.

A Bloomberg Law analysis of AbbVie’s public disclosures in its Securities and Exchange Commission filings shows the company spent about $24.8 billion on research and development from 2013 to 2018.

How much companies spend on research and development is at the center of the drug pricing debate. Companies say they need to set their prices high enough to cover their research and development costs.

Wyden’s office said it’s skeptical about Gonzalez’s comments regarding AbbVie’s R&D spending.


Jennifer Taubert, who represented Johnson & Johnson’s pharmaceutical branch, Janssen, said biosimilars—near copies of biologic medicines—have the potential to increase competition and bring down costs.

That’s why “Janssen has long supported a patient-focused, science-based regulatory framework for biosimilars,” she said

But Pfizer has some issues with how Janssen has talked about biosimilars in the past. In August 2018, Pfizer sent a petition to the FDA asking for clarification on biosimilars’ safety and properties.

Pfizer specifically cited Jannsen’s promotional material for its drug Remicade, saying Janssen mischaracterized concepts surrounding biosimilars.

Pfizer alleged generally to the FDA that certain companies had “mischaracterized the concepts of interchangeability and switching to sow doubt and confusion about biosimilars” in their marketing material.

European Pricing

Finally, several of the company leaders noted they charge more in the U.S. to make up for lower prices in Europe, even though independent research suggests otherwise.

Pfizer’s CEO Albert Bourla said European countries are “free riding” off of American innovation with price controls that result in lower prices overseas than in the U.S.

The logic is that someone must pay for innovation, and if Americans paid what Europeans paid, there wouldn’t be enough profits to invest in research and development.

AbbVie’s Gonzalez said if drug prices in the U.S. were to match the lower end of the European pricing model, “then I can tell you AbbVie would not be able to invest the level of R&D as it does today.”

Leigh Purvis, director of health services research at AARP, pushed back against the argument.

He cited research from a Health Affairs article that “found that the premiums pharmaceutical companies earn from charging substantially higher prices for their medications in the U.S. compared to other Western countries generates substantially more than the companies spend globally on their research and development.”

Any potentially misleading statements you think we missed? Let me know:

—With assistance from Alex Ruoff

To contact the reporter on this story: Jacquie Lee in Washington at

To contact the editors responsible for this story: Fawn Johnson at; Randy Kubetin at