On the Greed of the Pharmaceutical Industry

Following the news that the CEO of Moderna will accept an invitation to testify in front of the Senate Health, Education, Labor and Pensions Committee next month, Chairman Bernie Sanders (I-Vt.) gave these remarks on the floor of the U.S. Senate about the growth of greed in the pharmaceutical industry and what Congress can do to end it. 

There is a lot of discussion about how “divided” our nation is and, on many issues, that is absolutely true.

But on one of the most important matters facing our country the American people – Democrats, Republicans, Independents, Progressives, and Conservatives – could not be more united.

And that is the need to take on the unprecedented corporate greed of the pharmaceutical industry and to substantially lower the outrageously high price of prescription drugs.

Today, millions of Americans are making the unacceptable choice between feeding their families or buying the medicine they need. Seniors from Vermont to Alaska are forced to split their pills in half and many have died because they did not have enough money to fill their prescriptions.

No one knows for sure precisely how many people die because they cannot afford to buy their prescription drugs.

But a 2020 study by West Health found that by the year 2030, over 100,000 Medicare recipients could die prematurely each and every year because they cannot afford to buy their life-saving medicine.

All over this country, the American people are asking the following questions:

How does it happen that people in the United States pay, by far, the highest prices in the world for prescription drugs?

Why is it that nearly one out of every four Americans cannot afford their prescription medication?

How does it happen that nearly half of all new drugs in the United States cost more than $150,000 a year?

A few years ago, I took a busload of people with diabetes from Detroit, Michigan, to a drugstore in Windsor, Ontario. And there, in Canada, they were able to purchase the same insulin products they bought in the United States for one-tenth the price.

In 1999, 24 years ago, I took another busload of people – this time women with breast cancer — from St. Albans, Vermont to a doctor’s office and a pharmacy in Montreal, Canada. And, there again, with tears in their eyes, they were able to purchase tamoxifen for one-tenth of the price charged in the United States.

How is it that in Canada and other major countries the same medications manufactured by the same companies, sold in the same bottles are available for a fraction of the price that we pay in the United States?

Well, the answers to all of these questions are not complicated. In fact, they can be summed up in just three words: Unacceptable corporate greed.

Over the past 25 years, the pharmaceutical industry has spent $8.5 billion on lobbying and over $745 million on campaign contributions to get Congress to do its bidding.

Incredibly, last year, drug companies hired over 1,700 lobbyists including the former congressional leaders of both major political parties – over 3 pharmaceutical industry lobbyists for every Member of Congress.

Meanwhile, as Americans die because they cannot afford the medications they need, the pharmaceutical industry makes much higher profit margins than other major industries. Between the years 2000-2018, drug companies in this country made $8.6 trillion dollars in profits.

In fact, in 2021, just ten pharmaceutical companies in the United States – AbbVie, Pfizer, Johnson & Johnson, Eli Lilly, Merck, Moderna, Bristol-Myers Squibb, Amgen, Gilead Sciences, and Regeneron Pharmaceuticals – made a total of more than $102 billion in profits up 137 percent from the previous year.

But it’s not just industry profits. It is the exorbitant compensation packages that the pharmaceutical industry has given to its CEOs and other executives within the industry.

According to a report done by the HELP Committee staff released today in 2021, while hundreds of thousands of Americans died from COVID, 50 pharmaceutical executives in just 10 companies made $1.9 billion in total compensation.

These same 50 executives are in line to receive up to $2.8 billion in golden parachutes once they leave their companies.

For example, AbbVie CEO Richard Gonzalez’s made nearly $62 million in total compensation – in one year.

The CEO of Eli Lilly, David Ricks, made more than $67 million – in one year.

Incredibly, the CEO of Regeneron Pharmaceuticals, Leonard Schleifer, made nearly $453 million in total compensation – in one year.

Meanwhile, while we are told over and over again that the reason we have outrageously high drug prices in America is because of the need to invest in research and development, it turns out that, over the past decade, 14 major pharmaceutical companies spent $747 billion not to research and develop life-saving drugs, but to make their wealthy shareholders even wealthier by buying back their own stock and handing out huge dividends. It turns out that the drug companies spent $87 billion more on stock buybacks and dividends than what they spent on research and development. Let me repeat that. Drug companies spent $87 billion more on stock buybacks and dividends than on research and development.

The truth is we are dealing here today not just with an economic issue in terms of the high cost of prescription drugs. We are dealing with a profound moral issue and that is: Is it morally acceptable that tens of thousands of people die each year because they cannot afford the medicine their doctors prescribe – while the industry makes billions in profits and provides their CEOs with outrageous compensation packages?

Is it morally acceptable that, at a time when, the taxpayers of this country spent tens of billions a year on the research and development of life-saving drugs, that many of these same taxpayers are unable to afford the drugs they helped develop?

Is it morally acceptable that the business model of the pharmaceutical industry today is not to create the life-saving drugs we need for cancer, Alzheimer’s, heart disease, diabetes, and so many other terrible illnesses, but through excessive greed in order to make as much money as they can?

It has not always been that way. There was once a time when the inventors of life-saving drugs were not obsessed with making huge sums of money, but were instead obsessed with ending the terrible illnesses that plagued humanity.

In the 1950s, for example, there was Dr. Jonas Salk, who invented the vaccine for polio. Salk’s work saved millions of lives and prevented millions more from being paralyzed.

It has been estimated that if Dr. Salk had chosen to patent the polio vaccine he would have made billions of dollars. But he did not.

When asked who owns the patent to this vaccine this is what Dr. Salk said: “Well, the people, I would say. There is no patent. Could you patent the sun.”

What Dr. Salk understood was that the purpose of this vaccine he invented was to save lives, not to make himself obscenely rich.

And he, among great scientists, was not alone.

In 1928, Alexander Fleming, a scientist from Scotland, discovered penicillin at St. Mary’s hospital in London. Fleming’s discovery of penicillin changed the medical world and saved millions of lives.

I am sure that Alexander Fleming could also have become a multi-billionaire if he chose to own the exclusive rights to this anti-biotic.

But he did not.

When Fleming was asked about his role, he did not talk about the outrageous fortune he could have made through his discovery. Instead, he said: “I did not invent penicillin. Nature did that. I only discovered it by accident.”

And then, there was the great scientist Frederick Banting from Canada.

In 1921, Dr. Banting along with two other scientists at the University of Toronto invented insulin. An issue we’re hearing a lot about today.

When Dr. Banting was asked why he wouldn’t patent insulin and why he sold the rights to insulin for just $1 he replied: “Insulin does not belong to me. It belongs to the world.”

It has been estimated that Dr. Banting’s invention saved some 300 million lives.

Once again, a great scientist made it clear that his purpose in life was to save humanity and save lives, not to make billions for himself.

Meanwhile, while Dr. Banting sold his patent for $1 so that humanity could benefit from his discovery, I should mention that Eli Lilly, one of our nation’s largest drug companies, has increased the price of insulin by 1,200 percent over the past 27 years to $275 – while it costs just $8 to manufacture. Not quite the spirit of Frederick Banting.

Now let’s fast forward to the COVID pandemic, this horrible period in our history where we have lost over 1 million Americans and tens of millions have suffered varying levels of illness.

Moderna, a drug company in Massachusetts, worked alongside the National Institutes of Health to develop the vaccine that so many of our people have effectively used. It is widely acknowledged that both the company and the NIH were responsible for the creation of this vaccine.

After the company received billions of dollars from the federal government to research, develop and distribute the COVID-vaccine, guess what happened? The CEO of Moderna, Stéphane Bancel, became a billionaire overnight and is now worth $5.7 billion.

Further, the 2 co-founders of Moderna (Noubar Afeyan and Robert Langer) also became billionaires and are now both worth $2 billion each. Moreover, one of the founding investors in Moderna (Tim Springer) is worth $2.5 billion.

None of them were billionaires before the taxpayers of our country funded the COVID-19 vaccine. And are now collectively worth over $11 billion.

Meanwhile, Moderna, as a whole, made over $19 billion in profits during the pandemic.

And how is the CEO of this company thanking the taxpayers of this country who are responsible for making him and his colleagues incredibly rich?

He is thanking them by proposing to quadruple the price of the COVID vaccine to about $130 once the government stockpile of the vaccine runs out.

Let’s be clear: This is a vaccine that costs just $2.85 to manufacture.

On March 22nd, the Senate HELP Committee will be holding a hearing on March 22nd on this subject. Bottom line: Does Moderna think that it is appropriate to quadruple prices for the vaccine after receiving billions of dollars in taxpayer support.

While Moderna may be a poster child for corporate greed, it is not alone.

A number of years ago, the former CEO of Gilead became a billionaire by charging $1,000 for Sovaldi, a hepatitis C drug that was discovered by scientists at the Veterans Administration. This drug costs just $1 to manufacture and could be purchased in India for $4.

The Japanese drugmaker Astellas, which made a billion dollars in profits in 2021, recently raised the price of the prostate cancer drug Xtandi by more than 75% in the United States to nearly $190,000. This is a drug that was invented by federally funded scientists at UCLA and can be purchased in Canada for one-sixth the US price.

It does not have to be this way. The reality is that if Congress had the courage to take on the greed of the pharmaceutical industry, we could cut the price of prescription drugs in America by at least 50%.

How? By preventing the pharmaceutical industry from charging more for prescription drugs in the U.S. than they do in Canada, Britain, Germany, France and Japan – a concept that is not only supported by progressives, but former President Donald Trump.

There is no rational reason why the HIV treatment Biktarvy costs over $45,000 per year in the U.S, but only $7,500 in France.

Or why a weekly dose of the auto-immune medicine Enbrel costs over $1,760 in the U.S, but just $300 in Canada.

Or why a vial of insulin costs $98.70 in the U.S, but just $11 in Germany.

Or why a monthly course of the blood thinner Eliquis costs $440 in the U.S., but just $102 in Spain.

Or why an injection of the breast cancer treatment Herceptin costs nearly $7,000 in the U.S, but less than $1,600 in Switzerland.

Or why a bottle of a hepatitis C drug costs over $30,000 in the U.S, but just $15,000 in Greece.

The American people whether they are Republicans, Democrats or Independents, whether they are conservatives, moderates or progressives, are sick and tired of being ripped off by the pharmaceutical industry.

Now is the time for us to take on the greed and power of that industry and substantially lower prescription drug prices in our country.