House lawmakers put AbbVie pharmaceuticals CEO Richard Gonzalez in the hot seat this week over concerns that the drugmaker behind top-selling medications exploited the U.S. patent system to stave off competition.
The Oversight Committee hearing was Congress’s latest effort to crack down on pharmaceutical industry price-gouging.
“Our investigation has revealed that the justifications the pharmaceutical industry offers for why they need to raise prices simply do not hold water,” New York Democrat and House Oversight Committee Chairwoman Carolyn Maloney said in the May 18 hearing. “Our investigation also uncovered evidence that AbbVie … engaged in anti-competitive practices to extend its monopoly pricing.”
DRUGMAKERS RAISE THE PRICES OF HUNDREDS OF PRESCRIPTION MEDICATIONS SINCE JANUARY
AbbVie, the pharmaceutical giant responsible for the blockbuster drugs Humira for autoimmune conditions and Imbruvica for lymphatic cancer, has been the target of congressional scrutiny since 2019 when Oversight Committee Chairman Elijah Cummings launched an investigation into price-gouging and exploitation of the U.S. patent system by 12 major pharmaceutical companies.
Maloney announced last September that she would subpoena Gonzalez to appear before the committee in person after she and other members deemed the company’s written responses to questioning as part of the investigation “woefully inadequate.”
AbbVie has been accused of shutting out competition for Humira by obtaining 247 patents on the drug to maintain the exclusive market until at least 2034, according to the Initiative for Medicine, Access, and Knowledge, or I-MAK. Humira is the bestselling drug in the United States, and yearly price hikes have helped the company to generate billions in revenue. The immune disorder drug earned the company more than $16 billion in 2020, increasing 8.4% from the year before.
Gonzalez confirmed that the company could lower prices of its drugs abroad without doing so in the U.S. because of other countries’ price-negotiating powers on behalf of their citizens.
“Certainly outside the U.S., there is always pressure on price, and prices do come down somewhat outside the U.S. once a product is launched, and, in the U.S., we do have the ability to be able to raise prices,” Gonzalez said.
The company was also successful in extending patent protections in 2017 for Humira through 2023, blocking competitors from creating cheaper biosimilars or near-copies of biological medicines such as Humira and Imbruvica. In Europe, biosimilars of the drugs have already hit the market, resulting in falling sales for AbbVie. Tahir Amin, the co-founder of I-MAK, charged the company with abusing a permissive patent system in the U.S. “to keep competition at bay.”
“Unfortunately, the U.S. patent system overprovides exclusivity in the sense that companies can easily get more patents and keep filing patents well into a drug’s life,” Amin said. “This is why we have settlement agreements, and by some litigations, 74 patents were thrown at competitors, and they couldn’t litigate through it.”
Democrats have pushed for drug pricing reforms that the GOP has deemed too punitive on the pharmaceutical industry, which members of the party said could result in stifled innovation of new treatments, therapies, and cures. House Speaker Nancy Pelosi spearheaded a drug pricing package first introduced in 2019 that would grant the government negotiating power with pharmaceutical companies. The package known as the Elijah E. Cummings Lower Drug Costs Now Act also includes a provision that would tie the prices that Medicare pays for 250 prescription drugs to those paid by other countries, which have been major sticking points for Republicans.
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H.R. 3, a shorthand for the Democrats’ bill, has been stonewalled by the Senate and slammed by the pharmaceutical lobbying group PhRMA as an impediment to accessing new medicines, “future innovation and American jobs, creating more problems at a time when we can least afford them.”
Pelosi and other House Democrats have sought to include parts of the bill in President Joe Biden’s American Families Plan, a massive infrastructure package focused on bolstering the social safety net. However, the package omitted the H.R. 3 language, marking Democrats’ latest defeat to pursue lower drug costs for patients.
