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(NEW YORK) — A sunbathed Dalmatian tiptoes across a windowsill, a Chinese New Year parade engulfs a city street, an archeologist digs up a chair from desert sand.

Videos posted online display these events, but none of them happened. They make up the first publicly available work created by OpenAI’s newly unveiled video-generation tool Sora.

Sora composes videos, lasting up to one-minute long, based on user prompts, just as ChatGPT responds to input with written responses and Dall-E offers up images.

The video-generator is currently in use by a group of product testers but is not available to the public, OpenAI said in a statement on Thursday.

These products carry the potential to improve and ease video storytelling, but they could also supercharge internet misinformation and enhance government propaganda, blurring the already-faint line between real and fake content online, experts told ABC News.

AI-generated videos, meanwhile, threaten to reinforce hateful or biased perspectives picked up from the underlying training materials that make their creation possible, they added.

“The clarity of truth we thought we had with recorded photography and video is gone,” Kristian Hammond, a professor of computer science at Northwestern University who studies AI, told ABC News. “We’ve inadvertently built a world of propaganda engines.”

In response to ABC News’ request for comment, OpenAI pointed to a webpage that outlines measures taken by the company to prevent abuse of Sora.

“We’ll be taking several important safety steps ahead of making Sora available in OpenAI’s products,” the company website says. “We are working with red teamers  —  domain experts in areas like misinformation, hateful content, and bias  — who will be adversarially testing the model.”

The company plans to use some safety features already in palace for its image generator Dall-E, the website says, including a tool that polices text prompts to ensure they do not violate rules against “extreme violence, sexual content, hateful imagery, celebrity likeness, or the IP of others.”

Experts who spoke to ABC News emphasized the difficulty of evaluating a demo product that has yet to be released to the general public. They sounded alarm, however, over the opportunities for misuse of the video generator and the challenges of implementing fully effective safeguards.

“Realistic images of events play into people’s assumptions about what’s going on in the real world and can be used to deceive people,” Sam Gregory, executive director of Witness, an advocacy group that aims to ensure the use of video to protect human rights, told ABC News.

The risks posed by AI-generated content have stoked wide concern in recent weeks.

Fake, sexually explicit AI-generated images of pop star Taylor Swift went viral on social media in late January, garnering millions of views. A fake robocall impersonating President Joe Biden’s voice discouraged individuals from voting in the New Hampshire primary last month.

Experts commended the steps taken by OpenAI to prohibit abuses of Sora along these lines. They warned though of the product’s likely capability to create deep fakes and the difficulty of preventing such videos.

“They can probably put in a filter that says, ‘Don’t generate any videos with Taylor Swift,’ but people will find ways around it,” Gary Marcus, an emeritus professor at New York University and author of the book ”Rebooting AI,” told ABC News.

Sora, like other generative AI products, is trained on troves of online data, leaving it susceptible to widely reproduced biases, such as racial and gender stereotypes.

“There are biases in society and those biases will be reflected in these systems,” Hammond said.

In addition to moderating video prompts and the resulting content, OpenAI plans to implement a “detection classifier” that can identify when a video has been produced by Sora, the online statement said. The company said it will also include a popular recognized digital tag, which essentially amounts to a digital watermark.

Such precautions drew applause from experts, though they warned that videos could potentially be reproduced or altered as means of removing the labels.

“People will be trying to get around the guardrails put in place,” Hammond said. “It’s an arms race.”

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(NEW YORK) — The number of striking workers in the U.S. more than doubled last year due to massive work stoppages carried out by autoworkers, nurses and Hollywood writers and actors, according to a study released by Cornell University on Thursday.

The total number of striking workers climbed 141% in 2023, amounting to nearly 540,000 workers who walked off the job, the report found.

“This rise in strike action after many years of diminished activity indicates a union resurgence that is shifting the balance of power back toward labor,” Alexander Colvin, dean of Cornell University’s School of Industrial and Labor Relations, told ABC News in a statement.

Four large strikes accounted for more than half of the workers involved in work stoppages last year, the report said, pointing to multi-state campaigns among actors, autoworkers, healthcare employees, as well as an action carried out by school staff in Los Angeles.

SAG-AFTRA, a union representing roughly 160,000 actors, went out on strike for nearly 120 days, culminating in a 3-year contract that raised wages by roughly 14%.

The United Auto Workers, a union representing 150,000 employees at major car markers, ended a weekslong strike after a set of agreements that delivered a roughly 25% raise over a 4-year period.

Roughly 75,000 healthcare workers at Kaiser Permanente won major wage gains after a work stoppage, as did thousands of TV writers.

The total number of work stoppages ticked up by 9% in 2023 compared to the previous year, due to the sizable share of workers who participated in large strikes, the report said.

The sharp escalation in worker protests arose from widespread dissatisfaction with sluggish wage gains, which in many cases had failed to keep up with rapid price hikes, experts previously told ABC News.

Over a four-decade period beginning in the late-1970s, wages largely flattened, increasing 0.2% per year on an inflation-adjusted basis for a typical worker, a Harvard Business Review analysis found.

The cumulative effects of sluggish wage growth collided with sky-high inflation in recent years, leaving workers frustrated over diminished spending power, Johnnie Kallas, project director of Cornell University’s Labor Action Tracker, previously told ABC News.

Despite the surge in work stoppages last year, union membership stagnated. In 2023, the unionization rate among private sector employees stood at 6%, little changed from the previous year, according to data released by the Bureau of Labor Statistics in January.

The private sector unionization rate has generally trended down over four decades since the U.S. began collecting data, in 1983, when the rate stood at about 17%, the BLS said.

Still, last year brought a surge in strikes in the private sector, in contrast with the burst of labor militancy five years ago mostly among public school teachers, Johnnie Kallas, an assistant professor at the University of Illinois, who founded Cornell University’s Labor Action Tracker, told ABC News in a statement.

“Large strikes were much more dispersed this past year throughout numerous private sector industries,” Kallas said.

 

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(NEW YORK) — The City of New York on Wednesday sued the companies behind SnapChat, Instagram, YouTube and TikTok, accusing them of fomenting a “nationwide youth mental health crisis” by exposing children “to a nonstop stream of harmful content.”

The lawsuit, filed in California Superior Court, alleged the companies intentionally designed their platforms to purposefully manipulate and addict children and teens to social media applications. The lawsuit pointed to the use of algorithms to generate feeds that keep users on the platforms longer and encourage compulsive use.

“Youth are now addicted to Defendants’ platforms in droves, resulting in substantial interference with school district operations and imposing a large burden on cities, school districts and public hospital systems that provide mental health services to youth,” the lawsuit said. “While presented as ‘social,’ Defendants’ platforms have in a myriad of ways promoted disconnection, disassociation, and a legion of resulting mental and physical harms.”

The lawsuit accused the social media companies of manipulating users by making them feel compelled to respond to one positive action with another positive action.

SnapChat addressed the lawsuit via a statement, denying the allegations.

“Snapchat was intentionally designed to be different from traditional social media, with a focus on helping Snapchatters communicate with their close friends. Snapchat opens directly to a camera – rather than a feed of content that encourages passive scrolling – and has no traditional public likes or comments. While we will always have more work to do, we feel good about the role Snapchat plays in helping close friends feel connected, happy and prepared as they face the many challenges of adolescence,” the statement, provided by Ashley Adams, a spokeswoman for Snap Inc., said.

TikTok also responded to the city’s lawsuit.

“TikTok has industry-leading safeguards to support teens’ well-being, including age-restricted features, parental controls, an automatic 60-minute time limit for users under 18, and more. We regularly partner with experts to understand emerging best practices, and will continue to work to keep our community safe by tackling industry-wide challenges,” a TikTok spokesperson said.

Meta, which owns Instagram, stated the safety of teens is a top priority.

“We want teens to have safe, age-appropriate experiences online, and we have over 30 tools and features to support them and their parents. We’ve spent a decade working on these issues and hiring people who have dedicated their careers to keeping young people safe and supported online,” a company spokesperson said.

“Providing young people with a safer, healthier experience online has always been core to our work. In collaboration with youth, mental health and parenting experts, we’ve built services and policies to give young people age-appropriate experiences, and parents robust controls. The allegations in this complaint are simply not true,” said José Castañeda, a Google spokesperson.

“These platforms take advantage of reciprocity by, for example, automatically telling the sender when their message was seen or sending notifications when a message was delivered, encouraging teens to return to the platform again and again, and perpetuating online engagement and immediate responses,” the lawsuit said.

“Over the past decade, we have seen just how addictive and overwhelming the online world can be, exposing our children to a non-stop stream of harmful content and fueling our national youth mental health crisis,” New York City Mayor Eric Adams said. “Our city is built on innovation and technology, but many social media platforms end up endangering our children’s mental health, promoting addiction and encouraging unsafe behavior.”

“Over the past decade, we have seen just how addictive and overwhelming the online world can be, exposing our children to a non-stop stream of harmful content and fueling our national youth mental health crisis,” New York City Mayor Eric Adams said. “Our city is built on innovation and technology, but many social media platforms end up endangering our children’s mental health, promoting addiction and encouraging unsafe behavior.”

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(NEW YORK) — While snow and frigid temps are sweeping parts of the country, travel deals for spring break are heating up.

Experts like Going.com founder Scott Keyes explained to ABC News’ Good Morning America why now may be the best time to book flights for spring travel.

Spring break travel tips: Book flights before March

“I would not be putting it off much longer if you’re hoping to fly somewhere, because chances are once March rolls around, spring break flights are going to get more expensive, not less,” he cautioned. “Right now we are in the Goldilocks window for cheap spring break flights.”

The so-called “Goldilocks window”, Keyes said, is the ideal time to book your flight — it’s not too early or too late for the price to be just right.

“If you book 11 months in advance, you don’t see many cheap flights, but also, if you wait until a week or two before, your likelihood of a cheap flight at that point is gonna be very low,” he explained.

Spring break travel tips: Find the cheapest destination

When it comes to booking trips for the family, Keyes said to be flexible with your destination.

For example, if a beach getaway is at the top of your vacation list, look for the one with cheapest airfare, and for bigger families, Keyes suggests booking the tickets individually.

“When you do one booking of four tickets, all four tickets have to have the same price, and if there’s only 3 tickets left at the cheapest price they’re gonna sell you the next most expensive one,” he said. “Instead, book three tickets at once at the cheapest price — then book the fourth ticket.”

Spring break travel tips: Round trip vs. one-way flights

Keyes also advises travelers looking to book for spring break to compare round-trip and one-way fares.

“The cheapest non-stop flight from New York to San Diego for a week in late April is $448 per person round trip. But if you book each leg separately, you can fly one-way to San Diego for $139 and back to New York for $254 — totaling $393. That’s a savings of $55 per person,” he said.

Expert’s top travel tip for booking flights: Follow the 21-day rule

Keyes reminded travelers to follow his golden rule of air travel, back-timing when to book based on your departure date, in order to align with an airline’s “advanced purchase requirement” found in the fine print of the fare terms and conditions.

“Pull up a calendar and circle 21 days before your travel date,” he said. “That needs to be your sort of drop-dead date to get your flights booked by.”

Other deals and thinking ahead to summer travel

It’s also a great time to book a cruise, now that we’re in what’s known as the wave season — the first three months of the year when cruise lines often offer a wide range of discounts.

AAA shows discounts between 30% to 60% off, and travelers will likely see cabin upgrades, as well as buy one, get one offers and possible onboard credits.

While most searchers are in spring break mode, experts also say now is a good time to start thinking about summer travel.

If you’re looking for domestic vacations, plan to try to book them one to three months out from the travel dates, while we are still in the opposite season.

Finally, remember to turn on flight alerts via Google flights or a price tracker app.

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(NEW YORK) — Dole Fresh Vegetables, Inc. has announced a voluntary recall of a “limited number” of Dole-branded and private label salad kits due to potential cross contamination with cheeses recalled for possible listeria contamination.

A company recall notice posted on the U.S. Food and Drug Administration website and Dole’s company website states that the salad kits were recalled because they were processed on the same line as a cheese product from Rizo-Lopez Foods, which had previously been recalled for the “possible presence of Listeria monocytogenes.”

“This recall notification is being issued due to the potential for cross-contamination of cheese contained in certain masterpacks by cheese potentially contaminated with Listeria monocytogenes from our packaged cheese supplier,” the Monterey, California-based company wrote in its recall announcement. “At this time, we are unaware of any specific illnesses associated with our products, or by other purchasers of their recalled cheese.”

The recalled salad kits were sold in 25 states as well as the Canadian provinces of Alberta, British Columbia, New Brunswick, Ontario, and Quebec.

Eight salad kit products are affected by the recall, including the Dole Chopped Kit Avocado Ranch, Premium Kit Southwest Salad, Cajun Ranch Chopped Kit, Premium Kit Endless Summer and Chopped Salad Kit Bacon Ranch Crunch, among others.

The products have “Best if used by” dates between Feb. 3 and 21. Click here for specific “use by” dates, lot codes, UPC numbers and specific product names and details, as well as photos of the recalled items.

Dole has advised customers in possession of any recalled products to dispose of them immediately.

“Dole retailers have been advised to check store shelves and warehouse inventories to confirm that no recalled product is available for purchase by consumers,” the company added, stating that it is “coordinating closely with regulatory officials” on the matter.

Dole Fresh Vegetables did not immediately respond to ABC News’ request for comment.

Customers and retailers with questions about the recall may contact the Dole Consumer Response Center at 800-356-3111, Monday through Friday from 8 a.m. to 3 p.m. Pacific Time.

Dole’s announcement stems from an earlier recall issued by Rizo-López Foods, which voluntary recalled all cheeses and other dairy products made in its Modesto facility “because they have the potential to be contaminated with Listeria monocytogenes,” the company said in a press release on Feb. 5.

The company said in the release that the recall was being carried out with the knowledge of the U.S. Food and Drug Administration, which shared the company announcement on its website the following day.

The Centers for Disease Control and Prevention also issued a food safety alert for recalled cheeses, yogurts and sour creams potentially linked to a multistate outbreak of listeria that has sickened 26, hospitalized 23 and left two people dead.

In a statement provided to ABC News, Edwin Rizo, CEO and owner of Rizo Lopez Foods, Inc., said this was the first time “any product that we manufacture has been linked to a foodborne illness.”

“As soon as we were aware of this, we made the immediate decision to stop production and voluntarily recall all our products manufactured in our facility. We are working hard and diligently to find the root cause of the problem and take corrective actions to prevent it from happening again. The health and well-being of our customers is our top priority,” the statement read.

According to the CDC, listeria can cause severe illness “when the bacteria spread beyond the gut to other parts of the body” after a person consumes contaminated food. Those at higher risk include pregnant people, those aged 65 or older, or anyone who has a weakened immune system, the CDC says.

In 2021, Dole recalled all Dole-branded and private label packaged salads processed at its facilities in Bessemer City, North Carolina and Yuma, Arizona after the FDA said a random analysis of packages of a Dole-branded garden salad from the two facilities found samples of a strain of Listeria monocytogenes.

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(NEW YORK) — William “Bill” Post, the man often credited with inventing the beloved Pop Tart, has died at 96.

Born on June 27, 1927 in Grand Rapids, Michigan, Post was one of seven children born to Dutch immigrants and, at the age of 16, Post began working part-time washing trucks at Hekman Biscuit Company, according to his obituary.

After serving in the Army Air Corps in occupied Japan during World War II, Post would eventually return to Hekman at the age of 21 to work full as the personnel manager while also assisting with sales and production, along with many of the other elements of the business.

“Fast forward 20 years, and Bill as the plant manager of Hekman (later known as the Keebler Company) welcomed some executives from Kellogg’s who asked if he thought it would be possible for Keebler to create a new product they had in mind,” according to his obituary.

“It is at this juncture that Bill is often credited for having ‘invented’ the Pop Tart,” Post’s obituary states. “To be accurate, however, Bill would say, ‘I assembled an amazing team that developed Kellogg’s concept of a shelf-stable toaster pastry into a fine product that we could bring to market in the span of just four months.’”

Pop Tarts made their debut to the public in 1964 with the four original flavors of strawberry, blueberry, brown sugar cinnamon and apple-currant. Now, 60 years later, there are between 20 to 30 flavors on the market at any given time with new flavors constantly being in development and tested for an ever-changing market.

In the latter part of his life, Post would move his family to Elmhurst Illinois, to begin working at the corporate offices of the Keebler Company before leaving the company at age 56 and retiring to Glen Arbor, Michigan.

His retirement didn’t last long, however, and he accepted Kellogg’s request to be their consultant, a role he would hold for the next 20 years, which included “worldwide travel and the forging of international friendships. In 2003, Bill and Florence came full circle, moving back to Grand Rapids to be near their family,” according to his obituary.

“Bill’s immediate family also wishes to express their gratitude and thanks to his nieces and nephews who paid so much attention to him,” the obituary said.

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(NEW YORK) — Consumer prices rose 3.1% in January compared to a year ago, slowing markedly from the previous month but missing expectations of an even larger cooldown, a report from the Bureau of Labor Statistics released on Tuesday showed.

Still, the falling inflation offered welcome news for the Federal Reserve as it weighs interest rate cuts.

Core inflation — a closely watched measure that strips out volatile food and energy prices — increased 3.9% over the year ending in January, matching the cooldown from the prior month.

The report from the U.S. Bureau of Labor Statistics follows a slight acceleration of price increases in December.

That jump in inflation had complicated the Federal Reserve’s plans to deescalate its inflation fight with a series of interest rate cuts this year.

Fewer than two weeks ago, the central bank decided to leave interest rates unchanged, opting to observe further economic performance before reversing a near-historic series of rate increases that began last year.

The slowdown of inflation in January amounts to a positive sign for the Fed ahead of its next rate decision in March.

Inflation has fallen dramatically from a peak last year, but it remains nearly a percentage point above the Fed’s target.

The U.S. economy has largely defied the central bank’s efforts to slow the economy by raising borrowing costs for households and businesses.

The economy far exceeded expectations by adding 353,000 jobs last month while holding the unemployment rate steady at 3.7%, a historically low figure, according to data released by the U.S. Bureau of Labor Statistics earlier this month.

Gross domestic product performed much better than expected at the end of last year, a report this month showed, while consumer sentiment soared in January.

The blockbuster performance, however, could pose a challenge for the inflation fight taken up by policymakers at the Federal Reserve.

The Fed risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand could lead to an acceleration of price increases.

Speaking in Washington, D.C., late last month, Fed Chair Jerome Powell celebrated the steady decline of inflation over recent months and welcomed the robust hiring occurring alongside it. However, he cautioned about the risks posed by an economy that runs too hot.

“We’re not looking for a weaker labor market,” Powell said. “We’re looking for inflation to continue to come down, as it has been coming down for the last six months.”

“We’re not declaring victory at this point,” he later added. “We think we have a ways to go.”

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(NEW YORK) — Super Bowl viewers could hardly miss an ad blitz from e-commerce company Temu promising low prices that allow customers to “shop like a billionaire.”

The company’s app vaulted to second place among the most downloaded free apps on Apple devices, Apple rankings showed Monday.

The platform sells competitively priced versions of everything from sneakers to jewelry to drones. However, Temu has faced concerns of customer dissatisfaction, data risks and lax oversight over the potential use of forced labor in its supply chain.

Temu did not immediately respond to ABC News’ request for comment.

On its website, the company says it “cares deeply” about data privacy. “Temu does not ‘sell’ personal information in the traditional sense,” the company adds, acknowledging that it does share some data with third parties to improve service.

In a statement to Time in 2022 about its operations, the company said its low prices are made possible by a “deep network of merchants, logistic partners and [Pinduoduo’s] established ecosystem built over the years.”

Temu is a United States-based offshoot of Chinese e-commerce giant Pinduoduo, which boasts one of that country’s most popular apps, selling a wide range of products to more than 750 million users each month, according to a 2022 earnings report.

Launched in 2022, Temu mimics the business model of its sister company, offering just about everything at discounted prices. Even more, customers earn store credit for promoting the company on social media or playing games hosted on its website.

A four-pack of “Oprah-style reading glasses” costs $13.97; a men’s collared shirt bearing the American flag runs $8.90; and a pair of hook earrings costs $3.14, according to the company’s website.

Since many of Temu’s suppliers operate overseas, the company offers standard shipping times of up to 23 days, Temu says on its website. Express shipping, which costs an extra $12.90, promises delivery within 12 days.

Since local carriers may handle a portion of the delivery process, customer tracking may not be available for every step of the shipping period, Temu says.

The Better Business Bureau slapped Temu with a C+ rating, noting 1,625 customer complaints closed in the past 12 months.

Since Temu is privately owned, the company does not regularly disclose details about performance, such as its scale and revenue.

The company ships tens of millions of packages to the U.S. each year from roughly 80,000 sellers who list products on its website, according to a report in June 2023 from the U.S. House Select Committee on the Chinese Communist Party.

The House report also raised concerns about the potential use of forced labor in the company’s supply chain.

Temu’s delivery network includes more than 80,000 suppliers, the report found. The company told House investigators it does not explicitly prohibit sellers on the platform from using suppliers based on their origin in the Xinjiang Autonomous Region, an area known for the exploitation of Muslim-minority Uyghurs in forced labor.

“American consumers should know that there is an extremely high risk that Temu’s supply chains are contaminated with forced labor,” the report said.

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(NEW YORK) — Honda and Acura recalled a combined 750,000 cars this week over an airbag defect, becoming the latest in a series of recalls this year that has touched carmakers from Tesla to Ford.

The near-daily headlines warning of a recall amount to more than an eye-catching coincidence.

Car recalls have surged in recent years, owing largely to the increased complexity of vehicles replete with electronic components that increase the likelihood of a malfunction, according to an ABC News analysis of government data and interviews with experts.

The average number of car recalls each year jumped 46% over a 10-year period ending in 2022, when compared with the average over the preceding 10 years, National Highway Traffic Safety Administration data shows.

Over the five years ending in 2022, the U.S. averaged more than 1,000 car recalls each year, or about 27 per day, the data shows. Until 2016, the U.S. had not exceeded 1,000 car recalls in any year going back to at least 2002.

“More complicated vehicles definitely result in more issues,” Ivan Drury, an auto analyst at data firm Edmunds, told ABC News.

“Vehicles have advanced to a degree we’ve never seen before,” Drury added, citing high-tech features such as self-driving capability and back-up cameras. “It’s such a wide swathe of issues that recalls cover that you’re going to see this more and more.”

In December, for instance, Toyota recalled 1.12 million vehicles worldwide because a sensor malfunction could cause the airbag to deploy incorrectly.

The same month, Tesla recalled about 2 million cars over a safety issue tied to its autopilot system. The company announced an additional recall last week of 2.2 million vehicles over the font size on its warning lights.

“Let’s just think about 20 years ago, we were just getting into airbags becoming standard,” Brian Moody, executive editor at Autotrader, told ABC News. “A lot of these complex pieces of equipment and technology today have to work together to get a better experience for the consumer.”

Tom McParland, operator of the vehicle-buying service Automatch Consulting, echoed the view.

“As you add more components to vehicles, as vehicles get more tech heavy, you’re going to have more failure points,” McParland said.

The spike in car recalls should not necessarily worry consumers, since defects range widely in severity. The uptick in recall announcements, they added, illustrates a regulatory system essentially working as intended.

“A lot of these recalls don’t fall under a stop-sale order or tell you to stop driving your car,” Drury said. “The stuff that’s more minor might not catch your attention but you do want to get it fixed.”

Repairs undertaken in response to a recall are free of charge to the car owner, the experts said. When purchasing a used car, prospective buyers can check online whether the car received repairs in response to a possible recall.

Due to the complexity and speed of auto production nowadays, recalls offer a necessary opportunity for fixes to problems that go undiscovered before a car hits the road, Moody said.

“In the end, it’s good for consumers that we have a recall system,” he added.

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(WASHINGTON) — Senators grilled chief executives from three top pharmaceutical companies over prescription drug prices during an hourslong committee hearing Thursday on Capitol Hill.

Members of both major political parties bemoaned drug prices they consider too high, but liberals and conservatives revealed differences in their views of the role played by the pharmaceutical companies.

The three CEOs — Robert M. Davis of Merck, Joaquin Duato of Johnson & Johnson and Christopher Boerner of Bristol Myers Squibb — said drug prices account for the considerable cost of research and development, as well as the ready availability of treatments in the United States.

Here are the four biggest takeaways from the CEOs’ testimony before the Senate Committee on Health, Education, Labor and Pensions:

Liberals confronted the pharmaceutical CEOs over prices, executive compensation

The testiest moments of the hearing came when liberal lawmakers challenged the pharmaceutical executives over what the senators said they viewed as high prices, invoking anecdotes of patients forced to choose between purchasing medicine or paying for essentials such as rent or food.

The senators pointed to millions of dollars in executive compensation and billions in stock buybacks and dividends as areas where the companies could trim costs and put the savings toward price reduction.

In one heated exchange, Democratic Sen. Chris Murphy from Connecticut challenged Duato, accusing Johnson & Johnson of prioritizing shareholder returns over drug development.

In 2022, Murphy said, the company spent a combined $17 billion on stock buybacks and dividends compared to $14 billion on research and development.

“Can you understand that one of my constituents in Connecticut would look at those numbers and think that you care more about padding the pockets of folks who work for you and invest in you than in research and development?” Murphy said.

In response, Duato said, “Our priority is investing in R&D.”

“We have to pay dividends because it’s the only way the company can remain operational and sustainable,” Duato added. “Otherwise, if we’re not operational and sustainable, we are not able to fulfill our mission of developing medicines for patients and making them affordable.”

Senators grilled the CEOs on why the same drugs cost more in the U.S. than in other countries

Liberal lawmakers repeatedly criticized the relatively high cost of drugs in the U.S. compared to other wealthy countries such as Canada, France and Japan.

In 2022, prices for brand-name drugs in the U.S. were at least three times higher than those in 33 other wealthy nations, according to a report this month commissioned by the Department of Health and Human Services.

For instance, Bristol Myers Squibb charges patients $7,100 per year for blood-clot drug Eliquis in the U.S., while the same product can be purchased for $900 in Canada and just $650 in France, Vermont Sen. Bernie Sanders, an independent, said.

“Does Bristol Myers Squibb make a profit selling Eliquis for $900 in Canada,” Sanders asked Boerner, the company’s CEO.

“Yes, we make a profit,” Boerner said.

“Will you commit to reducing the list price in the U.S. to the price in Canada?” Sanders asked.

In response, Boerner said, “We cannot make that commitment.” He cited the relative accessibility of drugs in the U.S. compared to Canada.

“In Canada, medicines are generally made less available and it takes oftentimes considerably longer for them to be made available,” Boerner added.

Republicans shared the concern about prices but defended drugmakers

Republican senators on the committee echoed the concern about high drug prices but largely avoided faulting the pharmaceutical companies and their executives.

“Let’s just be clear, everybody in this panel cares about the high cost of prescription drugs and wants to work on real solutions to address this,” Republican Sen. Bill Cassidy of Louisiana said. “I don’t want the committee to delve into a CEO whack-a-mole that ends up with no serious legislation as a result.”

Kentucky Sen. Rand Paul, a Republican, defended the profits delivered by pharmaceutical companies in recent years, lauding their breakthrough drugs and philanthropy. Paul criticized, meanwhile, the line of questioning taken up by Democrats, who make up the majority on the committee.

“Unfortunately, this committee isn’t here to celebrate American success, instead the majority wants to drag us here to conduct a show trial to harangue companies,” Paul said.

Pharmaceutical CEOs pointed to high research and development costs, middlemen

For their part, the chief executives acknowledged the elevated price of drugs in the U.S.

However, the CEOs placed the blame on cost-intensive research and development, as well as industry middlemen known as Pharmacy Benefit Managers, or PBMs.

“Right now, we have nearly 20,000 researchers seeking breakthrough treatments,” said Davis, of Merck. The company has invested almost $160 billion in research and development since 2010, including $30 billion in 2023, Davis said.

All three CEOs aimed their ire at PBMs, third-party administrators hired by large employers and other institutions to set prices in negotiations with drugmakers.

PBMs undermine pharmaceutical companies’ efforts to ease the costs borne by patients, said Duato, of Johnson & Johnson.

“Congress should stop middlemen from taking for themselves the assistance that pharmaceutical companies intend for patients,” Duato said.

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