Rep. Tom Kean Jr. (R-NJ) is financially benefiting from the high cost of cancer drugs.

Last year, the New Jersey congressman co-sponsored a provision of the One Big Beautiful Bill Act (OBBB) that allowed pharmaceutical companies to keep charging Medicare recipients inflated prices for certain medications, including pills to treat melanoma and lung cancer.

This was a boon for Johnson & Johnson and Merck, two companies that Kean owns up to a combined $665,000 worth of stock in.

The 2022 Inflation Reduction Act empowered Medicare to negotiate with pharmaceutical companies to lower the costs of certain drugs. This means some Medicare recipients pay less at the pharmacy and the federal government spends less picking up its portion of the tab.

Drugs become eligible for Medicare price negotiations based on how long it has been since they received FDA approval. Standard medications become eligible after seven years, while biologic drugs made from living cells become eligible after 11 years. Under the original law, certain so-called orphan drugs that treat conditions affecting 200,000 people or fewer in the U.S. were exempt from negotiations.

Kean’s provision extended some of these timelines. If a medication was initially classified as an orphan drug but later approved for wider use, the eligible negotiation date is now pegged to that later approval date.

This allowed Merck to delay negotiations on Keytruda, an immunotherapy medication used to treat more than 20 different cancer types. The drug accounts for billions of dollars in annual Medicare spending.

Johnson & Johnson was able to delay negotiations on Darzalex, an antibody that treats myeloma and other plasma cell disorders. Medicare currently spends about $5.6 billion covering the drug every year.

Both Johnson & Johnson and Merck lobbied congress in support of Kean’s provision, as did a trade group representing the pharmaceutical industry.

Johnson & Johnson executives said they were “pleased” with OBBB on the first earnings call after President Donald Trump signed it into law. The company’s stock value then surged over the following weeks.

Kean has also accepted campaign donations from the pharmaceutical industry.

Kean is seeking a third term in the House this year. His Democratic opponent is veteran Rebecca Bennett.

Reprinted with permisson from American Journal News