Democrats on the House Oversight Committee are pounding Big Pharma executives for price gouging, publishing an 18-month investigation of the soaring costs of select prescription medications and grilling high-paid corporate leaders on whether those meds’ spiking prices were all too prevalent in the profit-ravenous drug industry.
The prescription medications targeted by the lawmakers included “Celgene and Bristol Myers Squibb’s Revlimid cancer treatment, which saw its price hiked 23 times since 2005, and Teva’s multiple sclerosis drug Copaxone, which went up in price 27 times since 2007,” reported the independent, nonpartisan Kaiser Health News service. “Those costs have little to do with research and development or industry efforts to help people afford medication, as drug companies often claim, according to the [congressional] probe.”
As KHN also reported:
“In the case of Revlimid, Celgene hiked the price from $215 per pill to $719 per pill when Bristol Myers Squibb gained the rights to it last year. The drug now costs $763 per pill, or $16,023 for a monthly course — more than three times the original cost in 2005. In the case of Copaxone, Teva raised its price from less than $10,000 for a yearly course in 1997 to nearly $70,000. Such price hikes have been predictably profitable. Teva has banked more than $34 billion in net profits in the United States alone, while Revlimid spun off $32 billion from the United States from 2009 to 2018 for Celgene. Medicare alone paid $17.5 billion for Revlimid from 2010 to 2018. According to emails released with the reports, executives raised prices at will to meet quarterly profit goals, unrelated to costs. In one such case in 2014, then-Celgene executive vice president Mark Alles, who later became CEO, ordered up price hikes simply to juice flagging first-quarter numbers.”
Women Democrats on the oversight committee assailed Big Pharma execs, in sometimes tough language or theatrical questioning, for what they asserted was corporate profiteering, including padding their own pay, at the expense of patients (see video, above). As Stat, an online medicine and science news site, reported:
[Rep.] “Katie Porter, a [Californian and] former consumer protection attorney who has made a name for herself by embarrassing CEOs with prosecutorial questions and a white board, lived up to her reputation. She used that white board to display Celgene’s repeated price hikes for Revlimid and demanded that Mark Alles, who served as Celgene’s CEO until Bristol Myers Squibb acquired the company in 2019, on explain whether the drug had improved over the same time period.
“When Alles tried to insist that the drug was approved for new indications, Porter pressed harder. ‘Did the drug start to work faster? Were there fewer side effects? How did you change the formula or production of Revlimid to justify this price increase?’ Porter said. ‘To recap here: The drug didn’t get any better, the cancer patients didn’t get any better, you just got better at making money, you just refined your skills at price gouging.’ ”
“Tlaib took on Teva’s CEO Kåre Schultz, forcing him to describe how the company uses charity programs to boost their sales. When Schultz insisted that the programs weren’t used to make money, she pulled out internal documents showing Teva mapped out return on investments from their charity programs. ‘In my district, Mr. Schultz, we call this a side hustle. Your pharmaceutical company makes these so-called charitable donations, so you look like you give a s— about sick people,’ said Tlaib. ‘But in reality, these are just another scheme by your corporation to make money off of sick people.’”
In a second-day of eyebrow-raising committee hearings, lawmakers from both sides of the aisle drilled Mark Trudeau, CEO of Mallinckrodt Pharmaceuticals, about a “venerable” medication, H.P. Acthar gel, which his firm got by buying the company that owned it before, Questcor, for $5.8 billion in 2014, KHN reported.
Because Acthar was repositioned as an “orphan drug,” a treatment for a rare condition involving infantile spasms, it promised to be a “cash cow” for Mallinckrodt:
“The premium price when Mallinckrodt acquired the drug was $31,626 for a single vial, after Questcor had hiked it from around $100 in 2000, according to the committee investigation. Mallinckrodt continued the trend, hiking the price five times to ultimately reach $39,864.”
Trudeau argued that his firm had “invested $660 million in improving manufacturing of the drug and in seeking evidence that Acthar works for many other uses” than federal regulators now permit, but KHN also reported:
“Rep. Harley Rouda (D-Calif.) pointed out that about 25% of Acthar sales went through Medicare when Mallinckrodt bought Questcor, and that share is over 60% now. Revenue from Medicare rose from under $50 million in 2011 to $725 million in 2018. Overall, the drug accounted for about a third of all the company’s net sales in recent years, Trudeau said.”
Republicans on the committee objected to the assault on Big Pharma and its executives, calling it partisan showboating by Democrats. “These hearings seem designed simply to vilify and publicly shame pharmaceutical company executives,” Rep. James Comer of Kentucky said, according to KHN.
The relentless rise in prescription drug prices has become part of the election battling over the broader topic of health care — a prime issue for voters. As the Washington Post reported of its prominence as an electoral concern:
“Early in [the] presidential debate, President Trump claimed he had drastically lowered the price of insulin, a lifesaving drug taken in some form by more than 7 million Americans with diabetes. ‘Insulin, it’s going to — it was destroying families, destroying people. The cost,’ the president said. ‘I’m getting it for so cheap it’s like water.’ That came as a shock to the Americans who shell out hundreds of dollars a month on insulin, a number of whom posted triple-digit pharmacy bills to social media immediately after the president’s assertion.”
In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, effective, and excellent health care. This has become an ordeal due to soaring cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.
Americans know the truth of their daily experience — their prescription drug costs have risen, relentlessly, causing unacceptable hardship. No one begrudges Big Pharma — or doctors, hospitals, insurers, or others in the health care system — a fair and reasonable return. But the shams and manipulations of U.S. regulators and legal oversight, the price gouging, and the inflicting of harm on patients must stop. We’ve got a lot of work to on a very tough task — reining in Big Pharma and its excesses.