House Democrats slam pharma CEOs for price hikes driven by revenue, executive bonuses

House Democrats on Wednesday pressed the CEOs of major pharmaceutical companies about massive price hikes. Executives from Celgene, Bris...

House Democrats on Wednesday pressed the CEOs of major pharmaceutical companies about massive price hikes.

Executives from Celgene, Bristol Myers Squibb and Teva were put on the defensive under questioning from members of the House Oversight Committee. 

Wednesday’s hearing was centered on initial results from the panel’s 18-month investigation. A committee staff report found that the CEOs raised prices exponentially for no reason other than to boost profits and inflate executives’ bonuses.

The Democratic-led report comes just weeks before Election Day, and follows a flurry of mostly empty last-ditch efforts by President TrumpDonald John TrumpFive takeaways from Trump-Biden debate clash The Memo: Debate or debacle? Democrats rip Trump for not condemning white supremacists, Proud Boys at debate MORE aimed at showing he is taking action on drug pricing.

Trump has made lowering drug prices a key part of his messaging for years, dating back to the 2016 campaign, but while his administration has made a range of proposals on the issue, from the “most-favored nation” program to allowing imports of cheaper drugs from Canada, it has not followed through to have any of its major initiatives go into effect yet.  

For example, internal documents obtained by the committee found Celgene raised the price of the cancer drug Revlimid 22 times. 

The drug, approved to treat the blood cancer multiple myeloma, more than tripled in price since its launch in 2005, driven almost exclusively by the need to meet company revenue targets and shareholder earnings goals. 

In 2005, a monthly supply of Revlimid was priced at $4,515. Today, the same monthly supply is priced at $16,023, a cost of $719 per pill.

Democratic lawmakers directed their ire toward Mark Alles, the former CEO of Celgene, which is now a part of Bristol Myers Squibb after being acquired in 2019.

In 2014, for instance, Alles ordered an emergency price increase so Celgene could meet its quarterly revenue targets.

In an email, Alles wrote that disappointing sales of Revlimid were “forcing me to reconsider the 2014 pricing plan” for the drug in the U.S.

“I have to consider every legitimate opportunity available to us to improve our Q1 performance,” Alles wrote.

The company raised the price 4 percent overnight.

During the hearing, Alles was pressed by Rep. Katie Porter (D-Calif.) to explain whether the drug has improved at all during the 15 years it has been on the market.

“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, as she drew the price increases on a dry erase board. 

“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,” Porter said.

Porter also pressed Alles on his compensation and bonuses tied to the increases.

In 2017, for instance, Alles received a bonus of more than $2 million. The staff report found that “without three price increases on Revlimid that year, Celgene’s revenue would have been nearly $600 million lower and executives likely would not have achieved the revenue targets needed to receive their full bonuses.”

The report found that executives at Celgene and Teva specifically targeted the U.S. market for massive increases because Medicare is not allowed to negotiate drug prices.

Internal Teva documents warned that the legislative reform that posed the greatest threat to Teva’s future revenue was “Medicare Reform: Removal of government non-interference.”

Since launching the multiple sclerosis medication Copaxone in 1997, Teva raised the price of the drug 27 times. Due to these price increases, a yearly course of Copaxone is priced at nearly $70,000 today as compared to less than $10,000 in 1997. 

The company introduced new formulations of the drug to extend its monopoly pricing, and contracted with specialty pharmacies and pharmacy benefit managers to limit generic substitution.

Rep. Rashida TlaibRashida Harbi TlaibTrump attacks Omar for criticizing US: ‘How did you do where you came from?’ George Conway: ‘Trump is like a practical joke that got out of hand’ Pelosi endorses Kennedy in Massachusetts Senate primary challenge MORE (D-Mich.) slammed Teva CEO Kåre Schultz for using donations to charitable foundations to boost the company’s sales. 

“Your pharmaceutical company makes these so-called charitable donations so you look like you give a shit about sick people,” Tlaib said. “But in reality these are just another scheme by your corporation to make money off of sick people.”

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Newsrust: House Democrats slam pharma CEOs for price hikes driven by revenue, executive bonuses
House Democrats slam pharma CEOs for price hikes driven by revenue, executive bonuses
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