We need Clare-ity on drug prices.
1. Follow the Money: Pharma Peddles Influence in State Races
2. Drug Pricing on the Ballot
3. Taxpayer Cash Flows to Pharma
4. Transparency Needed
5. Betting on Pandemic PR
WASHINGTON, D.C. —This week, two independent investigations detailed how Big Pharma is showering state and federal officials with tens of millions of dollars in hopes of winning their votes in legislative fights next year.
“Pharma may have deep pockets, but patients have our voices and our votes,” said David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs Now. “This election year, patients are sending a message to legislators at all levels: Stand with patients, not pharma.”
According to STAT News’ analysis, Big Pharma has conducted a coordinated effort to win favor in state legislatures. “Major pharmaceutical companies and trade groups have helped to fund the campaigns of 1,933 state legislators nationwide in the current election cycle,” according to the investigation.
The Houston Chronicle highlights the influence pharma is attempting to buy in key Texas congressional races. Nationwide, the article highlights the industry’s commitment to congressional donations: “The pharmaceutical industry had already spent $26 million on congressional campaign donations through the first six months of the year trying to influence outcomes.”
In September, Patients For Affordable Drugs Now launched an effort to push back on Big Pharma’s lobbying influence. The grassroots campaign lifts up the voices of patients and calls on voters to support candidates who will stand up to Big Pharma and fight to lower prescription drug prices.
Nearly 8 in 10 Americans say drug prices are “unreasonable,” and nearly 1 in 3 Americans report not taking their medication as prescribed due to price. According to a recent national survey, 7 out of 10 likely voters say a candidate’s position on lowering prescription drug prices is important in deciding who to vote for — including 30 percent who say it is very important.
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Time flies when you’re lowering drug prices.
1. We Already Own It
2. Do Better, America
3. Big Pharma Scam
Welcome to the Week in Review.
1. Pharma Exposed
2. Debate Dishonesty
3. Life or Death
WASHINGTON, D.C. —An insidious culture of greed is pervasive across the pharmaceutical industry, and today the scale of the problem was revealed. The House Oversight Committee’s investigation into drug corporations exposed a disturbing pattern of abusive pricing practices, anti-competitive behavior, and manipulative marketing campaigns.
Not a single price increase was linked to investment in research and development, according to the documents. Instead, drug corporations took unrelenting price increases to meet revenue goals, increase executive bonuses, and maximize corporate profits.
The reports examine Amgen, Novartis, and Mallinckrodt and reveal the falsehoods behind pharma’s favorite talking points.
Read highlights from the damning documents below.
1. Pharma Claim: High prices exist to recoup R&D, not drive profits.
The reality: Executives’ motivations for price hikes is devoid of desire to recoup or invest in R&D — instead the hikes are intended to increase revenue. Internal company documents showed that company executives weighed price increases against public backlash, not the actual impact on research and development funds. Ultimately, executives decided in favor of price hikes because “we will receive the same press regardless” and “any price increase obviously has positive results.”
2. Pharma Claim: We make life-saving drugs — it’s not about the money for us.
The reality: The committee’s investigation found that executive compensation policies incentivized price hikes. Novartis increased the price of Gleevec 22 times, and its revenue soared. As a result, more than 100 Novartis employees made $1 million in 2014 and 2015.
3. Pharma Claim: Our decision-making centers on the health and well-being of patients.
The reality: After public outrage at its $40,000 price for a single vial of Acthar Gel, Mallinckrodt’s CEO urged changing the vial size of Acthar gel (nearly cutting it in half) to appear like the company decreased the price.
4. Pharma Claim: Charity programs ensure our drugs are affordable and accessible.
The reality: Patient assistance programs serve both as a public relations tool for companies and to increase their bottom line. Novartis’ internal strategy documents estimated the rate of return of its co-pay assistance program would be $8.90 for every dollar invested. When weighing “key messages” to employ after a highly scrutinized price hike, one Novartis executive urged colleagues to emphasize contributions to the copay foundation.
5. Pharma Claim: It’s a robust marketplace and drug companies compete based on price.
The reality: Drug companies often collude — not compete. Amgen’s business strategy for its blockbuster Enbrel centered on matching price hikes by its biggest competitor, AbbVie’s Humira. Internal presentations reveal that Amgen planned its price hikes based on the behavior the company anticipated from AbbVie.
6. Pharma Claim: High prices fuel innovation.
The reality: Taxpayer funding fuels innovative new drugs. High prices fuel the growth of Big Pharma revenue. Drug companies don’t invest until public research shows commercial promise.
7. Pharma Claim: Pharmacy benefit managers are responsible for price increases.
The reality: Big Pharma loves to point fingers, but internal documents show price increases on Amgen’s Enbrel and Sensipar are unrelated to rebates negotiated with PBMs. Instead, the price hikes are used to raise the company’s revenue.
Read our takeaways from yesterday’s reports from the House Oversight Committee into pharma giants Celgene and Teva.
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By Sarah Kaminer Bourland, Legislative Director
1. Pharma Claim: High prices exist to recoup R&D, not drive profits.
The reality: Executives’ motivations for price hikes is devoid of desire to recoup or invest in R&D — instead the hikes are intended to increase revenue. Internal company documents showed that company executives weighed price increases against public backlash, not the actual impact on research and development funds. Ultimately, executives decided in favor of price hikes because “we will receive the same press regardless” and “any price increase obviously has positive results.”
2. Pharma Claim: We make life-saving drugs — it’s not about the money for us.
The reality: The committee’s investigation found that executive compensation policies incentivized price hikes. Novartis increased the price of Gleevec 22 times, and its revenue soared. As a result, more than 100 Novartis employees made $1 million in 2014 and 2015.
3. Pharma Claim: Our decision-making centers on the health and well-being of patients.
The reality: After public outrage at its $40,000 price for a single vial of Acthar Gel, Mallinckrodt’s CEO urged changing the vial size of Acthar gel (nearly cutting it in half) to appear like the company decreased the price.
4. Pharma Claim: Charity programs ensure our drugs are affordable and accessible.
The reality: Patient assistance programs serve both as a public relations tool for companies and to increase their bottom line. Novartis’ internal strategy documents estimated the rate of return of its co-pay assistance program would be $8.90 for every dollar invested. When weighing “key messages” to employ after a highly scrutinized price hike, one Novartis executive urged colleagues to emphasize contributions to the copay foundation.
5. Pharma Claim: It’s a robust marketplace and drug companies compete based on price.
The reality: Drug companies often collude — not compete. Amgen’s business strategy for its blockbuster Enbrel centered on matching price hikes by its biggest competitor, AbbVie’s Humira. Internal presentations reveal that Amgen planned its price hikes based on the behavior the company anticipated from AbbVie.
6. Pharma Claim: High prices fuel innovation.
The reality: Taxpayer funding fuels innovative new drugs. High prices fuel the growth of Big Pharma revenue. Drug companies don’t invest until public research shows commercial promise.
7. Pharma Claim: Pharmacy benefit managers are responsible for price increases.
The reality: Big Pharma loves to point fingers, but internal documents show price increases on Amgen’s Enbrel and Sensipar are unrelated to rebates negotiated with PBMs. Instead, the price hikes are used to raise the company’s revenue.
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By Sarah Kaminer Bourland, Legislative Director
1. Pharma Claim: High prices exist to recoup R&D, not drive profits.
The reality: In a 2014 email from Mark Alles, Celgene’s CEO, the executive admits that he’s planning a price hike to meet sales targets. Furthermore, the investigation concluded that Celgene’s internal pricing decisions “were divorced from its calculus regarding future R&D or recouping of past R&D expenditures.”
2. Pharma Claim: We make life-saving drugs — it’s not about the money for us.
The reality: Instead of inviting a competitive market, drug companies thwart competitors at every turn. When news broke that a generic competitor had been delayed, Teva employees celebrated by exchanging emails about the financial implications for their bonuses.
3. Pharma Claim: Our decision-making centers on the safety and well-being of patients.
The reality: Celgene has long cited “safety” concerns as the company’s rationale for blocking generic competition through the FDA’s risk evaluation and mitigation strategies (REMS) program. But internal documents published today show that the company views their REMS program not as a means to promote safety, but as a tool to prevent “generic encroachment” and extend its monopoly.
4. Pharma Claim: Charity programs ensure our drugs are affordable and accessible.
The reality: An internal presentation reveals that Teva averages a 451 percent return on every dollar invested in its copay assistance program. Teva’s program covers out-of-pocket expenses for patients while generating a full reimbursement for the drug corporation from each patient’s insurance company.
5. Pharma Claim: We support solutions to lower drug prices for patients.
The reality: Between 2017 and 2020, Teva spent $11.6 million lobbying Congress in order to thwart reforms that would harm its bottom line. According to internal documents, one of Celgene’s internal goals was to prevent the “legislative erosion” of the program it uses to prevent generics from coming to market.
6. Pharma Claim: High prices fuel new drugs.
The reality: Copaxone generated $34.2 billion in net U.S. revenue for Teva over nearly two decades. The drug corporation spent only 2 percent of that on R&D for the drug. Instead, Teva invested in developing “new” versions of old drugs that offer no therapeutic benefit.
7. Pharma Claim: Pharmacy benefit managers are responsible for price increases.
The reality: Drug companies alone set and control prices. In company PowerPoints, Teva boasted about its success increasing prices.
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WASHINGTON, D.C. — Four patient advocates will deliver recorded testimonials before the House Committee on Oversight and Reform this week at hearings investigating drug company pricing practices. The patient advocates will share their experiences with four high-cost drugs made by pharmaceutical corporations under investigation by the committee.
“Millions of patients across America have been the victims of predatory pricing practices by drug corporations that prioritize profit maximization over public health,” said David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs Now. “Today, patients will stand up to those companies and their CEOs, share their stories, and call on members of Congress to enact reforms to stop Big Pharma’s abusive practices.”
Read a copy of David Mitchell’s testimony submitted for the public record here.
Watch the patient advocates’ testimonials at the hearing here starting at 10 AM today. Below are some highlights of their stories:
Ramae Hamrin, Bemidji, MN, multiple myeloma: Ramae, a single mom with two kids in college, was diagnosed with multiple myeloma in 2018. She relies on Revlimid to stay healthy — but faces terrifying financial burdens to afford the very high price of her medication.
“In order to keep taking this drug, I will have to deplete my life savings, cash out my 401(k), and sell my house. When those funds run out, I’m not sure what I will do. Usually, I am a planner — but I cannot plan for this. I am terrified for my future.”
Therese Humphrey Ball, Portage, IN, multiple sclerosis: When Therese was first prescribed Copaxone in 2003, it cost $1,800 a month and wiped out her savings. By 2017, when Therese lost grant assistance, the price of the drug had risen to $6,000 a month, and Therese was forced to forgo the medication.
“When I was not on the drug, I lost short-term memory and experienced other declines in my cognitive functions. This makes it difficult for me to enjoy doing the things I love, like spending time with my grandchildren. My condition shouldn’t progress faster just because drug companies want to make a few extra bucks.”
Kip Burgess, Chicago, IL, psoriatic arthritis: Kip is a father, an avid cyclist, and a psychologist. At 30, he was diagnosed with psoriatic arthritis. In order to treat the debilitating pain that his condition causes, Kip takes Enbrel, a drug priced at $6,000 a month.
“If my ability to cover those costs goes away, I know I will go back to waking up every morning in pain. These risks cause crippling anxiety on top of the burden of the disease itself. In order to avoid these interruptions in my dosing, I’ve been forced to dip into my savings and jeopardize my financial health to preserve my physical health.”
Heidi Kendall, Missoula, MT, chronic myeloid leukemia: In 2017, Heidi was diagnosed with a blood cancer called chronic myeloid leukemia. To treat it, Heidi was prescribed the drug, Gleevec, which she must take every day for the rest of her life. The price tag is $10,000 per month.
“I’m so grateful for Gleevec. It keeps me alive. But the price tag constantly hangs over my head. Instead of just focusing on my family and my health, I also have to carry around the burden of what would happen if I couldn’t pay for it.”
The four drugs featured in the patient advocates’ testimonials are textbook examples of price gouging and patent abuse.
Revlimid, a cancer drug developed by Celgene and currently sold by Bristol Myers Squibb, costs Medicare more than almost any other drug but is used by fewer than 40,000 patients — less than 0.01 percent of beneficiaries. Celgene and BMS increased the price of the drug nearly 200 percent from 2007 to 2019 and have maintained monopoly pricing power far beyond the period intended by law.
Teva, the company that manufactures the multiple sclerosis medication Copaxone, is under scrutiny for engaging in anti-competitive practices such as product-hopping and shadow pricing that allow it to maintain its pricing power. Since 1997, the company has raised the price of Copaxone by more than 1,000 percent.
Enbrel is a blockbuster drug for Amgen, and the company has gone to extraordinary lengths to protect this revenue source, including leveraging 41 patents to delay generic competition.
Novartis quadrupled the price of its cancer drug, Gleevec, between 2001 and 2015. At the same time, the drug company entered into a collusive agreement with a generic manufacturer to delay less expensive competitors from entering the market.
The House Oversight and Reform committee’s probe into the drug industry was launched in January 2019 under then-chairman Rep. Elijah Cummings’ leadership. Over the past two years, the committee has investigated drug companies’ anti-competitive tactics by reviewing more than 1 million pages of internal documents. In addition to hearing from six current or former executives of top pharmaceutical companies over the next two days, the committee plans to subpoena pharma giant AbbVie for documents relating to its best-selling drugs Humira and Imbruvica.
The hearings begin today and will continue through tomorrow, starting at 10 AM ET each day. Watch the livestream here.
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