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Rep. Katie Porter Calls Out Big Pharma CEO for Profiting Off Drug Price Hikes

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  • A now-viral clip of Rep. Katie Porter shows her laying into the former CEO of the drug company Celgene for tripling the price of a cancer drug and detailing how that price hike was connected to the CEO’s salary. 
  • The clip comes from a hearing concluding a damning 18-month investigation that found drug company profits are the largest driver of drug price increases and gouging.
  • The reports show that the companies intentionally drove up the prices of essential drugs to meet quarterly earnings goals, engaged in anti-competitive behavior, and lobbied extensively against reforms.

Viral Video

Rep. Katie Porter (D-Ca.) trended on Twitter Wednesday after grilling the former CEO of the drug company over price hikes for the cancer drug Revlimid.

In a viral video, which now has over 19 million views, a white-board wielding Porter writes the number “$13 million” and asks Celgene CEO Mark Alles if it “rings any bells.”

“This was your compensation in 2017 for being CEO of Celgene, and that’s a lot of money. It’s 200 times the average American’s income and 360 times what the average senior gets on Social Security,” she said.

“Now, of that 13 million, about 2.1 million came from your company hitting yearly earnings targets, and more than half of the bonus formula was based on those targets,” she continued. “Any increase in the price of Revlimid would also increase your bonus by increasing earnings, isn’t that right Mr. Alles?”

Alles responded that that assessment was correct, and Porter went on to tell him that the House Oversight Committee found “that if you hadn’t increased the price of Revlimid you wouldn’t have gotten your bonus.”

“In fact, you personally received half a million dollars personally just by tripling the price of Revlimid,” she added. “So, 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. And to be clear, the taxpayer spent $3.3 billion on Revlimid.” 

House Investigation Findings

The now-viral video comes from a House Oversight Committee hearing that took place Wednesday.

The hearing, which was the first of two, marks the conclusion of a nearly two-year-long investigation by the committee’s Democrats into prescription drug price gouging. The reports from that investigation — two of which were also released ahead of the hearing — are incredibly damning. 

Those first two reports focus on Celgene, which is now owned by the drug company Bristol Myers Squibb, and its pricing of Revlimid, as well as another pharmaceutical company called Teva and its multiple sclerosis drug Copaxone. 

Among other things, both reports reveal how the massive profits these companies made have been the driving force in the huge price increases for these essential drugs. 

According to the reports, Teva has raised the price of Copaxone 27 times since 2007, and because of those price increases, an annual course of the drug now costs nearly $70,000  — seven times the $10,000 it cost in 1997. 

As for Revlimid, since 2005, Celgene has raised the price of the drug 22 times, from $215 per pill to $719, the report said. After Bristol Myers Squibb got the rights to Revlimid last November, it raised the price again, to $763 per pill. 

Those price hikes have been insanely profitable. As the reports outline, Copaxone has brought in more than $34 billion in net profits for Teva just in the U.S. alone. Meanwhile, just between 2009 and 2018, Celgene collected $51 billion in net revenues from Revlimid sales worldwide and $32 billion in the U.S. 

As Porter mentioned in the viral clip, the reports also found that those profits end up costing taxpayers and Medicare tens of billions of dollars, which are then used to pay generous executive bonuses.

Another hearing is set to be held Thursday with testimonies from other CEOs of other drug companies. The reports on those companies will be released ahead of the hearing as well.

Reports Contradict CEO Testimonies

In Wednesdays hearing, Alles, as well as the CEO of Teva, both defended the price hikes as above-board and merited.

“The pricing decisions for our medicines were guided by a set of long-held principles that reflected our commitment to patient access, the value of a medicine to patients in the health care system, the continuous efforts to discover new medicines and new uses for existing medicines and the need for financial flexibility,” Alles told the representatives.

However, Porter specifically asked Alles if the drug’s formula had been substantially improved from 2005 , when the pill cost $215, to now, when it costs three times more. Alles confirmed that the manufacturing for the drug had not changed, but said it had been approved for new uses.

Arguably even more damning is the fact that internal documents and emails included in the report showed that executives at both Celgene and Teva raised prices unrelated to costs in order to meet quarterly profit goals.

In one of the most explicit examples, the Celgene report notes that in 2014, Alles — who was then the executive vice president of the company — ordered the price of Revlimid be jacked up by 4% because the company had not met its first-quarter sales goals. Just days later, Alles gave a presentation to the company’s drug pricing advisory board that noted the increase would result in $24 million in new net sales.

As for Teva, the company’s CEO Kåre Schultz also defended the price jacking of Copaxone during the hearing, though he offered another explanation.

“In order for any pharmaceutical company to research and develop new drugs, or improve old ones, the price of successful medicines must reflect the significant cost of ongoing research and development projects,” he said. “The public only sees and pays for the drugs that are ultimately approved by the government, like Copaxone, but you have to expend a lot of resources and endure many disappointments before bringing to the market safe and effective medicines.”

The committee’s report on Teva also disputes that claim too. In fact, it specifically found that Teva has only spent $689 million on research related to Copaxone since 1987 — just 2% of the nearly $34 billion it has taken in net revenue for the drug.

Other Findings

Beyond the price hikes, the reports also gives the public what has been described as the clearest proof to date that large drug companies are engaged in anticompetitive behavior to force competitors out of the market.

In one of the most egregious examples, Teva put out a new, stronger version of Copaxone as part of what they referred to as a coordinated “generic defense strategy.” According to internal documents, that strategy included working with middlemen to block other generic drugs from getting market access, as well as launching aggressive campaigns to lobby doctors and patients to stick with the more expensive version of the drug.

To that point, the Congressional reports also show how these companies have lobbied extensively against regulations and reforms that would prevent them from ramping up drug prices. However, in providing the public with this information, the Democrats on the committee hope to push for substantial drug pricing reforms. 

In a letter prefacing the reports, Oversight Committee Chair Carolyn Maloney (D-Ny.) emphasized the need for comprehensive legislation such as the drug price bill passed by the House back December known as H.R. 3, which would reform the system by allowing Medicare to negotiate directly with drug companies over prices.

As Maloney notes, that bill essentially died in the Senate because President Donald Trump openly opposed it and Senate Republicans refused to even bring it for a vote. 

See what others are saying: (Stat News) (NBC News) (The Cut)

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SAT Drops Subject Tests and Optional Essay Section

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  • The College Board will discontinue SAT subject tests effective immediately and will scrap the optional essay section in June. 
  • The organization cited the coronavirus pandemic as part of the reason for accelerating these changes.
  • Regarding subject tests, the College Board said the other half of the decision rested on the fact that Advanced Placement tests are now more accessible to low-income students and students of color, making subject tests unnecessary. 
  • It also said it plans to launch a digital version of the SAT in the near future, despite failing to implement such a plan last year after a previous announcement.

College Board Ends Subject Tests and Optional Essay

College Board announced Tuesday that it will scrap the SAT’s optional essay section, as well as subject tests.

Officials at the organization cited the COVID-19 pandemic as part of the reason for these changes, saying is has “accelerated a process already underway at the College Board to simplify our work and reduce demands on students.”

The decision was also made in part because Advanced Placement tests, which College Board also administers, are now available to more low-income students and students of color. Thus, College Board has said this makes SAT subject tests unnecessary. 

While subject tests will be phased out for international students, they have been discontinued effective immediately in the U.S. 

Regarding the optional essay, College Board said high school students are now able to express their writing skills in a variety of ways, a factor which has made the essay section less necessary.

With several exceptions, it will be discontinued in June.

The Board Will Implement an Online SAT Test

In its announcement, College Board also said it plans to launch a revised version of the SAT that’s aimed at making it “more flexible” and “streamlined” for students to take the test online.

In April 2020, College Board announced it would be launching a digital SAT test in the fall if schools didn’t reopen. The College Board then backtracked on its plans for a digital test in June, before many schools even decided they would remain closed.

According to College Board, technological challenges led to the decision to postpone that plan.

For now, no other details about the current plan have been released, though more are expected to be revealed in April. 

See what others are saying: (The Washington Post) (NPR) (The New York Times)

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Biden To Block Trump’s Order Lifting COVID-19 Travel Ban

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  • President Trump issued an executive order Monday lifting a ban on travelers from the Schengen area of Europe, the U.K., Ireland, and Brazil. 
  • Trump said the policy will no longer be needed starting Jan. 26, when the CDC will start requiring all passengers from abroad to present proof of a negative coronavirus test before boarding a flight.
  • The move was cheered by the travel industry; however, incoming White House press secretary Jennifer Psaki warned that Biden’s administration does not intend to lift the travel restrictions. 

Trump Order End To COVID-19 Travel Ban

President Donald Trump issued an executive order Monday ending his administration’s ban on travelers from the Schengen area of Europe, the U.K., Ireland, and Brazil.

That ban was put in place last spring in an effort to curb the spread of coronavirus in the U.S. In his announcement, however, Trump said the policy will no longer be needed starting Jan. 26, when new rules from the Centers for Disease Control and Prevention go into effect.

Starting that day, the CDC will require all passengers from abroad to present proof of a negative coronavirus test before boarding a flight.

The recommendation to lift the ban reportedly came from Alex Azar, the U.S. Secretary of Health and Human Services. According to Trump’s proclamation, “the Secretary reports high confidence that these jurisdictions will cooperate with the United States in the implementation of CDC’s January 12, 2021, order and that tests administered there will yield accurate results.”

It’s worth noting that the ban will stay in place for travelers from Iran and China. Still, Trump’s announcement was generally cheered by members of the travel industry who have been pushing to lift the ban and require preflight testing instead. 

Biden To Block Trump’s Order

Soon after the news broke, the incoming White House press secretary for President-elect Joe Biden, Jennifer Psaki, warned that Biden would block Trump’s order.

“With the pandemic worsening, and more contagious variants emerging around the world, this is not the time to be lifting restrictions on international travel,” she wrote on Twitter.

“On the advice of our medical team, the Administration does not intend to lift these restrictions on 1/26.  In fact, we plan to strengthen public health measures around international travel in order to further mitigate the spread of COVID-19,” she added.

With that, it seems unlikely that Trump’s order will actually take effect. 

It’s also worth noting that this is one of many executive orders Trump has issued just before inauguration day.

Source: Whitehouse.gov/presidential-actions

Some of these orders could soon be overturned once Biden takes office Wednesday. Biden is also expected to roll out his own wave of executive orders in his first 10 days as president.

See what others are saying: (The Wall Street Journal) (The New York Times) (CNN)

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New COVID-19 Variant Could Become Dominant in the U.S. by March, CDC Warns

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  • The CDC warned Friday that a new highly transmissible COVID-19 variant could become the predominant variant in the United States by March.
  • The strain was first reported in the United Kingdom in December and is now in at least 10 states.
  • The CDC used a modeled trajectory to discover how quickly the variant could spread in the U.S. and said that this could threaten the country’s already overwhelmed healthcare system.

CDC Issues Warning

The Centers for Disease Control and Prevention warned Friday that the new COVID-19 variant could become the predominant variant in the United States by March.

While it is not known to be more deadly, it does spread at a higher rate, which is troubling considering the condition the U.S. is already in. Cases and deaths are already on the rise in nearly every state and globally, 2 million lives have been lost to the coronavirus. 

The variant was first reported in the United Kingdom in mid-December. It is now in 30 countries, including the U.S., where cases have been located in at least ten states. Right now, only 76 cases of this variant have been confirmed in the U.S., but experts believe that number is likely much higher and said it will increase significantly in the coming weeks. It is already a dominant strain in parts of the U.K.

Modeled trajectory shows that growth in the U.S. could be so fast that it dominates U.S. cases just three months into the new year. This could pose a huge threat to our already strained healthcare system.

Mitigating Spread of Variant

“I want to stress that we are deeply concerned that this strain is more transmissible and can accelerate outbreaks in the U.S. in the coming weeks,” said Dr. Jay Butler, deputy director for infectious diseases at the CDC told the New York Times. “We’re sounding the alarm and urging people to realize the pandemic is not over and in no way is it time to throw in the towel.”

The CDC advises that health officials use this time to limit spread and increase vaccination as much as possible in order to mitigate the impact this variant will have. Experts believe that current vaccines will protect against this strain.

“Effective public health measures, including vaccination, physical distancing, use of masks, hand hygiene, and isolation and quarantine, will be essential,” the CDC said in their report.

“Strategic testing of persons without symptoms but at higher risk of infection, such as those exposed to SARS-CoV-2 or who have frequent unavoidable contact with the public, provides another opportunity to limit ongoing spread.”

See what others are saying: (Wall Street Journal) (New York Times) (NBC News)

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