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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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Lincoln College to Close for Good After COVID and Ransomware Attack Ruin Finances

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Last year, 1,043 schools in the U.S. were the victim of ransomware attacks, including 26 colleges or universities, according to an analysis by Emsisoft.


One of the Only Historically Black Colleges in the Midwest Goes Down

After 157 years of educating mostly Black students in Illinois, Lincoln College will close its doors for good on Friday.

The college made the announcement last month, citing financial troubles caused by the coronavirus pandemic and a ransomware attack in December.

Enrollment dropped during the pandemic and the administration had to make costly investments in technology and campus safety measures, according to a statement from the school.

A shrinking endowment put additional pressure on the college’s budget.

The ransomware attack, which the college has said originated from Iran, thwarted admissions activities and hindered access to all institutional data. Systems for recruitment, retention, and fundraising were completely inoperable at a time when the administration needed them most.

In March, the college paid the ransom, which it has said amounted to less than $100,000. But according to Lincoln’s statement, subsequent projections showed enrollment shortfalls so significant the college would need a transformational donation or partnership to make it beyond the present semester.

The college put out a request for $50 million in a last-ditch effort to save itself, but no one came forward to provide it.

A GoFundMe aiming to raise $20 million for the college only collected $2,452 as of Tuesday.

Students and Employees Give a Bittersweet Goodbye

“The loss of history, careers, and a community of students and alumni is immense,” David Gerlach, the college’s president, said in a statement.

Lincoln counts nearly 1,000 enrolled students, and those who did not graduate this spring will leave the institution without degrees.

Gerlach has said that 22 colleges have worked with Lincoln to accept the remaining students, including their credits, tuition prices, and residency requirements.

“I was shocked and saddened by that news because of me being a freshman, so now I have to find someplace for me to go,” one student told WMBD News after the closure was announced.

When a group of students confronted Gerlach at his office about the closure, he responded with an emotional speech.

“I have been fighting hard to save this place,” he said. “But resources are resources. We’ve done everything we possibly could.”

On April 30, alumni were invited back to the campus to revisit the highlights of their college years before the institution closed.

On Saturday, the college held its final graduation ceremony, where over 200 students accepted their diplomas and Quentin Brackenridge performed the Lincoln Alma Mater.

Last year, 1,043 schools in the U.S. were the victim of ransomware attacks, including 26 colleges or universities, according to an analysis by Emsisoft.

See what others are saying: (The New York Times) (Herald Review) (CNN)

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U.S. Tops One Million Coronavirus Deaths, WHO Estimates 15 Million Worldwide

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India’s real COVID death toll stands at about 4.7 million, ten times higher than official data, the WHO estimated.


One Million Dead

The United States officially surpassed one million coronavirus deaths Wednesday, 26 months after the first death was reported in late February of 2020.

Experts believe that figure is likely an undercount, since there are around 200,000 excess deaths, though some of those may not be COVID-related.

The figure is the equivalent of the population of San Jose, the tenth-largest city in the U.S., vanishing in just over two years. To put the magnitude in visual perspective, NECN published a graphic illustrating what one million deaths looks like.

At the beginning of the pandemic, the White House predicted between 100,000 and 240,000 Americans would die from the coronavirus in a best-case scenario.

By February 2021, over half a million Americans had died of COVID.

The coronavirus has become the third leading cause of death in the U.S. behind heart disease and cancer.

The pandemic’s effects go beyond its death toll. Around a quarter of a million children have lost a caregiver to the virus, including about 200,000 who lost one or both parents. Every COVID-related death leaves an estimated nine people grieving.

The virus has hit certain industries harder than others, with food and agriculture, warehouse operations and manufacturing, and transportation and construction seeing especially high death rates.

People’s mental health has also been affected, with a study in January of five Western countries including the U.S. finding that 13% of people reported symptoms of PTSD attributable to actual or potential contact with the virus.

Fifteen Million Dead

On Thursday, the World Health Organization estimated that nearly 15 million people have died from the pandemic worldwide, a dramatic revision from the 5.4 million previously reported in official statistics.

Between January 2020 and the end of last year, the WHO estimated that between 13.3 million and 16.6 million people died either due to the coronavirus directly or because of factors somehow attributed to the pandemic’s impact on health systems, such as cancer patients who were unable to seek treatment when hospitals were full of COVID patients.

Based on that range, scientists arrived at an approximate total of 14.9 million.

The new estimate shows a 13% increase in deaths than is usually expected for a two-year period.

“This may seem like just a bean-counting exercise, but having these WHO numbers is so critical to understanding how we should combat future pandemics and continue to respond to this one,” Dr. Albert Ko, an infectious diseases specialist at the Yale School of Public Health who was not linked to the WHO research, told the Associated Press.

Most of the deaths occurred in Southeast Asia, Europe, and the Americas.

According to the WHO, India counts the most deaths by far with 4.7 million, ten times its official number.

See what others are saying: (NBC) (U.S. News and World Report) (Scientific American)

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Official Says Missing Alabama Convict and Corrections Officer Had a “Special Relationship”

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Authorities have also said they now believe the officer willfully helped the inmate escape.


New Information on Missing Inmate & Officer

Authorities in Alabama revealed Tuesday that Assistant Director of Corrections for Lauderdale County Vicky White, who is accused of helping a murder suspect Casey Cole White escape from jail, had a “special relationship” with the inmate.

“Investigators received information from inmates at the Lauderdale County Detention Center over the weekend that there was a special relationship between Director White and inmate Casey White,” Lauderdale County Sheriff Rick Singleton said in a statement. “That relationship has now been confirmed through our investigation by independent sources and means.”

Officials have previously said that the two are not related, despite their shared surname.

Singleton elaborated on the nature of the relationship while speaking to CNN later on Tuesday. He said it took place “outside of her normal work hours” and added that although it did not include “physical contact,” he still characterized it as “a relationship of a different nature.”

“We were told Casey White got special privileges and was treated differently while in the facility than the other inmates,” Singleton said.

Also on Tuesday, the Marshals Service issued a statement confirming that authorities believe Officer White had helped Mr. White escape. The authorities described her as a “wanted fugitive” and offered a $5,000 reward for any information on her whereabouts. Earlier this week, the Marshals Service also offered a $10,000 reward for any information that could lead to Mr. White’s capture.

Singleton echoed the belief that Officer White’s actions were intentional while speaking to Good Morning America Wednesday.

“I think all of our employees and myself included were really hoping that she did not participate in this willingly. But all indications are that she absolutely did,” he said. “We’re very disappointed in that because we had the utmost trust in her as an employee and as an assistant director of corrections.”

Mysterious Escape

Vicky White and Casey White were last seen leaving the Lauderdale County jail just after 9:30 a.m. Friday. The officer told other employees that she was taking the inmate to a mental health evaluation at a courthouse just down the road, and that she would be going to a medical appointment after because she was not feeling well.

Officials later said her actions violated an official policy that required two sworn deputies to transport people with murder charges. In 2020, Mr. White was charged with two counts of capital murder in connection to a fatal stabbing he confessed to and was awaiting his trial in Lauderdale County.

Mr. White was also serving time for what officials said was a “crime spree” in 2015 which included home invasion, carjacking, and a police chase. He had also previously tried to escape from jail, police said.

It wasn’t until 3:30 p.m. on Friday that a jail employee reported to higher-ups that he was not able to reach Officer White on her phone and that Mr. White had never been returned to his cell.

During a press conference that same night, Singleton told reporters that there had never even been a scheduled mental health evaluation. At another briefing Monday, he announced that an arrest warrant had been issued for Vicky on a charge of “permitting or facilitating an escape in the first degree.”

At the time, Singleton said it was unclear “whether she did that willingly or was coerced or threatened” but added, “we know for sure she did participate.” 

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