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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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Donald Trump and Eldest Three Children Hit With Fraud Lawsuit From New York AG

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AG Letitia James says that the former president “falsely inflated his net worth by billions of dollars to unjustly enrich himself.” 


Lawsuit Filed Against Trump 

New York Attorney General Letitia James announced on Wednesday that she filed a civil lawsuit against former president Donald Trump and his three eldest children over allegations that they fraudulently inflated asset valuations within the Trump Organization.

Donald Trump Jr., Eric Trump, and Ivanka Trump are all listed alongside their father in the lawsuit. Executives Jeffrey McConney and Allen Weisselberg, the latter of whom recently pled guilty to tax crimes, are also listed alongside other Trump businesses. 

“Donald Trump, with the help of his children…and senior executives at the Trump Organization, falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things,”  a press release announcing the lawsuit claimed. 

The Attorney General’s office claims that between 2011 and 2021, Trump and the Trump Organization made 200 false and misleading claims about asset values on annual financial statements.

The lawsuit was filed Wednesday in a State Supreme Court in Manhattan. 

“The complaint demonstrates that Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the system, thereby cheating all of us,” James said while announcing the complaint. 

Her office is seeking to permanently ban Trump and his children from serving as an officer or director in any New York corporation and to bar Trump and his organization from entering into any New York real estate acquisitions for five years. The office is also seeking to recover $250 million in penalty payments, among other forms of relief. 

 The Office of the Attorney General has also referred the matter to the federal attorneys in New York and to the IRS for criminal investigation. 

“There aren’t two sets of laws for people in this nation: former presidents must be held to the same standards as everyday Americans,” James added in a statement on social media. 

“Trump’s crimes are not victimless,” she continued. “When the well-connected and powerful break the law to get more money than they are entitled to, it reduces resources available to working people, small businesses, and taxpayers.”

Trump Allegedly Inflated Key Assets

According to James’ release, Trump “made known through Mr. Weisselberg that he wanted his net worth on his statements to increase every year.”

“And the statements were the vehicle by which his net worth was fraudulently inflated by billions of dollars year after year,” the release continued. 

Among the assets Trump and his organization allegedly inflated was the Trump Tower Triplex, an apartment Trump allegedly claimed was 30,000 square feet when it is just around 11,000 square feet. Because of its ballooned size, the property was valued at $327 million in 2015, roughly three times as much as the sole apartment in New York City to ever sell for over $100 million at the time. 

For further comparison, the highest sale for a listing in Trump Tower at the time was only $16 million. 

Trump also allegedly claimed Mar-a-Lago was valued as high as $739 million based on the “false premise” that the property could be developed and sold for residential use. The lawsuit claims that Trump actually signed deeds donating those rights, limiting the property’s use to a social club. James and her office claim its value would fall closer to $75 million. 

Inflated Clauations Cannot Be “Excused”

“The inflated asset valuations in the Statements cannot be brushed aside or excused as merely the result of exaggeration or good faith estimation about which reasonable real estate professionals may differ,”  the lawsuit states, adding that instead, they are the result of improper methodology intentionally meant to falsely boost Trump’s net worth. 

The investigation into Trump’s alleged fraud began nearly three years ago, and the former president has repeatedly called it a politically motivated witch hunt. His attorney, Alina Habba, doubled down on that rhetoric in a statement Wednesday. 

“Today’s filing is neither focused on the facts nor the law – rather, it is solely focused on advancing the Attorney General’s political agenda,” Habba said. “We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General’s meritless claims.”

For his part, Trump has blasted the lawsuit on Truth Social, calling James a “fraud” and a “crime-fighting disaster.”

Trump previously tried to impede the probe but was ultimately ordered by a judge to sit for a deposition and turn over subpoenaed documents. Reports say he pled the fifth hundreds of times during his deposition. 

See what others are saying: (Bloomberg) (The Washington Post) (Reuters)

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Hurricane Fiona Causes “Catastrophic” Damage in Puerto Rico, Leaving Many Without Power

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While power has been restored to some, more than a million remain without it as continued rainfall, flooding, and landslides are expected to cause further damage across the island.


Hurricane Fiona Wreaks Havoc

Hurricane Fiona made landfall in Puerto Rico Sunday, bringing heavy rains, flooding, and landslides, while also knocking out power for the entire island and killing at least one person.

Photos and videos posted on social media show floodwaters consuming major streets and engulfing cars. Some pictures show an entire bridge flooded, making it impassible. Other footage shows a different bridge entirely uprooted and a metal barrier ripped away from the road and floating down a river of floodwater.

Officials have said conditions are still too dangerous to fully evaluate the extent of the crisis. In remarks to the public, Puerto Rico’s governor, Pedro Pierluisi, described the damage as “catastrophic.”

He asserted that the storm has been one of the most significant since Hurricane Maria — which hit the island almost exactly 5 years ago to the day — killing more than 3,000 people, leaving many without power for months, and causing destruction that the island is still recovering from.

Pierluisi noted that Puerto Rico has received over 30 inches of rain and that some areas have even gotten more rain than during Hurricane Maria. As of Monday afternoon, the National Gaurd has led 30 rescue operations so far, saving more than 1,000 stranded residents in 25 municipalities, according to the governor.

Pierluisi also added that more than 2,000 people were in the island’s 128 shelters, with officials further saying there is plenty of shelter space for those who need it. On Sunday, President Joe Biden approved an emergency declaration for Puerto Rico, which will allow federal agencies to coordinate disaster relief.

Continued Issues As Storm Rages On

Meanwhile, Puerto Rico’s water authority has confirmed that just over 70% of the island is still without water. According to poweroutage.us, more than 1.3 million customers were still without power as of Monday morning.

The power company LUMA also stated that electricity had been restored to around 100,000 customers over the course of Sunday night, though it previously warned that the full restoration of power could take several days as the storm has created “incredibly challenging” conditions.

While Hurricane Fiona has passed through Puerto Rico, having now made landfall in the Dominican Republic, officials and experts say that heavy rains and further flooding are still to be expected for the next few days.

The National Weather Service has warned that “life-threatening and catastrophic flooding” as well as mudslides and landslides are expected to continue across the island. As a result, Pierluisi has urged Puerto Ricans Monday to remain home and in shelters so that officials can continue to respond to others in need.

He also noted that the areas most impacted by the hurricane include the southern part of the island, the southwest, and the mountains.

After moving through the Dominican Republic, Hurricane Fiona is expected to head towards Turks and Caicos Tuesday. The National Hurricane Center has said that the storm will continue to grow and by Wednesday, it is set to become a major hurricane — which means a Category 3 or higher.

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

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Government Aid Cut Child Poverty in Half During Pandemic, Data Shows

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The reduction occurred similarly across geography, race, family type, and citizenship status.


Largest Drop in Half a Century

The United States’s child poverty rate sank to the lowest level on record last year, primarily thanks to pandemic relief measures and other government programs, according to an analysis of census data released Tuesday.

The Center on Budget and Policy Priorities analyzed data from the Census Bureau’s supplementary poverty measure, which accounts for safety net programs and tax credits as well as regional differences in the cost of living.

From around 11% in 2019, the percentage of kids living below the poverty line fell to 9.7% in 2020 and 5.2% the year after that.

In just two years, nearly 5.5 million kids were lifted from poverty, marking an almost 60% drop in the child poverty rate.

The Center’s researchers gave most credit to the federal government’s numerous interventions in the economy, from stimulus payments and the expanded child tax credit to eviction moratoriums and expanded unemployment insurance.

Without government intervention, poverty in 2020 would have experienced its second-largest recorded increase, the Center claimed, but instead, it underwent the largest single-year decline in over half a century.

Especially impactful was the expanded child tax credit, which sent up to $300 per child to households with children every month between July and December 2021.

According to the analysis, this policy alone pulled nearly three million kids out of poverty.

But the tax credit’s expansion expired at the end of the year despite Democrats’ efforts to prolong it with Biden’s signature Build Back Better bill, which was blocked by Sen. Joe Manchin (D-WV), who reportedly told colleagues he was concerned that families might use the payments to buy drugs.

Poverty Before COVID

Child poverty has fallen by 59% since 1993, when it sat at around 28%, according to another analysis published Sunday by The New York Times and the nonpartisan group Child Trends.

They found that the decline occurred across all 50 states and D.C., as well as in different levels of poverty.

It similarly affected nearly all subgroups of children, — white, Black, Asian and Hispanic, single-parent and two-parent, immigrant and non-immigrant.

The causes driving the pre-pandemic decline included general economic improvement — low unemployment, a higher labor force participation rate among single mothers, and growing state minimum wages — but the researchers pinned government welfare programs as the dominant factor.

They specifically mentioned the earned income tax credit, social security, unemployment insurance, and nutrition and housing assistance.

Despite the positive trend, more than eight million children still live below the poverty line, and that number excludes those who live just above it but still struggle to meet basic needs.

The current poverty line sits around $29,000 for a family of four in a location with typical living costs.

Moreover, disparities still persist, with Black and Latino children about three times as likely as their white peers to be poor.

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

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