Democrats blast Celgene, Teva for price hikes detailed in internal docs


WASHINGTON — A handful of newly elected Democrats, including Rashida Tlaib of Michigan, Ayanna Pressley of Massachusetts and Katie Porter of California put drug industry CEOs on the defensive Wednesday like they’ve never been before.

The trio of freshman lawmakers used an Oversight Committee hearing to press the CEOs of Teva, Celgene and Bristol-Myers Squibb — painfully and directly — on the results of an 18-month investigation into the pricing of two drugs: Teva’s Multiple Sclerosis drug copaxone and Bristol-Myers Squibb’s multiple myeloma drug revlimid.

Porter, a former consumer protection attorney who has made a name for herself by embarrassing CEOs with prosecutorial questions and a white board, lived up to her reputation. She used that white board to display Celgene’s repeated price hikes for revlimid, which now costs $763 per dose, up from $215 in 2005, and demanded that Mark Alles, who served as Celgene’s CEO until Bristol Myers Squibb acquired the company in 2019, on explain whether the drug had improved over the same time period.

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When Alles tried to insist that the drug was approved for new indications, Porter pressed harder.

“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. “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.”

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Tlaib took on Teva’s CEO Kåre Schultz, forcing him to describe how the company uses charity programs to boost their sales. When Schultz insisted that the programs weren’t used to make money, she pulled out internal documents showing Teva mapped out return on investments from their charity programs,

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

Pressly repeatedly pressed Alles on how much the government had invested in the development of revlimid. She laid out, study by study, the development of the drug, and at each turn she asked Alles if he knew the studies were funded by the government. She also pressed him on an internal email in which he boasted that the financial analysis that guided Celgene’s decision to invest in the drug dramatically underestimated how much the drug would be worth.

But the fireworks from the freshmen came more than three hours into a largely uneventful hearing that did little to inform the public on how drug companies price their drugs. The hearing was billed as a deep dive into the lengthy investigation, but it quickly devolved Wednesday into a debate over who has the better plan to lower drug prices: Republicans or Democrats.

From the time Oversight Committee Chairman Carolyn Maloney (D-N.Y.) gaveled Wednesday’s hearing to order, Democrats seemed intent on making it an extended pitch for their signature drug pricing bill, known as H.R. 3, which would allow Medicare to negotiate over drug prices, akin to the way that many European governments negotiate for drugs and other health care services. Republicans responded in kind, repeatedly accusing Democrats of importing socialism and threatening medical progress. They pitched their own much narrower bill, H.R.19, as the best capitalist solution to drug prices. The bill is a combination of more than 35 bipartisan drug pricing bills, like a bill to crack down on so-called pay-for-delay deals and another that would cap what seniors can pay each year for drugs at $3,100.

For the hearing’s first three hours, both parties seemed more intent on using the CEOs of Celgene, Bristol Myers Squibb and Teva to set up their jabs across the aisle, rather than to question them about the revelatory and brazen findings of the investigation report.

“Some of my colleagues in Congress support moving toward socialized medicine, can you speak to the effects of socialized medicine on the pursuit of medical innovation?” asked Rep. Fred Keller (R-Pa.).

The first two-thirds of the hearing seemed an anti-climatic end to the investigation, which looked into more than a million internal corporate documents. The committee, which released two reports Wednesday outlining their findings, did substantiate a number of incriminating tactics used by drug makers to jack up their prices, but those findings were hardly mentioned in the first hours of the hearing.

At times, the hearing also devolved into questions about the basics of the drug supply chain. “Do generics generally bring the pricing down for the consumers?” asked Rep. Michael Cloud (R-Texas), who came armed with a giant poster board mapping out the drug pricing supply chain.

The one flash point in the hearing’s first three hours came from Rep. Jamie Raskin (D-Md.), who was the rare senior lawmaker Wednesday who seemed able to both jab across the aisle and question the drug industry.

Raskin noted that while Republicans and drug CEOs continue to say cutting drug prices would hurt research and development, Teva’s own internal documents, he insisted, showed that Teva executives knew that talking point was false.

“Other documents your company produced to the committee directly contradict those talking points,” Raskin said, pointing to an internal powerpoint uncovered by the investigation which showed Teva knew it spent less on research and development than any other drug company.

“In direct contradiction to the talking points that we got from your company and that we are hearing today, Teva could not report to the committee a single R&D expenditure that took place after 2015 and yet there have been multiple price increases since 2015, how would you justify that?” Raskin said.

Teva’s Schultz was the clear loser of Wednesday’s hearing. He declined to answer nearly all of the questions posed to him about Teva’s behavior because, he claimed, they dealt with decisions which happened before he took over as CEO in 2017.

By the second hour, lawmakers were so frustrated with his answers that began openly insulting Schultz.

“I just want to congratulate you on being able to answer, from my estimate, about 50 percent of these questions by saying you weren’t there,” said Rep. John Sarbanes (D-Md.) “It would have been nice to come, maybe, equipped a little bit better.”

“You might as well get off the screen,” Gomez added, referring to Schultz’s appearance via video conference.





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