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Attacked for years over high drug prices, the pharmaceutical industry has routinely defended itself by arguing that research is expensive and risky and that rebates to middlemen are growing.

But a congressional probe unveiled Wednesday plainly highlights another reason Celgene raised the price for multiple myeloma drug Revlimid numerous times over the years—to hit aggressive sales targets. 

On separate occasions in 2014 and beyond, the drugmaker—which has since been acquired by Bristol Myers Squibb—raised Revlimid prices as sales lagged analyst expectations or fell short of its aggressive internal targets.

That’s according to the House Committee on Oversight and Government Reform, which distilled 50,000 pages of documents into a 45-page report (PDF) unveiled Wednesday. And the committee’s releasing that report just as ex-Celgene CEO Mark Alles and Bristol Myers chief Giovanni Caforio head to Capitol Hill to testify.

Celgene launched Revlimid in 2005 at a price of $215 per pill. After more than 20 price hikes, the drug now costs $763 per pill, or $16,023 per month. And the committee concluded that those years of price hikes didn’t depend on R&D investment or rebate pressure.

Indeed, during a 2015 deposition, a former Celgene VP said execs could raise Revlimid’s price “any time they wanted.” The congressional committee found several examples to back that claim.

Fierce Pharma

In early March 2014, Celgene’s then-executive vice president Mark Alles wrote a Saturday morning email to a colleague, saying the company’s forecast first-quarter sales for Revlimid were “forcing me to reconsider the 2014 pricing plan” for the drug in the U.S. The first quarter at the time looked “extremely challenged,” so Alles requested a Monday conversation over the “pros and cons” of a 4% price hike “not later than the end of next week” and then another increase Sept. 1 of that year. 

“I have to consider every legitimate opportunity available to us to improve our Q1 performance,” he wrote. Alles later became Celgene’s CEO. 

Days later, Alles presented the proposed price increase to a board at Celgene that approved Revlimid price increases, touting a potential revenue boost of $24.8 million from the move. Ahead of that meeting, he wrote to his team asking whether Celgene could “take the increase tonight so that it impacts sales beginning tomorrow.”  

After the board approved, Celgene hiked the price that same night. 

Other price increases also centered on revenue projections or long-term expectations, the committee’s probe found. In early 2016, Celgene execs weighed a more aggressive price increase than they had originally planned for that year, and they laid out the proposal in a presentation.   

Instead of an April 2016 price increase of 3%, the company’s management proposed a 6.8% increase in March—plus a 3% increase in September. The more aggressive plan would deliver $217 million in additional revenues in 2016 and 2017, the presentation said.  

The drugmaker moved on the 6.8% increase in March—and a 3% increase in August.

A 2017 document outlines how “favorable net price” changes would help the company grow its multiple myeloma franchise from $4.8 billion in 2016 to $8 billion in 2020. After that presentation, the company repeatedly raised Revlimid’s price, sending it upward by 30% between January 2017 and January 2019, the report says. In 2017 alone, the company raised Revlimid’s price by nearly 20% in a series of hikes.

But if the company’s goal was to grow its multiple myeloma business to $8 billion, the strategy worked. In 2018—two years ahead of the 2020 target—the franchise hit $7.8 billion on a massive $6.46 billion contribution from Revlimid. 

For years, the pharma industry’s defense of price hikes has centered on high R&D costs, risky investments and rebates to middlemen. But the committee found those reasons didn’t apply in Revlimid’s case. Celgene “relied heavily on taxpayer-funded academic research to develop Revlimid, and its internal pricing decisions appear to have been unrelated to past or future investment in research and development,” the investigation found. 

During Wednesday’s hearing, Alles said the company spent considerably on research for its drug. Celgene spent $800 million and 14 years developing Revlimid, Alles said, calling the medicine a “completely independent” development program.

And on the rebate issue, the committee concluded that Celgene paid “no negotiated discounts” to Medicare Part D. On the commercial markets, no discounts were larger than 5%. 

Among other findings of the Celgene probe, the committee found that the company’s executive payment system incentivizes price hikes and that the company targeted the U.S. for high prices because the federal government is prohibited from negotiating prices. 

Further, the company restricted competition by using the U.S. patent system to its advantage and by “abusing” a government drug safety program, the report found. The company’s “anticompetitive tactics” are believed to cost the U.S. healthcare system more than $45 billion through 2025, the committee says.

The late Rep. Elijah Cummings started the probe in early 2019 with letters to companies marketing 19 of the most profitable drugs in the U.S. After his passing last September, the committee pushed the work forward, and now six biopharma CEOs are set to testify on their pricing strategies this week.  

Celgene’s Mark Alles, Bristol Myers Squibb CEO Giovanni Caforio and Teva CEO Kåre Schultz are on the docket today, with Amgen CEO Robert Bradway, Mallinckrodt CEO Mark Trudeau and Novartis’ U.S. president Thomas Kendris set to follow Thursday.

Also Wednesday, the committee released findings into Teva’s strategies on Copaxone. Read Fierce Pharma’s coverage of that report here.

Source: https://www.fiercepharma.com/pharma/celgene-repeatedly-raised-revlimid-s-price-to-meet-aggressive-sales-targets-congressional

Half a million dollars. That’s the bonus a Big Pharma CEO got for hiking the price of ONE cancer treatment drug.

-Rep. Katie Porter

With rising drug prices being one of the biggest health concerns in the United States in 2020, more than 200 drug manufacturers have raised prices on 645 brands with an average price increase of 5.9% through August 2020. This comes in slightly lower than last year during the same time period where 659 brands had an average price increase of 6.6%. Among brands taking price increases this year include Nitro-Dur (Ingenus), used to prevent angina, up 50.0%, Metopirone (Laboratoire HRA Pharma), used to check the pituitary gland’s function, up 37.4%, and Marplan (Validus Pharms Inc), used to treat depression, up 14.9%. Through August, fourteen brands have had price increases of at least 10.0% (see chart).

Overall, price increases for the first eight months of 2020 range from a low of 0.6% for Tisseel VHSD (Baxter Healthcare) to 230.0% for Mytesi. Back in May of this year the manufacturer of Mytesi, Jaguar Health Inc, was asked by Representative Carolyn Maloney, the chair of the House Oversight Committee, and Representative Jackie Speier, a fellow Democratic committee member, to reverse recent price hikes and provide information on the price increases.

These price changes affect list prices, or Wholesale Acquisition Cost* (WAC), that are set by the drug manufacturers without taking into account rebates, insurance, and other discounts that may be available.

As drug prices continue to rise in the United States, both Capitol Hill and President Trump have taken notice. Both sides of the aisle have been pushing their own solutions and July 24, the President signed four executive orders designed to cut prescription drug prices by focusing on drug importation, drug maker rebates, insulin and EpiPen discounts, and international drug pricing. With the presidential election just over two months away, drug prices will most likely continue to be a major concern for voters.

Source: https://www.einpresswire.com/article/525209354/drug-manufacturers-raise-prices-for-645-brands-in-2020-so-far

Drugmakers raised the price of hundreds of medicines during the coronavirus pandemic, even in the face of Trump administration vows to crack down on surging drug costs and efforts to tack price controls on Covid-19 relief packages.

Pharmaceutical companies logged more than 800 price increases this year, and adjusted the cost of 42 medicines upward by an average of 3.3 percent so far in July, according to GoodRx, which tracks the prices consumers pay at pharmacies. While the size of that increase is not out of line with past years, the number of branded drugs seeing hikes this month was higher than last year.

Three treatments for patients with respiratory illnesses but not specifically the coronavirus — Bevespi Aerosphere, Daliresp and Tyvaso — saw hikes of 5 percent, 6 percent and 4.5 percent respectively. Tyvaso’s increases over the year total 12.8 percent and bring its list price to $18,111.22.https://2b20fd5ef99b8a11c5241b821f06d97e.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html

“Business as usual is a problem in a pandemic. These price increases contribute nothing to innovation, but greatly to suffering. These aren’t new drugs,” said Peter Maybarduk, director of the Global Access to Medicines Program at consumer advocacy group Public Citizen.

Significant hikes this month also include AstraZeneca’s six percent increase on heartburn medicine Nexium — to $265.84 for a month’s supply — despite the product being on the market for years and having several generic rivals. Two medicines for childhood ADHD with no generic competitors also saw increases of up to 10 percent.

Drugmakers generally raise prices twice a year, in January and at mid-year. But some have delayed or staggered increases amid increased scrutiny and the fear of catching President Donald Trump’s eye.

White House chief of staff Mark Meadows has signaled the president could issue an executive order as soon as this week that will include measures aimed at high prescription drug costs.

Trump campaigned on a pledge to slash high prescription drug costs, saying days ahead of his inauguration that pharmaceutical companies were “getting away with murder.” He later publicly blasted Pfizer for raising prices on 41 medicines in July 2018. Pfizer said at the time it would delay those hikes for six months or until the president implemented parts of his sweeping drug pricing blueprint

The drugmaker took those expected hikes the next January.

The Trump administration meanwhile has struggled to push some of its drug pricing agenda. A court killed one rule that required drugmaker television ads to include prices. Another rule to eliminate the rebates drugmakers give to payers — which manufacturers blame for rising costs — stalled last year over concerns it would raise seniors’ insurance premiums. A third plan to benchmark U.S. prices for certain medicines to lower prices paid abroad drew flak from conservatives who likened it to price controls.

GoodRx’s analysis doesn’t include physician-administered medicines — such as pricey infusions for cancer and arthritis — so there were likely other cost increases that weren’t reflected in the data. Drugmakers are likely to make other price changes throughout this month, as well.

Industry lobby PhRMA said that GoodRx’s data presents a false narrative “by focusing solely on list prices and ignoring the dynamics of the biopharmaceutical market that control medicine spending.”

List prices, or the sticker cost of a medicine, do not incorporate rebates, discounts and other concessions that pharmaceutical companies give to payers to ensure preferential coverage of products. Those concessions totaled $175 billion in 2019 according to SSR Health, but also typically ensured that drugs would be covered and sometimes given preference over rivals in their category.

PhRMA spokesperson Katie Koziara said that research from health data company IQVIA shows that overall price increases are below annual inflation. “However, it often doesn’t feel that way for patients,” Koziara said in a statement. “We need to fix the health care system so it works better for patients by making sure rebates and discounts are shared with patients at the pharmacy counter and making insurance work like insurance again.”

The Trump administration last year abandoned a plan to eliminate manufacturer rebates and shift to an option of passing discounts to patients due to concerns the change would raise seniors’ premiums in Medicare Part D. Several outspoken critics of the rebate rule, such as former White House domestic policy adviser Joe Grogan and former chief of staff Mick Mulvaney, have since left the administration.

The biggest price hikes logged so far this month have been for the ADHD medicine Adzenys XR and the so-called female Viagra known as Addyi. Neos Therapeutics, maker of the chewable sweet-flavored Adzenys, raised its price by 10 percent. The drug’s average cash price is $439 for a month’s supply, according to GoodRx.

Ironshore Pharmaceuticals also made a 6.1 percent increase to the price for ADHD medicine Jornay PM.

Addyi manufacturer Sprout Pharmaceuticals raised the pill’s price by 9.3 percent to a new list price of $478 for a month’s supply. Though FDA approved Addyi in 2015, it has struggled to gain popularity and the drugmaker halved its price to $400 in 2018.

Some increases are just the latest in years of steady hikes. Biogen bumped the price of multiple sclerosis medicine Tysabri by 3.5 percent this month, the same margin by which it raised the medicine twice in 2019.

Dynavax raised the price for its adult hepatitis B vaccine, Heplisav-B, by 4.7 percent to $120.

“In general, drugs that increase in price are specialty drugs that few people take. But the majority of them were already expensive and only continue to increase in price,” wrote Tori Marsh, GoodRx’s health insights analyst. The company will continue to track price changes throughout the month.

Critics have been quick to blast the recent bout of price hikes. The industry “is sticking with the industry’s business-as-usual, price-hiking playbook,” said Campaign for Sustainable Rx Pricing Executive Director Lauren Aronson in a statement. “Engaging in price hikes during a pandemic, while receiving billions of dollars from taxpayers to help develop COVID-19 treatments, demonstrates why policymakers must act,” she added.

Four House Democrats and a Republican recently introduced a pair of bills addressing drug prices and pricing transparency, but in both cases they target Covid-19 treatments and vaccines, not the industry as a whole. The MMAPPP Act, sponsored by Rep. Jan Schakowsky (D-Ill.), would bar market exclusivity for taxpayer-funded Covid-19 drugs and require the federal government to assure affordable prices; the TRACK Act,sponsored by Rep. Lloyd Doggett (D-Texas) would create a database of federally funded research for Covid-19 treatments, including the terms of agreements with manufacturers.

Manufacturers have received more than a billion dollars from the U.S. government to develop coronavirus vaccines and treatments.

A broader legislative effort in the Senate Finance Committee sponsored by Chair Chuck Grassley (R-Iowa) faltered recently after Grassley accused Democrats of walking away from what was once a bipartisan measure. The bill would have fined drugmakers that increased prices above inflation, but many Senate Republicans balked at applying that measure to Medicare Part D medicines — or those doled out at a pharmacy.

Source: https://www.politico.com/news/2020/07/07/drug-prices-coronavirus-351729