High US drug prices driven by profits, House Oversight Committee report finds
pharmafile | October 1, 2020 | News story | Research and Development |
The rising cost of US drugs are primarily driven by the pursuit of profit by pharmaceutical companies, according to an investigation by Democrats on the House Oversight Committee.
They released two reports focused on Bristol Myers Squibb and Celgene’s Revlimid and Teva Pharmaceutical’s drug Copaxone.
Celgene hiked the price of Revlimid from $215 per pill to $719 per pill when Bristol Myers Squibb purchased it last year. It has risen to $763 per pill or $16,023 for a monthly course, which is triple the original cost in 2005. The drug earned Celgene $32 billion in profits from 2009 to 2018 and Medicare paid $17.5 billion for Revlimid from 2010 to 2018.
According to emails highlighted in the report, the executives at Celgene hiked up the prices to meet quarterly profit goals. Revlimid was also developed using government funds and research and Celgene has protected the price increases through aggressive lobbying tactics.
Mark Alles, who served as Celgene’s CEO until BMS acquired the company in 2019, was grilled by the committee. Rep Katie Porter told Alles: “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.”
In the case of Teva and Copaxone, they raised the price from less than $10,000 in 1997 to nearly $70,000 in 2017. This has helped make the company $34 billion in net profits in the US alone. The price increased every year until 2017 when a generic version of the drug entered the market.
The committee recommended that the best way to stem the rising drug prices was to allow Medicare to negotiate prices. The congressional Democrats want to push forward with their signature drug pricing bill known as HR 3 which would allow this to become law.
Conor Kavanagh
