HEALTH CARE BRIEFING: Panel Says Drug Cost Surge Tied to Bonuses

By Brandon Lee and Alex Ruoff

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Lawmakers took aim at drugmaker Celgene for continually boosting the price of the cancer drug Revlimid at the start of a two-day hearing yesterday, saying that in some cases the moves were designed to help company executives meet their bonus targets.

The House Oversight and Reform Committee has been probing drug prices for 18 months. The report from the panel’s Democratic staff highlighted executive communications tying price bumps to revenue projections and bonuses.

Chairwoman Carolyn Maloney (D-N.Y.) focused her remarks on how drug prices are higher in the U.S. than elsewhere. “You made more money for this drug here in the U.S. than in every other country combined,” Maloney said in response to comments by former Celgene CEO Mark Alles.

According to a report by the staff of the panel, Celgene more than tripled the original price of Revlimid to $719 per pill. The company raised the cost of the drug 22 times after it was authorized to treat the blood cancer multiple myeloma in 2005, the staff reported. Executives from Celgene, Bristol-Myers Squibb, and Teva Pharmaceutical Industries testified yesterday:

  • Celgene: Alles said Celgene’s pricing decisions were “guided by a set of long-held principles that reflect our commitment to patient access, the value of a medicine to patients and the health-care system.” The panel’s report found that over half of the formula used to award executive bonuses is dependent on meeting earnings and revenue targets. Some years, it says, those targets would not have been met without Revlimid price increases.
  • Bristol Myers: Giovanni Caforio, chief executive of Bristol Myers, which now owns Celgene, said that “Revlimid’s patients should have access regardless of ability to pay.” Caforio added his company would support changing the law to allow Medicare beneficiaries to take co-pay assistance and capping out-of-pocket costs for beneficiaries.
  • Teva: The hearing also focused on Teva’s multiple sclerosis medicine Copaxone. At $7,114, the price of a monthly course of Teva’s original Copaxone is now almost 10 times as much as when it came to market in 1997, according the committee report. CEO Kare Schultz said he couldn’t speak on price bumps before he joined in 2017, but said Teva hasn’t raised prices since he joined.

In an early indicator of the partisan split that characterized lines of questioning during the hearing, Maloney also called for legislation to be passed by the Senate and signed by President Donald Trump that would let Medicare bargain with drugmakers on pricing.

Democrats criticized Trump’s record on drug pricing and hammered executives who spoke at the hearing about their companies’ pricing practices. Republicans defended the president and said they worried legislation forcing price changes could imperil the development of innovative new medications. Read more from Anna Edney and Emma Court.

  • The committee holds its second day of hearings with top pharmaceutical representatives today with executives from Amgen, Novartis, and Mallinckrodt Pharmaceuticals. Read more from Alex Ruoff and Brandon Lee.

Senate Trades Obamacare Messaging Measures

Republicans and Democrats in the Senate are trading messaging votes this week, with members of both sides saying the other won’t compromise around Obamacare.

Republican leaders in the Senate held a vote yesterday on legislation first introduced by Sen. Thom Tillis (R-N.C.) that looks to guarantee Americans with serious health conditions can obtain health insurance even if the Affordable Care Act is overturned by a court. Democrats oppose that measure because it doesn’t include other ACA protections, such as prohibitions on lifetime limits.

The Senate voted to reject that motion 47-47 with Republican Sens. Mike Lee (Utah), Ted Cruz (Texas), and Rand Paul (Ky.) joining Democrats to vote to table it as an amendment to an unrelated measure (S. 178).

Senate Minority Leader Chuck Schumer (D-N.Y.) is trying to force a vote today on his bill aimed at protecting the ACA from a legal challenge. Schumer’s bill (S. 4653), on the chamber’s schedule today, would prohibit the Department of Justice from advocating against any part of the ACA in court, including in the case before the Supreme Court on Nov. 10, a week after Election Day, Alex Ruoff reports.

The Coronavirus Pandemic

Mnuchin, Pelosi Try to Forge Stimulus Deal With Time Running Out: U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D-Calif.) plan to resume discussions Thursday on a new pandemic relief package, racing against the clock to resolve their differences on another round of coronavirus stimulus. Mnuchin and Pelosi held their first in-person talks since August yesterday, yet fell short of reaching an agreement that would bridge the gaps between the administration and Democrats on further aid for the U.S. economy. Both sides face increased pressure to act as more companies announce job cuts, including airlines that had received help under earlier rounds of federal support.

House leaders abruptly postponed a planned Wednesday vote on a $2.2 trillion Democrat-only stimulus bill that Pelosi had described as a “proffer” in negotiations with the White House. Mnuchin offered Pelosi a maximum of $1.6 trillion, according to people familiar with the proposal. That would include $400 a week in additional unemployment insurance, less than the $600 the Democrats want, the people said, but more than the $300 the White House put forward earlier. The package would also provide $250 billion in assistance to state and local governments, $100 billion than a previous White House offer, but not as much as Democrats say is needed. Read more from Erik Wasson and Billy House.

Clyburn Cites ‘Misleading’ School Guidance: House Select Coronavirus Crisis Chairman James Clyburn (D-S.C.) sent a letter to HHS Secretary Alex Azar , Vice President Mike Pence, and CDC Director Robert Redfield, “calling on the administration to immediately revise CDC guidance on reopening schools during the coronavirus pandemic to accurately reflect the science,” according to a statement. Read the letter here.

Study Says Malaria Drug Won’t Prevent Covid: A dose of hydroxychloroquine every day won’t prevent a coronavirus infection, according to a study published in JAMA Internal Medicine. University of Pennsylvania researchers said that their paper marks the first published clinical trial to see if the anti-malaria drug, often touted by Trump, will prevent Covid-19. About 125 physicians, nurses, emergency technicians, and other front line workers took hydroxychloroquine or a placebo every day for two months. Read more from Jeannie Baumann.

Medicaid Saw 4 Million More Enrollees During Pandemic: Nearly 4 million people joined state Medicaid programs during the first four months of the Covid-19 pandemic, the Centers for Medicare and Medicaid Services said yesterday. The enrollment jump represents a 6.2% increase in the Medicaid rolls between March and June, the CMS said. Read more from Christopher Brown.

NIH Funding Covid Research for Underserved: The NIH poured $234 million into programs to assess Covid testing patterns and disease progression among vulnerable populations like minorities, the elderly, the homeless, and pregnant women, the agency said yesterday. The funds come from the National Institutes of Health’s RADx-UP program, part of the government’s effort to improve data reporting, testing, and general knowledge about Covid. Jacquie Lee has more.

Useless Covid Data Drive Reckoning on Trials: The coronavirus vaccine race proves researchers need to step off campus more to meet patients in doctors’ offices and health clinics to improve clinical trials, and the FDA’s drug chief said that requires “very serious soul searching.” The rush to make a vaccine has left the FDA swimming in useless data; one FDA analysis found just 6% of all trials are yielding results the agency deems actionable, the agency’s Janet Woodcock said. Read more from Jeannie Baumann.

Air Travel Virus Measure Passes Senate: The Senate yesterday by unanimous consent passed an amended version of S. 3681, which directs the departments of Transportation, Homeland Security and Health and Human Services to form an air travel task force to develop recommended requirements and guidelines to address public health and security during the Covid-19 pandemic.

More Headlines:

What Else to Know

Democrats Seek Answers on Drug Cards: Reps. Bill Pascrell (D-N.J.) and Lloyd Doggett (D-Texas), chairmen of the House Ways and Means Oversight and Health subcommittees, urged Azar to explain a Trump administration “scheme to send prescription drug discount cards to seniors before the election, paid for by taxpayers from a nonexistent government program,” according to a statement. Read the letter here.

Most Without Insurance Eligible for Subsidy: Two-thirds of people who were without health insurance last year were eligible for subsidized health insurance coverage, according to a report from the Congressional Budget Office. Although most of the almost 30 million people in the U.S. without coverage in 2019 were eligible for subsidized coverage either through their employer or Obamacare’s marketplaces, many still found insurance premiums unaffordable, the CBO said. The group estimates a third of the uninsured would have to pay more than 10% of their income to obtain coverage. Read the report here.

Hundreds Accused of Making $6 Billion in False Health Claims: Nearly 350 defendants, including 100 doctors, nurses, and other medical professionals, face charges they submitted more than $6 billion in false and fraudulent claims to federal health-care programs and private insurers, the Justice Department said yesterday.

The department called the nationwide enforcement operation the largest health-care fraud and opioid action in its history, involving multiple federal agencies including the Department of Health and Human Services. The largest part of the operation involved $4.5 billion in allegedly fraudulent claims related to telemedicine, the DOJ said in a statement. Read more from Cheryl Bolen.

Stopgap Clears Senate: The Senate last night cleared by a vote of 84-10 a stopgap measure (H.R. 8337) to keep the government funded through Dec. 11. With the temporary spending bill finished, lawmakers will try to complete work on the 12 annual appropriations bills for fiscal 2021 in the post-election lame-duck session in November and December. Read more from Erik Wasson.

The bill includes $8 billion for child and family nutrition programs, as well as funds to replenish the Commodity Credit Corporation. For more on the bill, see the BGOV Bill Summary by Naoreen Chowdhury, Michael Smallberg, Adam M. Taylor and Brittney Washington.

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To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Alex Ruoff in Washington at aruoff@bgov.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Giuseppe Macri at gmacri@bgov.com; Michaela Ross at mross@bgov.com

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