Celgene, Teva execs grilled over price hikes
A US House of Representatives committee has accused Teva and Celgene of imposing unjustified price hikes on blockbuster drugs Copaxone and Revlimid.
“While the current trajectory of drug prices rewards corporate executives handsomely, it is not sustainable for the American taxpayers or American families,” said Democratic representative Carolyn Maloney, chair of the House Oversight and Reform Committee.
According to new reports published by the committee, Teva has raised the price of multiple sclerosis drug Copaxone 27 times and now charges almost $70,000 for an annual course, compared to less than $10,000 in 1997.
A monthly course of Celgene’s Revlimid, meanwhile, is priced at $16,023, more than treble the price in 2005.
Executives from the two companies are testifying before the committee this week.
The committee reviewed internal Celgene documents which it said showed that these price hikes were “driven almost exclusively by the need to meet company revenue targets and shareholder earnings goals”.
The reports also highlighted the salaries of top executives at the two drug companies, with price increases “leading directly to higher bonuses” for those running the firms.
“From 2012 to 2017—Teva’s peak years for US Copaxone revenue—the company paid its top executives more than $190 million. Lower-level employees were aware of the direct link between their compensation and Copaxone’s price and revenue,” the committee found.
“The Committee’s investigation demonstrates that drug companies are taking full advantage of the federal law that currently prohibits Medicare from negotiating directly with drug companies to lower prices. The drug companies are bringing in tens of billions of dollars in revenues, making astronomical profits, and rewarding their executives with lavish compensation packages—all without any apparent limit on what they can charge,” Maloney wrote.
The committee also hit out at Teva for using strategies to block generic competition for Copaxone from coming to market.
“First, Teva contracted with speciality pharmacies and pharmacy benefit managers to limit generic substitution. Second, Teva lobbied doctors to write prescriptions for Copaxone that prohibited generic substitution. Third, Teva used its patient programs to convince patients to remain on the more expensive brand name version of the drug,” the report said.
Celgene also faces accusations from the committee of using “anti-competitive tactics” to limit generic competition, which the committee said would cost the US health care system more than $45 billion through 2025.
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