Democrats slam Teva, Celgene execs for large price hikes

Congress at night
House Democrats held a hearing Wednesday that examined major price hikes for drug products from Teva and Celgene. (Getty Images)

House Democrats tore into several pharmaceutical executives for continuing to raise prices for certain drugs even as they allocated limited funding to research and development.

The House Committee on Oversight and Government Reform held the first in a two-day hearing Wednesday on unsustainable drug prices. The hearing follows a report released by the committee that found drugmaker Celgene, now part of Bristol Myers Squibb, raised prices for cancer drug Revlimid multiples times over the years to meet sales targets, and that Teva Pharmaceuticals raised prices for multiple sclerosis drug Copaxone despite low R&D costs.

Democrats on the committee took on a major defense lobbed by pharmaceutical companies in response to questions about high prices. Drugmakers often argue that the prices are needed to justify the high price tag of research and development.

“The documents we have reviewed show that drug companies continue to raise prices—while raking in record profits—and continue to put their products further out of reach for patients in need,” said Rep. Carolyn Maloney, D-New York, the committee’s chairwoman, in her opening statement.

Democrats slammed Teva for raising the price of Copaxone 27 times since its initial approval in 2014.

“Your company has made more than $34 billion from Copaxone, but it reported to the committee it has spent 2% of that on R&D expenditures for Copaxone patients,” Rep. Jamie Raskin, D-Maryland, told current Teva CEO Kare Schultz. “Teva could not report to the committee a single R&D expenditure since 2015 and yet [you had] multiple price increases since 2015.”

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Schultz responded that he came on board as the CEO in late 2017 and refused to answer Raskin’s question to justify the numerous hikes.

“I was brought in because company came into financial trouble for number of reasons,” said Schultz, adding that the patent expiration of Copaxone contributed to the financial trouble.

Maloney asked former Celgene CEO Mark Alles why the price for Revlimid was so much higher than in other countries. The committee’s report found that the company targeted price hikes in the U.S. because the country is banned from negotiating for lower prices, as opposed to other countries that feature a single-payer healthcare system.

“It speaks to that the U.S. is the world’s leader in medical innovation, and the free-market price opportunity in the U.S. continues to drive much of the medical innovation in the world,” Alles responded on why it targeted hikes in the U.S. “It describes, not as well I would like, fundamental differences around the world.”

Republicans on the committee highlighted medical innovation made by the companies, including the need to develop new products to combat COVID-19. Rep. Virginia Foxx, R-North Carolina, asked the executives if it is less likely that the U.S. would be the first to get a COVID-19 vaccine if it had adopted the same drug price controls as countries with a single-payer system.

Schultz responded that it would be less likely because the “financial incentives would be less.”

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He added there is a “clear link between financial incentives and the motivation to do research and development in a certain geography.”

Republicans also slammed H.R. 3, a House bill that would give Medicare the power to negotiate drug prices and demand those same prices be applied to non-government commercial and individual plans. The bill passed the House last year but stalled in the Republican-controlled Senate.

Republicans said the bill would lead to fewer products being developed, pointing to an analysis from nonpartisan legislative scorekeeper the Congressional Budget Office. The analysis also found the bill would produce major cost savings for Medicare.

“Which one of these diseases with a possible cure that could not come to the market is unsatisfactory,” said Rep. Jody Hice, R-Georgia. “We cannot go down that path of eliminating any potential cure for these diseases.”