The House Oversight Committee released two major reports Wednesday that expose the internal strategies used by drug makers Celgene and Teva to repeatedly jack up the price of their blockbuster drugs revlimid and copaxone.
The reports, which are the culmination of an 18-month investigation based on internal company documents, outline in vivid detail how both drug makers raised their prices at will and plotted to keep lower-cost alternatives off the market. The CEOs of Teva, which markets copaxone, and Celgene, which marketed revlimid until late 2019, will testify before the Oversight Committee this morning.
The CEO of Bristol Myers Squibb, which acquired Celgene in Nov. 2019, will also testify, although the majority of the Oversight Committee’s report focuses on the behavior of Celgene prior to the acquisition. The reports detail a pattern of mercenary price hikes, particularly from Celgene, many of which were driven primarily by a desire to hit revenue goals for shareholders. In one case, in March 2014, Celgene CEO Mark Alles, then an executive vice president for the company, demanded that the company immediately jack up the price of revlimid by 4% because the company had not met its first quarter sales goals. Alles was explicit about the strategy: An internal slide presented to the company’s drug pricing advisory board showed that the increase would yield $24 million in new net sales. “Can we take the increase tonight so that it impacts sales beginning tomorrow?” Alles asked in an internal email. [Emphasis added]Investigation shows Celgene, Teva plotted to keep drug prices high