October 01, 2020

House Committee continues drug pricing probe; hearing to focus in surge in cancer-drug price increases and ties to million-dollar bonuses

On September 30, the House Committee on Oversight and Reform will have started a two-day hearing where executives from Bristol Meyers Squibb, Celgene Corporation and Teva Pharmaceutical Industries are expected to testify on their drug pricing schemes. The earing is expected to focus on Revlimid, Celgene’s cancer treatment and the second-best seller drug in the United States, which has undergone 22 price increases and tripled in price since 2005 to $719 per pill. While the pharmaceutical industry’s messaging has attempted to portray these gains as necessary measures to fund research and development, the committee report shows executive communications that tie price increases to revenue projections as well as bonuses. In particular, the Committee has found that the formula utilized to award executive bonuses directly depended upon attaining earning and revenue targets. In many instances, targets would not have been met and executive bonuses would not have been disbursed without Revlimid’s price increases. Bristol Myers Squibb acquired Revlimid in November 2019, and it is now priced at $763 per pill.

The current administration has attempted to address this issue, and earlier this month President Trump signed an executive order aimed at tying prices paid by Medicare to drug pricing in countries that negotiate prices. Currently Medicare is not able to negotiate drug prices.