Katie Porter and her whiteboard went viral in 2019 after trying to get billionaire bank CEO Jamie Dimon to explain why he couldn't pay his employees a liveable wage when he made $31 million a year. She also used her whiteboard treatment to win free Covid-19 testing for all Americans. In a short time, Porter, the freshman congresswoman has become famous. How? The whiteboard she used to do maths that earned itself a nickname: “the mighty whiteboard of truth”.
More recently, Porter took out her whiteboard again confronting a pharmaceutical executive over his financial compensation. This was during a hearing on runaway drug prices. The cost for a cancer drug Revlimid was $215 a pill in 2005 which tripled to $765 a pill today.
She wrote down a figure “$13 million” on her whiteboard and asked Mark Alles, the former CEO of the pharmaceutical company Celgene, if he knew what the number was. That multimillion figure was Alles’ compensation in 2017, and was 200 times the average income in the U.S.
"So, to recap here, the drug didn't get any better, the cancer patients didn't get any better — you just got better at making money," Porter said.
Celgene was bought by Bristol Myers Squibb in late 2019, in part because of the profits from Revlimid. As part of the deal, Alles — who left the company a month after the deal was finalized — was paid nearly $40 million in cash and stock, according to a filing with the Securities and Exchange Commission.
Much of the money that Celgene spent on Revlimid after 2005 was on getting it approved for treating additional types of cancer. Expanding the company's potential market for the drug, potentially boosting profits, didn't justify the company's sharp price increases, she said.
"To put that in perspective, you hiked the price by $500 per pill when the average Orange County senior only has $528 left in their bank account after they've paid their basic monthly expenses," Porter said. "The average Orange County senior can't even afford one pill."
In early March 2014, Alles, who was still an executive vice president during that time, requested a 4% price hike “not later than the end of next week” to improve their Q1 performance and then another increase Sept. 1 of that year. “I have to consider every legitimate opportunity available to us to improve our Q1 performance,” he wrote. Alles later became Celgene’s CEO.
Days later, Revlimid price increases were approved by the board, touting a potential revenue boost of $24.8 million from the move. Ahead of that meeting, he wrote to his team asking whether Celgene could “take the increase tonight so that it impacts sales beginning tomorrow.” Celgene then hiked the price that same night.
For years, the pharma industry’s defense of price hikes has centered on high R&D costs, risky investments and rebates to middlemen. But the committee found those reasons didn't apply in Revlimid's case. Celgene appears to have relied heavily on taxpayer-funded academic research to develop Revlimid.
According to the House Committee on Oversight and Government Reform, other findings of the Celgene probe is that the company’s executive payment system incentivizes price hikes and that the company targeted the U.S. for high prices because the federal government is prohibited from negotiating prices.
Further, the company restricted competition by using
the U.S. patent system to its advantage and by “abusing” a government drug
safety program. The company’s “anticompetitive tactics” are believed to cost
the U.S. healthcare system more than $45 billion through 2025. That’s why
generic drugs are a fraction of pharma drugs. And which country produces the
most generic drugs? India, exporting $20 billion worth in 2019. And the world’s
leading generic drug maker is… Teva from Israel.
Reference:
1. Rep. Katie Porter gives pharma executive
the "whiteboard" treatment, 1 Oct 2020, CBS News
2. Eric Sagonowsky, Celgene repeatedly
raised Revlimid's price to hit aggressive sales targets, congressional probe
finds, Fierce Pharma
3. Poppy Noor, Number-cruncher: the
devastating power of Katie Porter's whiteboard, 1 Oct 2020, The Guradian
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