by David Armstrong
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The pain jolted me awake. It was barely dawn, a misty February morning in 2023. My side felt as if I’d been stabbed.
I had been dealing with pain for weeks — a bothersome ache that felt like a bad runner’s cramp. But now it was so intense I had to brace myself against the wall to stand up.
A few hours after arriving at the emergency room, I heard my name. A doctor asked me to follow him to a private area, where he told me a scan had uncovered something “concerning.”
There were lesions, areas of bone destruction, on top of both of my hip bones and on my sternum. These were hallmarks of multiple myeloma. “Cancer,” he said.
Multiple myeloma is a blood cancer that ravages bone, leaving distinctive holes in its wake. Subsequent scans showed “innumerable lesions” from my neck to my feet as well as two broken ribs and a compression fracture in my spine. There is no cure.
I walked out of the ER in search of fresh air. I sat on a metal bench and did what many patients do. I turned to Google. The first link was a medical review stating that the average lifespan of a newly diagnosed patient was three to five years. My stomach churned.
I soon learned that information was outdated. Most patients today live much longer, in large part due to a drug with a horrific past. It was a doctor at the hospital who first told me I would likely take a thalidomide drug as part of my treatment.
That couldn’t be possible, I told him.
I knew the story of thalidomide, or at least I thought I did. It represented one of the darkest chapters in the history of modern medicine, having caused thousands of severe birth defects after it was given to pregnant women in the 1950s and 1960s. The drug was banned in most of the world, and the scandal gave rise to the modern-day U.S. Food and Drug Administration.
It turns out the drug once relegated to a pharmaceutical graveyard had new life as a cancer fighter.
That drug I take is called Revlimid. It is a derivative of thalidomide, a slightly tweaked version of the parent compound.
Revlimid is now one of the bestselling pharmaceutical products of all time, with total sales of more than $100 billion. It has extended tens of thousands of lives — including my own.
But Revlimid is also, I soon learned, extraordinarily expensive, costing nearly $1,000 for each daily pill. (Although, I later discovered, a capsule costs just 25 cents to make.)
That steep tab has put the drug’s lifesaving potential out of reach for some cancer patients, who have been forced into debt or simply stopped taking the drug. The price also helps fuel our ballooning insurance premiums.
For decades, I’ve reported on outrageous health care costs in the U.S. and the burden they place on patients. I’ve revealed the tactics used by drug companies to drive sales and keep the price of their products high.
Even with my experience, the cost of Revlimid stood out. When I started taking the drug, I’d look at the smooth, cylindrical capsule in my hand and consider the fact I was about to swallow something that costs about the same as a new iPhone. A month’s supply, which arrives in an ordinary, orange-tinged plastic bottle, is the same price as a new Nissan Versa.
I wanted to know how this drug came to cost so much — and why the price keeps going up. The price of Revlimid has been hiked 26 times since it launched. Some of what happened was reported at the time. But no one has pieced together the full account of what the drugmaker Celgene did, how federal regulators failed to rein it in and what the story reveals about unrestrained drug pricing in America.
What I discovered astonished even me.
My journey started with an indefatigable New York City lawyer on a quest to give her dying husband a chance.
Tiny and Terrifying
Beth Wolmer’s story begins on a moon-splashed beach in the Cayman Islands in the winter of 1995. She and her husband, Ira, were holding hands as they walked in the sand, enjoying a rare break from a hectic life as parents to a 1-year-old daughter and demanding jobs as 30-something professionals in New York City.
They had met through friends and clicked from the start. On Sunday mornings, they sat together for hours, sharing sections of the newspaper and eating bagels. They planned trips to Europe and outings to the Metropolitan Museum of Art.
Ira was an interventional cardiologist who followed his father into medicine. Beth was a lawyer at the high-powered firm Skadden Arps.
“We had a great life,” Beth told me. “I specifically remember coming home on the bus and thinking: ‘My life is just perfect, perfect. I’m not going to change a thing.’”
As they walked that night in the Caribbean, Ira felt a sharp pain in his cheekbone. The pain flared several more times during the trip, becoming so intense that it brought tears to his eyes.
When he got home, Ira made an appointment to figure out what was wrong. Imaging tests revealed multiple myeloma. The prognosis was grim. The couple was told Ira had two years to live.
Specialists recommended treatments that would only provide a brief reprieve. The couple searched for someone who could offer something more. That’s when they found Dr. Bart Barlogie in Little Rock, Arkansas.
I’ve never been more scared of a spouse of a patient than I was of her.
—Dr. David Siegel, who treated Ira Wolmer
Barlogie had been recruited to the University of Arkansas for Medical Sciences from the more prestigious MD Anderson Cancer Center in Houston. In Texas, Barlogie had been frustrated by a medical culture that he viewed as too timid in its approach to multiple myeloma.
He remembers working on a Sunday when a newly diagnosed patient was admitted to the hospital. With few options, Barlogie decided to put the patient on a taxing, four-drug chemotherapy cocktail used for lymphoma patients. It didn’t work. The patient died from a sepsis infection, a known complication of the treatment.
The attending physician later admonished him, Barlogie said, saying, “Bart, we have to learn to treat myeloma gently.” Barlogie said he thought to himself, “Fuck you.”
In Arkansas, Barlogie was in charge. He quickly developed a reputation as a practitioner willing to try anything to fight the fatal disease. Patients from around the world — including the actor Roy Scheider from the movie “Jaws” — flocked to his clinic.
Beth and Ira heard Barlogie before they saw him. The cowboy boots he’d taken to donning since his time in Houston clacked down the linoleum hallway floors. A short, slight man, Barlogie had a booming voice with a German accent. He wore leather jackets and round, red-framed glasses on his bald head.
When he strode into the exam room, he hugged Beth and Ira and told them they had come to the right place.
Now retired, Barlogie recalls being struck by Beth’s intensity. He said she told him “you must do something” to help Ira.
I met Barlogie at his home in Little Rock. We sat in his office, which is filled with photos of the red Ducati motorcycle he used to ride to work. An old license plate with the letters “MMCURED” sat on a shelf, reflecting his goal to find a cure for multiple myeloma.
When Beth and Ira found him, Barlogie told me, he had been having some success with a novel approach that put patients through two stem cell transplants a few months apart, which he called a tandem stem cell transplant. With a transplant, a patient is bombarded with high-dose chemotherapy to kill the cancerous plasma cells. The patient is then infused with healthy stem cells that travel to the bone marrow.
The intense chemotherapy can be grueling and poses a small risk of death.
Ira underwent three transplants. Each time, he relapsed. By the fall of 1997, after two years of treatment, Ira’s thick black hair was gone. He was losing weight. Then he had a stroke. His kidneys failed and required dialysis. He developed pneumonia and had to be intubated.
Beth was determined to keep him alive long enough for their toddler daughter to remember him. With a photograph of Ira smiling with their baby as motivation, she applied her lawyer’s tenacity to the case. She pored over medical journals and peppered oncologists with questions about why what they were trying wasn’t working or quizzing them about a promising study. When doctors told her there was nothing more they could do for her husband, she refused to accept it.
“She is a tiny person, but she is terrifying,” said Dr. David Siegel, part of the team that treated Ira in Arkansas. “I’ve never been more scared of a spouse of a patient than I was of her.” He meant it as a compliment.
By late fall in 1997, Ira was dying and Beth was desperate.
A researcher told her about the work of Dr. Judah Folkman, a surgeon and researcher at Boston Children’s Hospital. Folkman believed the growth of cancerous tumors could be stunted by starving them of a supply of new blood vessels.
“Thank You, God”
Folkman was a workaholic who, when he wasn’t in the operating room or the research lab, was traveling across the world to promote his novel theory of how to attack cancer. Peers had ridiculed his idea since he first proposed it in the 1970s. The prevailing belief at the time was that tumors didn’t need a new blood supply to grow.
A young researcher in his lab, an ophthalmologist named Robert D’Amato, was at work on the top question Folkman had posed. Could they come up with a drug, in pill form, that blocks the growth of new blood vessels?
Folkman has since died, but it wasn’t difficult for me to track down D’Amato. He still works at Boston Children’s Hospital, where he has his own lab and holds the Judah Folkman Chair in Surgery. Now in his early 60s, D’Amato has a youthful energy and speaks in a rapid, matter-of-fact clip.
D’Amato told me that he had set out to find existing drugs that block blood vessel growth. He started by thinking of his own body and side effects caused by certain drugs. A drug that causes hair loss might be the result of the blood supply to hair follicles being shut off, for example. But this exercise wasn’t producing any viable candidates.
After giving it some thought, D’Amato realized he had myopically narrowed his search. What about a woman’s body? There were drugs that stopped menstrual cycles. Then there were drugs that caused birth defects in pregnant women. In both of those cases, it was possible the drug was inhibiting blood vessel growth. He came up with a list of 10 drugs. At the top of the list was one with a devastating history: thalidomide.
Beginning in the 1950s, pregnant women in Europe, Australia and other countries were frequently prescribed thalidomide as a treatment for morning sickness and to help them sleep. The drug was thought to be harmless and in Germany was sold over the counter. An advertisement for thalidomide in the United Kingdom claimed it could “be given with complete safety to pregnant women and nursing mothers without adverse effect on mother or child.”
They were wrong.
The drug was eventually linked to birth defects in more than 10,000 babies. Those babies were born without limbs or with shortened limbs, malformed hands, disfigured faces and damage to internal organs. Nearly half died within months of being born.
By the early 1960s, the drug was widely banned, considered a shameful chapter in the history of pharmaceuticals. It was never sold in the U.S. thanks to the unwavering objections of a resolute reviewer at the FDA named Frances Oldham Kelsey. The close call, however, prompted Congress to require more rigorous safety and efficacy data from drug manufacturers and empower the FDA to monitor the industry more closely.
D’Amato theorized that the thalidomide birth defects were the result of the drug stopping the growth of new blood vessels that the fetus needs to develop. He walked me through his experiments: He cracked a fertilized chicken egg on a glass petri dish and placed thalidomide on the surface. After two days, if no blood vessels grow on the embryo, a halo should appear around the thalidomide sample, showing the drug worked. It didn’t.
Folkman told D’Amato to move on. But D’Amato couldn’t shake the disappointing results. He did more research and realized thalidomide needs to first be broken down in the body to have an effect on humans. He purchased metabolites of thalidomide, repeated the test and this time found a halo around the sample.
He kept experimenting and in 1994 published a paper finding that thalidomide had “clear implications” for treating tumors.
So when Beth called three years later, Folkman told her they should try it.
Barlogie told me he didn’t think it would work. Beth said she had to convince him to try it.
Barlogie agreed to test it on Ira and two other patients who were out of treatment options in early December.
I wanted him alive forever.
—Beth Wolmer
The drug did not work for Ira. Beth said just before he died, Ira sat up in bed, kissed her and smiled. It was March 10, 1998. He was 38.
After years of frantically searching for anything that would help, the finality of his death was difficult to accept, she said. “I wanted him alive forever.”
It is unclear what happened with the second patient. The third patient, however, started to get better.
His name was Jimmy. Little more is known about him except that he was a patient of another oncologist at the hospital, Dr. Seema Singhal, and near death before he started the drug. “I told him it might work, but at the very least it would help him sleep,” Singhal said. Shortly after Jimmy took his first dose of thalidomide, Singhal left for a vacation.
Dr. Bart Barlogie and Dr. Seema Singhal
(Painting by James Lee Chiahan for ProPublica)
When she returned two weeks later, her mailbox was full of lab results for Jimmy. He was still alive. She sat down to double-check the results, which showed declining amounts of a cancer marker. “For 30 minutes, I was the only person in the world who knew this worked,” she said.
Singhal walked down to Barlogie’s office to give him the news. “He took me by the hand, opened a window and shouted, ‘Thank you, God,’” she said.
“Violent Arguments”
Word of Jimmy’s stunning recovery in Arkansas quickly made its way to the offices of Celgene Corp., located in a small corporate park in a rural patch of northern New Jersey.
The company had just wrapped up a brutal year-end accounting, which showed losses of $27 million on revenue of just $1.1 million. Money was so tight that executives engaged in what one of them called “violent arguments” over whether to charge employees for coffee.
Celgene had acquired the rights to thalidomide patents held by researchers at Rockefeller University in 1992. The company, which was new to pharmaceuticals, planned to use the experience of obtaining FDA approval for thalidomide to develop other drugs.
“It wasn’t meant to be a blockbuster,” said Sol Barer, who started at the company in 1987 and later became CEO.
When Celgene announced plans to develop the disgraced drug for new uses, the only analyst following the company on Wall Street dropped coverage and told Celgene officials they didn’t know what they were doing.
The company thought the largest market would be as a treatment for AIDS patients experiencing dangerous weight loss. To win approval of the drug, however, Celgene selected a use that was already in practice in parts of the world for a small group of patients.
In July 1998, the FDA approved thalidomide for the treatment of a painful complication of leprosy. It was a momentous decision, coming just a few decades after the drug caused so much harm.
The market for leprosy was tiny, but what happened with Jimmy in Arkansas changed everything for the company.
Blocked Exits
The Arkansas doctors had been busy since first testing thalidomide on Ira Wolmer, Jimmy and the other patient. They quickly got approval to conduct a larger experiment funded by a grant from the U.S. National Institutes of Health. Now, in December 1998, they were ready to share their initial findings at the annual meeting of the American Society of Hematology.
It had been three decades since a new therapy for multiple myeloma had been approved, and there was a buzz among the oncologists gathered in Miami Beach for the conference. So many doctors crowded into the room for the presentation that the fire marshal had to intervene several times to clear exit ways. Word had already spread among multiple myeloma specialists about Jimmy. Now, the assembled doctors wanted to know whether it had been a fluke or a discovery that would fundamentally change how they practiced.
Singhal was tasked with presenting the data. It was a big stage for the 32-year-old doctor, who had only been practicing in the U.S. for two years.
It completely changed the treatment landscape.
—Dr. Seema Singhal
The 89 patients in the study were high-risk cases who had undergone prior treatment. They were patients who, like Ira, had run out of options. Now, after thalidomide treatment, one-third had declines in myeloma activity.
Those were stunning numbers, unlike anything seen before in the treatment of multiple myeloma. When Singhal finished, the room erupted in applause.
“It completely changed the treatment landscape,” she said.
I wasn’t able to track down Jimmy, but I have a sense of how he might have felt when he realized the treatment was working.
After my initial emergency room visit, it took time to confirm my diagnosis and do some additional testing. While I waited, the pain worsened. Painkillers barely made a dent. All I could picture was this cancer eating away at my bones, doing more damage every day.
David Armstrong
(Painting by James Lee Chiahan for ProPublica)
Some patients wait months for care. I was lucky enough to meet my oncologist within weeks. He had a script for Revlimid ready to go, part of a regimen of four drugs I would take as standard induction therapy, and I was able to start it within days.
The initial dose of Revlimid cost $18,255 for a month’s supply, and my insurance covered the cost.
Within a month, my blood tests showed a massive drop in a key cancer indicator.
My pain gradually subsided too. By the end of April, I wrote in my journal that the pain was a 3 or 4 instead of the usual 9 or 10. “It doesn’t hurt to get out of bed anymore,” I wrote.
A Piggy Bank
The discovery in Arkansas made thalidomide, which Celgene sold as Thalomid, an instant hit.
As a result, Celgene’s revenue increased nearly sevenfold to $26.2 million in the year after the Miami presentation. It sold its thalidomide pills for $7.50 each.
From those modest beginnings, Celgene took a slightly altered version of that pill and turned it into one of the bestselling and most expensive prescription drugs in history. Celgene’s success with Thalomid was the result of remarkable good fortune, a case where the heavy lifting of discovery and initial testing had already been done, by Beth Wolmer, D’Amato, Barlogie, Singhal and others.
The development of the drug that would become Revlimid took me deep into the confounding, sharp-elbowed world of drug patents, which ostensibly protect drugmakers, allowing them to recoup the massive investments they made in developing a new product. Celgene drew on patent law, a drug safety system and even patient assistance programs to guard the exclusivity of its prized drug and the massive revenue it generated.
Those tactics, detailed in reams of court filings, allowed Celgene to treat Revlimid like a piggy bank, tapping it whenever it wanted.
There was a common internal theme at Celgene that cancer patients were willing to pay almost any amount Celgene charged.
—David Schmidt, a former Celgene executive
Amid the early success of Thalomid, Celgene identified two potential threats: One was obvious. Thalidomide caused birth defects, a looming risk that could result in it being pulled from the market.
The other was that Celgene held limited patents on the drug. Patents are exclusive legal rights to inventions, and researchers file them on nearly every aspect of drug development as soon as they can, locking up everything from specific sets of ingredients to the way the drug is used and administered. The more robust patents a company has, the longer it can potentially ward off competitors.
Thalidomide was an old drug and Celgene’s patents did not cover the active ingredient, leaving it open to competition. The patents it did have, covering items such as the optimal dosages and its use in treating particular diseases, were considered weaker and open to a court challenge. If Celgene could create a new version of thalidomide — ideally one that didn’t cause birth defects — the company could seek more and stronger patents that would extend beyond those of the original drug.
So researchers at Celgene tested analogs of thalidomide, which are drugs that have a similar effect but are different from the parent compound in minor ways, such as having one less oxygen atom. The analogs are also more potent than the original, meaning they can achieve a similar effect at lower doses.
Celgene was not alone in its efforts. D’Amato was also studying thalidomide analogs and filing patents on their use, which he and Boston Children’s Hospital licensed to a Celgene competitor, EntreMed Inc.
With dueling patents, the companies sued each other in 2002.
Celgene was newly flush with cash from rising sales of thalidomide. EntreMed, on the other hand, was burning through money as it focused most of its resources on developing other drugs discovered in Folkman’s lab.
In December of 2002, the companies settled.
Celgene agreed to pay Boston Children’s Hospital royalties from future sales of Revlimid. In exchange, the hospital and D’Amato licensed their patents of thalidomide analogs to Celgene. Celgene also agreed to pay EntreMed $27 million.
For Celgene, the fight with EntreMed was a valuable experience. It learned that competition can be neutralized.
The Rise of Revlimid
Celgene had kept the price of Thalomid low when it was initially intended for AIDS patients, CEO John Jackson told investors in 2004, as the company “didn’t want huge numbers of people demonstrating in front” of its office.
That wasn’t a problem with cancer patients. There was “plenty of room for very substantial increases” in the price of the drug now, Jackson told investors.
It is time for us to take Jimbo to the wood shed.
—A senior Celgene official discussing a doctor critical of Revlimid
Just two days earlier, Celgene had hiked the price of Thalomid to $47 a pill.
“There was a common internal theme at Celgene that cancer patients were willing to pay almost any amount Celgene charged,” wrote David Schmidt, a former national account manager at the company, in a whistleblower lawsuit he filed after his employment was terminated in 2008. The lawsuit was voluntarily dismissed by Schmidt. (Jackson didn’t respond to requests for comment; Schmidt declined to talk to me.)
When Celgene launched Revlimid in December of 2005, it set the initial price at $55,000 a year, or $218 a pill, which was about double what analysts expected.
Seven months later, when the FDA approved the drug for multiple myeloma, the price jumped to $70,560 a year, or $280 a pill.
The Price of Revlimid Has Increased 26 Times Since FDA Approval
Each dot indicates a new manufacturer list price per pill.
(Source: AnalySource)
The cost to manufacture each Revlimid pill, meanwhile, was 25 cents. I found a deposition marked “highly confidential” in which a top Celgene executive testified that the cost started at a quarter and never changed.
Even on Wall Street, which cheered higher pricing, the initial cost of Revlimid prompted concern among analysts who tracked the company that such aggressive maneuvering would cause insurers to push back. In the U.S., that is one of the only real checks on the price of prescription drugs.
That fear turned out to be unfounded, and Celgene would repeatedly test the bounds of how high it could go.
At the same time, Celgene worked to mute any criticism of Revlimid.
In 2005, Celgene received reports that Los Angeles oncologist Dr. James Berenson was “bashing” Revlimid in presentations sponsored by patient groups.
In one email, a senior company official said, “it is time for us to take Jimbo to the wood shed.” The company discussed a range of options for dealing with the doctor, from taking legal action to arranging a sit-down with Celgene’s chief executive.
Ultimately, the company appears to have decided on a friendlier course of action. Berenson became a frequent paid speaker and consultant for the company, with payments totaling at least $333,000, according to Celgene disclosures. Berenson declined to comment.
He wasn’t the only doctor the company befriended. Payment records show that between 2013 and 2018, Celgene paid doctors $11 million for speaking engagements and consulting work related to Revlimid. At one point, Celgene rented a suite at the Houston Astros baseball stadium to throw a party for the entire multiple myeloma department at the MD Anderson Cancer Center, according to court testimony. The center said it was unable to verify any of those details.
They remind me of an octopus with many, many tentacles, and at the end of each tentacle is a wad of cash.
—David Mitchell, president of Patients For Affordable Drugs
Celgene went on to spread its largesse across the multiple myeloma world. It funded patient groups, sponsored medical meetings and contracted with prestigious academic medical centers.
“They remind me of an octopus with many, many tentacles, and at the end of each tentacle is a wad of cash,” said David Mitchell, a former Washington, D.C., communications executive who launched a nonprofit organization to fight for lower prices after he was diagnosed with multiple myeloma. “Everybody relies on the money.” Mitchell said his group, Patients For Affordable Drugs, does not accept donations from any entity that profits from the development or distribution of pharmaceuticals.
At the same time it showered doctors and patient groups with money, Celgene was shutting Beth Wolmer out. She told me that John Jackson, the CEO at the time, had promised her a paid board seat at the company as a way of compensating her for her role in the discovery before the company cut off communication.
Wolmer sued Celgene in federal court in 2009, seeking $300 million or more for alleged misappropriation of her idea and what she termed the “unjust enrichment” of Celgene.
Celgene said it never promised to compensate Wolmer. The company also suggested she greatly inflated her role in the discovery and, in any event, waited too long to take legal action.
In 2010, a judge granted Celgene’s motion for summary judgment in the case, agreeing that the statute of limitations had expired while at the same time expressing “admiration” for Wolmer’s “contribution to the struggle against this terrible disease.”
Ira and Beth Wolmer in the Cayman Islands
(Painting by James Lee Chiahan for ProPublica)
Wolmer has remarried and changed her name to Jacobson. She remains disappointed about the way she was treated by Celgene. “There was no ambiguity about who found the purpose of this drug, and I’m thrilled that it’s helping so many people,” she said. “Why they treated me that way? I don’t know.”
The Generic Threat
After the FDA approved Revlimid in late 2005, it also granted Celgene something else: seven years of market exclusivity because the drug treats a rare disease. In those seven years, Celgene raised the price of the drug nine times, increasing the price per pill by 82% to $397 in 2012.
The company also fended off challengers by claiming its patents protected the drug from competition until 2027.
But by 2010 generic makers were already working on copies of the drug, preparing to challenge those patents and enter the market earlier. A government analysis has found that generics generally lower the price of brand name drugs by an average of 85% after just one year.
Celgene was well aware of the danger generics posed and warned in a 2012 financial filing that their entry into the market could have a “material adverse effect” on its finances. At that point, Revlimid sales made up 70% of the company’s revenue.
Celgene needed another move.
The drug still posed a risk of birth defects like the parent compound. In approving the drug, the FDA had mandated a strict safety program to control its prescription and distribution.
Celgene realized early on that this could also be a tool to thwart competition. An internal company presentation at the time noted that the safety program could make it “more difficult for generic companies to access” thalidomide for testing.
Generic drug makers are required by the FDA to test their version against the brand name drug, so they need to buy small amounts of Revlimid from the company.
By 2012, at least six generic makers had requested to purchase Revlimid for testing. In every case, Celgene refused.
Federal regulators took notice. The FDA had warned Celgene that it could not use the safety program “to block or delay approval” of generic competitors. Now, it appeared to be doing just that.
The Federal Trade Commission, which enforces antitrust laws, had been investigating Celgene for years and in June of 2012 notified the company it was poised to take action.
In a previously unreported letter, the FTC said that its staff had recommended filing a legal complaint against the company for refusing to sell to competitors, thereby keeping them out of the marketplace.
The commission’s patience is wearing thin.
—FTC official Richard Feinstein to a Celgene attorney
In its letter, the FTC noted that while Celgene refused to sell its drugs to potential competitors, it routinely provided Revlimid to other third parties around the world, including researchers and universities studying the drug.
Then, in August of 2012, the FDA directed Celgene to sell a small amount of Revlimid to a generic competitor.
With both federal agencies bearing down on Celgene, a closed-door meeting was held at FDA headquarters at the end of August. The FTC sent five lawyers, and 11 FDA staffers attended. Celgene showed up with a large contingent that included in-house lawyers and outside counsel.
Celgene started by denying it was using the safety program to block generics, according to minutes of the meeting. (The minutes were filed in a court case against Celgene, and it is unclear if they were prepared by the agencies or the company.) Citing the threat of birth defects, the company said that it had legitimate safety concerns about selling Revlimid to generic companies and that it needed to protect its investment in the drug.
Jane Axelrad, an associate director for the FDA, told Celgene that it was raising safety concerns because “the company does not want generics on the market,” according to the minutes. She declined to comment.
The meeting ended without a resolution. The FDA had no way of enforcing its directive to Celgene. The FTC staff, however, was still determined to act. The agency had spent more than two years investigating Celgene. It hired experts, deposed Celgene officials and obtained internal company documents.
The staff drafted a complaint alleging the company engaged in unfair actions to maintain a monopoly, hoping either that it would push the company to agree to sell to competitors to avoid legal action or that Celgene would be forced to do so by the courts, according to a person familiar with the agency’s stance.
“The commission’s patience is wearing thin,” FTC official Richard Feinstein wrote to the company’s lawyer in February 2013. “We have reached a point where the staff may be instructed in the very near future to commence litigation.” (Feinstein did not respond to emails seeking a comment.)
Celgene appeared to relent, telling the FTC that it would sell to generic makers, as long as the FDA approved their safety plan. In July, the FDA approved the safety protocols of generic maker Mylan.
Still, Celgene refused to sell.
Jon Leibowitz, who was the chairman of the FTC at the time, told me that Celgene’s promise to cooperate, even if it didn’t result in any sales to generic makers, lessened interest in the case among his fellow commissioners. Three of five commissioners need to vote in favor of commencing litigation. Now, in retrospect, he said that “if we knew then what we know now” about the delays, “we certainly would have brought a case.”
The agency would close its case in 2017 without taking any action.
With would-be generic competitors sidelined by Celgene’s refusal to sell drugs for testing, the company continued to raise the price of Revlimid.
They could raise their price any time they wanted to.
—Francis Brown, former Celgene sales executive
On a Saturday morning in early March of 2014, Celgene President Mark Alles sent an internal email complaining of disappointing first quarter Revlimid sales. Revenue from the star drug, which had surpassed $1 billion the previous quarter, was down by about 1% — or $11.4 million.
“I have to consider every legitimate opportunity available to us to improve our Q1 performance,” he wrote. But the only idea he proposed was a familiar one: raise the price of the drug.
Alles said he wanted a meeting the following Monday to discuss an immediate 4% price increase, followed by another increase of 3% at the beginning of September.
The company implemented those hikes, along with a third in December. It brought the price of Revlimid to $9,854 a month, or $469 a pill, and helped boost Revlimid sales for the year to $5 billion. Alles didn’t respond to my requests for comment.
“They could raise their price any time they wanted to,” said Francis Brown, a former sales executive at the company, in a 2015 deposition. I wasn’t able to reach Brown for comment.
Celgene found a solution to the generic threat when it struck a deal to settle a lawsuit brought by generic maker NATCO Pharma in 2015. NATCO could bring a generic to market, Celgene agreed, but not for seven more years — in March 2022. Even then, the generic would be limited to less than 10% of the total market for Revlimid in the first year, with gradual increases after that.
The deal set the bar for deals with other rivals for limited generic sales, and it ensured that unlimited generic competition — and lower prices — would not arrive until 2026.
The delayed entry of generics may have been bad news for patients and health care payors, but there was one constituency that was thrilled with the 2015 deal. Celgene’s stock jumped nearly 10% the day after it was announced.
“Ridiculous,” “Ugly” and “Killer”
Revlimid turned out to be a unicorn for Celgene, a drug whose financial success proved impossible to replicate.
In October of 2017, Celgene announced it was abandoning a once-promising effort to develop a drug for Crohn’s disease. Shares of Celgene declined by 11%.
As it had done so many times in the past, Celgene tapped Revlimid to try to mitigate the damage. The day it announced the failure of the Crohn’s drug, it quietly raised the price of Revlimid by 9%.
By the end of the year, Celgene had cumulatively raised the cost 20% to $662 a pill, the largest one-year increase in the drug’s history.
That made Revlimid the most expensive Medicare drug that year, with the government insurance program spending $3.3 billion to provide it to 37,459 patients.
At Celgene, the brash increases triggered rare internal dissent. Betty Swartz, the company’s vice president of U.S. market access, objected to the measures in a pricing meeting with the CEO, who at the time was Alles, and other top executives. She said her concerns were swiftly dismissed, according to a whistleblower lawsuit she filed and later dismissed.
“Why would you be afraid to take an increase on our products?” she said the CEO told her. “What could be the worst thing that happens ... a tweet here or there and bad press for a bit.” Swartz declined to comment.
The price increases added to the burden faced by many patients. In online groups, patients use words like “ridiculous,” “ugly” and “killer” when talking about the financial pain they have experienced related to the high costs associated with Revlimid. Some have taken out mortgages, raided retirement funds or cut back on everyday expenses like groceries to pay for Revlimid. Others have found overseas suppliers who ship the drug for pennies on the dollar, although doctors caution there’s no way to guarantee quality. Some just decide not to take the drug.
By increasing the price of Revlimid, Celgene executives in several instances boosted their pay. That’s because bonuses were tied to meeting revenue and earnings targets. In some years, executives would not have hit those targets without the Revlimid price increases, a congressional investigation later found.
In total, Celgene paid a handful of top executives about a half-billion dollars in the 12 years after Revlimid was approved.
Robert Hugin, who worked as Celgene’s CEO and then executive chairman, received $51 million in total compensation from 2015 to 2017. Hugin retired in 2018 to launch an unsuccessful Senate bid.
Even sales reps earned more than $1 million a year and were rewarded with trips to resorts such as the Four Seasons in Maui. That pay is more than two times what the average oncologist earns.
I connected with Hugin just before Christmas while he was driving. He was ardent in his defense of the pricing of Revlimid. He told me the drug passes any cost-benefit analysis because of its impact on multiple myeloma patients like myself. “People recognize when you have a breakthrough therapy and you have an opportunity to deliver that, you want to deliver that across the world,” he said. “And I think Revlimid is an example of a product that ends up to be a global lifesaver because of what it did.”
Hugin told me that when Revlimid has unlimited generic competition, the price will be “cheaper than aspirin” and patients will benefit from that low price for many decades.
Celgene also cited the cost of developing drugs and its expansive research efforts as reasons for the high cost of Revlimid. Celgene said it spent $800 million to develop Revlimid and spent several hundred million more on additional trials to study the use of the drug in other cancers. Those combined figures represent about 2% to 3% of Revlimid sales through 2018.
The drug didn’t get any better. The cancer patients didn’t get any better. You just got better at making money. You just refined your skills at price gouging.
—Former Rep. Katie Porter, D-Calif.
By the end of 2018, Celgene’s stock was down 56% over the past 15 months amid development failures. Despite the raft of bad news, Alles’ total pay that year increased by $3 million to $16.2 million.
Celgene tried desperately to boost its flagging stock price by buying back $6 billion of its own shares that year.
Ultimately, the buyback was not enough. Just days into the new year in 2019, Celgene announced it had agreed to be acquired by Bristol Myers Squibb in a deal valued at $74 billion.
As part of a severance agreement, top Celgene executives stood to make millions once the deal closed. For Alles, that meant a potential estimated payday of $27.9 million.
In the fall of 2020, Alles appeared before the House Oversight Committee, which was investigating the high cost of prescription drugs. He said pricing decisions “reflected our commitment to patient access, the value of a medicine to patients and the health care system, the continuous effort to discover new medicines and new uses for existing medicines, and the need for financial flexibility.”
When it came time for questions, then-Rep. Katie Porter, D-Calif., quizzed Alles in rapid-fire style about Revlimid. Did the drug change as the price increased? Did it work faster? Were there fewer side effects? The drug was the same, Alles responded.
“So, to recap here,” Porter said. “The drug didn’t get any better. The cancer patients didn’t get any better. You just got better at making money. You just refined your skills at price gouging.”
The Drumbeat Continues
High prices have consequences beyond individual patients. While there have been tremendous advancements in the treatment of my disease, there is still no cure. The specter of relapse hovers over every blood test, every new ache or pain.
The day I learned I was in remission, in November 2023, was bittersweet. I wrote at the time that I didn’t get to ring a bell — the traditional sign that a cancer patient has finished treatment. Instead, my doctor explained the next step: “maintenance” treatment.
This includes not only continuing Revlimid, but making monthly visits to my cancer center to get a shot of a bone-strengthening drug, have another drug injected into my stomach and blood drawn for lab tests.
“The visit,” I wrote that day, “only reinforced the fact that I’m a patient, and I always will be.”
For most of us, cancer will return at some point after treatment. And for most patients, the drugs eventually stop working.
Revlimid can also be difficult to live with. Some patients quit the drug after developing severe gastrointestinal issues, infections or liver problems. The drug also poses an increased risk of stroke, heart attack and secondary cancers.
Those are the trade-offs for keeping multiple myeloma in check.
Meanwhile, the drumbeat of price increases continues under Bristol Myers Squibb, helping the company bring in $48 billion in revenue from Revlimid since it purchased Celgene. Bristol said its pricing “reflects the continued clinical benefit Revlimid brings to patients, along with other economic factors.” The company said it is “committed to achieving unfettered patient access to our medicines” and provides some financial support for eligible patients. “While BMS develops prices for its medicines, we do not determine what patients will pay out of pocket.”
Last July, the cost of my monthly Revlimid prescription increased by 7% to $19,660.
At the beginning of this year, my insurer switched me to generic Revlimid. I didn’t fight it, thinking it would result in a dramatic decrease in what ProPublica’s health plan pays for the drug.
It turns out it is not much of a savings: The generic costs $17,349 a month.
Alec Glassford contributed research.
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