ProPublica reporter David Armstrong began investigating the pharmaceutical industry when he learned a single pill of his cancer treatment costs about the same as a new iPhone — but costs 25 cents to make. His investigation into the discovery and marketing of the drug Revlimid revealed strategies employed by pharmaceutical companies to ward off competition, and keep prices of their medications high. We'll also talk about ways insurance companies deny claims for tests and treatment recommended by doctors.Also, David Bianculli reviews a music documentary about singer-songwriter Janis Ian.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
Chapter 1: Why are cancer drugs so expensive?
This is Fresh Air. I'm Dave Davies. Our guest today, David Armstrong, is a veteran investigative reporter who in 2023 was writing stories about challenges for patients in American health care when he was suddenly plunged into his subject in a deeply personal way. He was diagnosed with multiple myeloma, an incurable blood cancer.
He would soon be prescribed a drug called Revlimid, which is cheap to make but really expensive to buy. A single pill costs nearly $1,000, roughly the price of a new iPhone. Armstrong decided to research the development and marketing of the drug, and he discovered tactics used by drug companies to maintain monopolies on their medications as long as possible and keep prices high.
Chapter 2: What is Revlimid and how is it related to thalidomide?
Revlimid is one of the best-selling pharmaceuticals of all time, with total sales of more than $100 billion. This is also remarkable since the parent compound in Revlimid, thalidomide, was banned in most of the world in the 1960s, after it was shown to cause severe birth defects when given to pregnant women. David Armstrong is a senior reporter for ProPublica who focuses on health care.
He previously reported for STAT, the online service reporting on health and medicine, as well as the Boston Globe and the Wall Street Journal, where he shared a Pulitzer Prize for coverage of the 9-11 attacks. His new story about Revlimid is The Price of Remission. You can find it at the ProPublica website. Well, David Armstrong, welcome to Fresh Air.
Thanks for having me.
I want to begin with your illness and the drug that you need to treat it. Multiple myeloma is an incurable blood cancer. Tell us about its symptoms, the course it typically takes in the human body.
Sure. Well, I can describe to you what happened in my situation. And every case for every patient is a little bit different. But for me, it started with a pain in my side that wouldn't go away. It felt like, for many weeks, a bad runner's cramp. And I sought out care for it and went to a doctor who thought, you know, this is probably a muscle strain. But it ended up getting worse.
And one morning I woke up and I couldn't get out of bed. I mean, I had to grip the wall. I was in so much pain that and decided to go to the emergency room. And it was there they did some testing, some scans. And what happens with a lot of multiple myeloma patients is the disease really impacts the bones. It gets in there with these things called lytic lesions, creates holes in the bones.
And many people don't know they have multiple myeloma until they break a bone. I talked to another patient who was golfing and took a swing and his spine, part of his spine literally collapsed. And And he went to the hospital, and that's how he found out he had this disease. So it often lurks without people knowing it's there, and it takes something fairly dramatic for a patient to discover it.
So in my case, I found out that I had it and then began a course for drugs, including Revlimid.
And how long do typically patients live with this illness?
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Chapter 3: How was Revlimid discovered to be effective for multiple myeloma?
I wrote extensively about Purdue Pharma and the Sackler family and how they manipulated the marketplace to make OxyContin appear safe and at low risk for addiction. So, you know, not naive to the ways of drug makers, drug pricing, and marketing. But even with that background... I couldn't believe that nearly $1,000 a pill is what my health plan was paying for this drug.
So I wanted to know how this was possible.
You know, thalidomide is such a notorious drug. Tell us a little bit about why it was originally developed and what caused the birth defects.
So thalidomide was developed by a German pharmaceutical company as a treatment for morning sickness for pregnant women, also to help them sleep. And it was sold in Europe, in Germany, for instance, over the counter. And there were advertisements in the UK telling women how safe this drug was. And it turned out not to be the case. Even a single dose of thalidomide was associated with birth defects.
It was incredibly potent that way. and tragic, as it turned out. And more than 10,000 babies, and some estimates are up to 20,000 babies, primarily in Europe, Canada, Australia, were born with some really horrific birth defects, and a large number of them died shortly after birth.
And this was just a horrific scandal that rocked the developed world in the 60s and led to a number of reforms for how drugs are tested for safety. including here in the United States.
And the thalidomide would basically cut off the development of blood vessels to the fetus?
Yeah, the way I understand it is it deprived the fetus of new blood vessels that the fetus needed to develop.
Right, which is ironically what made it helpful in fighting cancer tumors.
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Chapter 4: How did Celgene maintain its monopoly on Revlimid?
So we were saying that there was this discovery that thalidomide, this drug which had such a terrible reputation for causing birth defects, proved effective in treating multiple myeloma. And the patent was held by Celgene, this little pharmaceutical company. And it's interesting. You write that, I guess, not all patents are created equal. Celgene's patent was limited in a way.
How and why does this matter?
So the problem that Celgene had with the thalidomide patent is they did not have a patent for the active ingredient. And that's because thalidomide was such an old drug. It was discovered and developed in the 1950s by a German pharmaceutical company. And for drug makers, the active ingredient is a really important patent. So Celgene started to explore alternatives to thalidomide.
And there was two reasons for that, at least two. One is they hoped to find a drug that didn't cause birth defects and a drug that they could patent in a more influential way. So they started studying analogs of thalidomide. And this is just a slightly tweaked version of the parent compound. You know, you move an atom here, do this here in the chemical structure.
And that's how they ended up developing Revlimid.
And when they finally released the drug in 2005, how expensive was it?
So in 2005, they released the drug with a price of $55,000 a year. And that really surprised a lot of people, including the analysts who follow the company. They thought that it would be half as much as that. But the company did its own due diligence, and that was a price they thought that they could justify. And it ended up being a price that people paid.
And what did it cost to manufacture a pill?
So the cost to manufacture Revlimid is approximately 25 cents a capsule. And that was true at the start, and it was true through most of the history of the drug. And that's according to a Celgene official who testified in a court case.
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Chapter 5: What strategies did Celgene use to control drug pricing?
And the FDA and the Federal Trade Commission became aware of this, took some steps, but somehow were ineffective, right? Right.
They became aware of it. The FDA at one point ordered or directed Celgene to sell to a generic competitor. The FDA didn't have any enforcement ability, however. The Federal Trade Commission did do a lengthy investigation, and the staff proposed taking legal action against Celgene, but that didn't happen. The company promised that they would sell the drug
The commissioners that are needed to approve litigation thought that they were going to sell the drug and were not interested in pursuing litigation at that time. And that enabled them for several more years, again, to have this market all to themselves without any competition. So what did that mean for Celgene in the end?
Celgene still had a monopoly on the marketplace, and they maintained that monopoly until 2022. In 2015, they settled with one of the generic companies who was involved in litigation with them. And that settlement required the generic maker to stay out of the marketplace until 2022. And even when it comes into the marketplace in a very limited way, less than 10% of the market.
2026.
That's right. For a drug that was released in 2005. So that's a long stretch when Celgene kind of had the ability to raise the cost of the drug at its own discretion. What did you discover about the price hikes?
What we found is the company in certain situations used Revlimid to boost overall revenues. There was a situation in 2014 where Revlimid sales were not up to what the company expected. And a memo was sent out saying we need a price increase. Another situation in 2017 where they had a
a drug that was very promising for another condition called Crohn's disease, failed and they abandoned that project. And the day they abandoned that project, they raised the price of Revlimid 9%. You know, we've described it essentially as a piggy bank. They could tap Revlimid whenever they needed to. And there was really no regulator or governor on the price increases.
It was really up to the company.
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Chapter 6: What was the impact of Celgene’s pricing strategy on the healthcare market?
Well, you know, I think, first of all, the administration should be given some credit for bringing attention to this issue and pledging to do something about it. I think the executive order didn't have a lot of specific mechanisms for how this is going to be accomplished. A lot of it will be down the road.
They talk about getting together with the drug companies and discussing prices of certain drugs. And if that doesn't work, they could turn to rulemaking. which would probably be Medicare and Medicaid programs instituting rules on what prices they will pay for drugs. But, you know, a lot of it is the devil's in the details here. And I think we'll have to see.
It's a complicated thing to get these prices down. You know, it doesn't even address the issue of what drug prices are launched at. You know, cancer drugs in particular are being launched at prices that are so expensive that, you know, you have nowhere to go when you start negotiating a decreased price because they started so high. So we'll have to see.
Right. You know, there's been a lot of discussion of the federal government negotiating for better prices for Medicaid and Medicare, where the government is in fact the one buying the product. In the case of you know, controlling transactions among two private entities, right? I mean, an American drug maker and American buyers and those who buy in Europe.
You're really talking about price controls, aren't you?
I think you can make the argument it is. And the reality with, you know, things like this executive order is that whatever comes from it in terms of real concrete actions is likely to be challenged in court. You know, the Trump administration ran into this problem the first time around.
They proposed a very modest, I think, idea where they would test out drug pricing for some of the Medicare drugs that are administered in a doctor's office. And that, you know, was held up by the courts. And then the first administration expired. So it's going to be a fight. You know, the pharma lobby is not to be underestimated.
You know, they spend billions of dollars on lobbying or millions, I should say. So this will be a tough fight trying to wrangle prices down.
Right. Now, the Biden administration has claimed credit for reducing prices of certain widely used drugs, I think particular diabetes medications.
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