In her short political career, Rep. Katie Porter has quickly acquired a reputation for her fierce interrogation of congressional witnesses. Just ask former Celgene CEO Mark Alles.
In a video that has gone viral, Porter is shown confronting the pharmaceutical executive on Wednesday over his financial compensation during a hearing on runaway drug prices. The California Democrat said Celgene more than tripled the price of cancer drug Revlimid to $765 a pill, from $215 in 2005, without significantly improving the treatment. Alles received a $500,000 bonus connected to higher profits from Revlimid in the last two years he served as chief executive of Celgene, Porter said.
“Do you know what this number is,” Porter asked Alles after writing the figure “$13 million” on a whiteboard at her side. Alles responded that he didn’t know but that it looked like his compensation.
“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. You just refined your skills at price-gouging,” Porter said.
The video cuts off before Alles is able to respond. Earlier in the hearing, the executive, who joined Celgene in 2004 and became its CEO in 2016, called Revlimid “one of the most clinically important therapies discovered by Celgene.” He also said the company had invested $800 million in developing Revlimid and “hundreds of millions” more after it was approved by regulators in 2005.
“I have strived to bring the values of integrity, service and respect to every part of my career,” Alles said in his testimony.
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.
Porter, a former consumer protection attorney who has grilled other CEOs, including JPMorgan Chase CEO Jamie Dimon and Facebook chief Mark Zuckerberg, pointed out that 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.”
Alles could not be reached for comment. Bristol Myers CEO Giovanni Caforio, who also testified at the hearing, pledged not to increase the price of Revlimid again this year.
Bristol Myers Squibb declined to comment to CBS MoneyWatch. A company spokesperson also declined to answer any questions about Revlimid, including whether the company has inquired into why Celgene increased the price of the drug and whether those increases were fair.
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