Senator Burr Accepted Thousands of Dollars from Pharma Company He Defended for Charging VA High Price for Medicine

FOR IMMEDIATE RELEASE
Friday, November 4, 2016
CONTACT: Matt Kravitz
 
Senator Burr Accepted Thousands of Dollars from Pharma Company He Defended for Charging VA High Price for Medicine
 
Burr excused cost of drug as price of innovation even though VA paid more than other countries, forcing VA to ration treatment for disease affecting 174,000 veterans
 
Recently filed FEC report shows company donated to Senator Burr’s reelection
 
RALEIGH – The most recent FEC report for Senator Richard Burr shows he accepted thousands of dollars from a pharmaceutical company he once defended after it charged the Department of Veterans Affairs high prices for a drug, forcing the VA to ration treatment for a disease affecting 174,000 veterans. The company, Gilead Sciences, offered the treatment to other countries’ health systems at a lower cost, but Senator Burr excused the price it charged the VA as the cost of innovation.
 
In a recently filed FEC report, Senator Burr is shown to have accepted $5,000 – the maximum contribution allowed by law – from Gilead Sciences, the same company that Senator Burr defended for charging the VA high prices for a drug to treat Hepatitis C.
 
Senator Burr’s approach differed from that of experts, health insurers and fellow Republican Senator Chuck Grassley – all demanded answers for, instead of excusing, the high costs.
 
“This is just the latest example of how Senator Burr has made Washington work for him – defending a company that charged our VA exorbitant prices and then taking thousands of dollars from it to fund his campaign,” said Matthew Kravitz North Carolina Democratic Party press secretary. “What’s worse is Senator Burr tried to use his position on the Veterans Affairs Committee as an excuse for why he missed nearly 70 percent of his Senate Armed Services Committee hearings – but this new public record shows he wasn’t helping North Carolina veterans there, either. That’s just wrong.”
 
RICHARD BURR TOOK MONEY FROM PHARMA COMPANY HE DEFENDED FOR CHARGING THE VA HIGH PRICES
 
RICHARD BURR TOOK $5,000 FROM GILEAD SCIENCES…
 
9/30/16: Gilead Sciences Healthcare Policy PAC Contributed $5,000 To The Richard Burr Committee. [Q3 Report, The Richard Burr Committee, FEC, 10/15/16]
 
…AFTER DEFENDING THE HIGH DRUG PRICES THEY WERE CHARGING THE DEPARTMENT OF VETERANS AFFAIRS
 
2014: RICHARD BURR DEFENDED THE HIGH PRICES GILEAD WAS CHARGING THE VA FOR A HEPATITIS C DRUG AS THE COST OF INNOVATION
 
HEADLINE: “High Costs Threaten Veterans’ Access To Hepatitis C Drug Sovaldi.” [Stars & Stripes, 12/3/14]
 
Stars & Stripes: Richard Burr “Stood Up For” The High Prices Gilead Sciences Charged For Its Hepatitis C Drugs, Arguing “Innovation Is Expensive.” “The ranking Republican on the Senate committee stood up for the pricing. Sen. Richard Burr, R-N.C., said companies such as Gilead take large financial risks and navigate a testing and approval ‘valley of death’ when developing new drugs. ‘Innovation is expensive … I think the one thing we agree on is we don’t want to give up innovation,’ Burr said. Instead of attacking prices, he said Congress and the VA should look at how much could be saved in the long-term by treating veterans known to have hepatitis C. ‘I believe the price of this particular drug should be looked at on the macro level,’ Burr said.” [Stars & Stripes,12/3/14]
 
·         Richard Burr On The High Price Of Hepatitis C Drug Sovaldi: “Innovation Is Expensive.” BURR: “The one take-away that I have so far is that innovation is expensive. We have known that. Every time we innovate a new therapy, a new drug, a new device, there is a recovery cost, and many times it is government that drives the cost up because we lengthen the approval time; therefore, we shorten the patent lifetime, or individuals question exactly what the recovery period is going to be like and the cost of the capital they need to make it through the ‘‘valley of death.’’ Research and advanced development and slow trials cost much more than what the innovator thought to begin with. So, if you are going to hold companies responsible, then you have got to hold venture capitalists responsible and everybody in the chain of financing innovation.” [Hearing, U.S. Senate Committee on Veterans’ Affairs, GPO, 12/3/14] (VIDEO)
 
RICHARD BURR USED THE SAME TALKING POINTS AS GILEAD EXECUTIVES TO DEFEND THE PRICING OF ITS HEPATITIS C DRUG
 
Richard Burr: “We Dumb Ourselves Down To Only Being Focused On How Much Sovaldi Costs.” BURR: “We cannot do that today. Therefore, we dumb ourselves down to only being focused on how much Sovaldi costs, and you have to ask yourself, if we were paying $10, would you have a staple of new therapies that might be coming out that do not require additional toxic products to go with? The answer is, probably, we would not, because a market has to have the capital to do research and development. It has to have the marketplace.” [Hearing, U.S. Senate Committee on Veterans’ Affairs, GPO, 12/3/14] (VIDEO)
 
·         Gilead Executive Vice President On The Cost Of Sovaldi: “Price Is The Wrong Discussion.” “Gilead executives insist that because their drugs quickly cure hepatitis C—saving patients, hospitals, and insurers the costs of long-term care—they’re well worth the price. The suggestion that the company’s pricing is motivated by greed is ‘perplexing,’ says Chief Scientific Officer Norbert Bischofberger. ‘Price is the wrong discussion,’ says Gregg Alton, Gilead’s executive vice president for corporate and medical affairs. ‘Value should be the subject.’ Martin, the CEO, points out that before tackling hepatitis C, the company pioneered combination HIV drugs, blending compounds invented elsewhere with in-house discoveries to make medications easier for patients to take. ‘For a long time we’ve had innovation after innovation,’ he adds. For many patients, Gilead’s drugs are indeed miraculous. But is the U.S. health-care system paying too much for them?” [Bloomberg, 6/3/15]
 
Richard Burr On The Price Of Sovaldi: “We Are The Only Country In The World That Pays Exorbitant Prices To Provide Innovation First Here, But That’s What We Need And That’s What The American People Have Come To Expect.” “Successful drugs can cost $1 billion to bring to market, including spending on research, development and marketing. Supporters of drug companies say big advances necessitate high prices. ‘We are the only country in the world that pays exorbitant prices to provide innovation first here, but that’s what we need and that’s what the American people have come to expect,’ said Richard Burr, a Republican Senator from North Carolina who has spent decades working on bipartisan health bills.” [Reuters, 5/28/14]
 
·         Gilead Vice President: High Cost Of Sovaldi Was Justified Because “There Needs To Be More Of A Reward” When People Were “Bold And Go Out And Innovate Like This And Take The Risk.” “‘That’s very unlikely that we would do that,’ responds Alton, Gilead vice president. ‘I appreciate the thought.’ Alton says critics should ‘look at the big picture.’ ‘Those who are bold and go out and innovate like this and take the risk — there needs to be more of a reward on that,’ he says. ‘Otherwise, it would be very difficult for people to make that investment.’” [NPR, 12/30/13]
 
DEPARTMENT OF VETERANS AFFAIRS WAS FORCED TO RATION GILEAD HEPATITIS C DRUG AFTER PAYING MORE FOR IT THAN ENTIRE COUNTRIES’ HEALTH SYSTEMS
 
Department Of Veterans Affairs Paid More For Gilead’s Total Sovaldi Treatment Regimen Than The Health Systems Of Canada, Germany, Or India. “But even with the more than 40 percent discount VA has negotiated with Gilead, the department pays more for the total treatment regimen than the health systems of Canada, where 12 weeks of Sovaldi costs $55,000; Germany, where it costs $66,000; or India, where Gilead is negotiating to provide generic versions for $2,000. The price differential has led some U.S. lawmakers and advocates to accuse the company of price gouging.” [Military Times, 1/7/15]
 
·         Gilead Sold Cheaper Generic Versions Of Sovaldi In Other Countries. “Hepatitis C patients in developing countries could soon gain access to a cheaper, generic version of a drug that sells for $1,000 a pill in the USA. Gilead Sciences (GILD), which makes the drug, announced Monday that it has signed a licensing agreement with seven companies in India to make generic versions of its drug sofusbivir, sold under the brand name drug Sovaldi, and sell it in 91 countries. Those countries are home to more than 100 million people with chronic hepatitis C infection, or more than half of the world’s patients. About 3 million Americans suffer from chronic hepatitis C, a leading cause of liver cancer and liver transplants.” [USA Today, 9/16/14]
 
Veterans Administration Was Forced To Ration Gilead Sciences’ Breakthrough Hepatitis C Cure, A Disease Affecting 174,000 Veterans, Due To The Cost Of Treatment. “Sen. Bernie Sanders (I-Vt.) used one of his last hearings as chairman of the Senate Veterans Affairs Committee to review how VA has had to ration a break-through medicine that cures hepatitis C, a liver virus infecting 174,000 veterans, because a course of treatment — 84 pills over 12 weeks — costs VA almost $50,000 per patient. Sanders said the biopharmaceutical company Gilead Sciences Inc., of Foster City, Calif., stands to earn more than $200 billion on a new drug called Sovaldi. When combined with still toxic antiviral medicines including interferon injections, Sovaldi cures hepatitis C at a 90 percent rate, and does so faster and with fewer side effects than past drug regimens.” [Daily Press, 12/21/14]
 
·         Military Times: Gilead’s Pricing Of Sovaldi “Threaten[ed] The Veterans Affairs Department’s Health Budget — To The Point That VA…May End Up Providing It To Only The Sickest Patients.” “One of the costliest drugs on the market threatens the Veterans Affairs Department’s health budget — to the point that VA, which added the medication to its formulary in April, may end up providing it to only the sickest patients. At a commercial cost of $1,000 a pill, the hepatitis C drug Sovaldi received FDA approval in 2014, a breakthrough that reduced the time it takes to treat patients with the blood-borne virus to 12 weeks, down from a year, and at reduced risk. But treating all of the 174,000 hepatitis C patients in the VA health system is cost-prohibitive. Even with the cost negotiated by VA with the company’s maker, Gilead Sciences Inc. of Foster City, California — $594 per dose — treatment would run nearly $12 billion.” [Military Times, 1/7/15]
 
GILEAD SCIENCES MADE CONSIDERABLE PROFIT OFF ITS HEPATITIS C DRUG AFTER MORE THAN DOUBLING THE PRICE INITIALLY ESTIMATED FOR IT
 
Stars & Stripes: “Gilead Bought The Original Company That Developed Sovaldi For $11 Billion And Stands To Make About $200 Billion On The Drug.” “Sanders criticized Gilead for the prices and reaping large profits while veterans face possible rationing due to the expense, calling it a moral issue. According to the senator, Gilead bought the original company that developed Sovaldi for $11 billion and stands to make about $200 billion on the drug. ‘What we are looking at is very clearly an excessive profit and a lot of that profit is going to be paid by the taxpayers in this country,’ Sanders said.” [Stars & Stripes, 12/3/14]
 
·         2014: Bloomberg: Sovaldi Generated $10.3 Billion In Sales, “Making It One Of The Most Lucrative Pharmaceutical Launches Ever.” “The promise of a cure, however, doesn’t come cheap. After Sovaldi received approval from the U.S. Food and Drug Administration in December 2013, Gilead announced the drug would cost $84,000 for a 12-week course, or exactly $1,000 a pill. That’s more than double what Pharmasset, the biotech company that developed an early experimental version of the drug, initially said it planned to charge—until Gilead bought Pharmasset in 2011. For 2014, Sovaldi generated $10.3 billion in sales, making it one of the most lucrative pharmaceutical launches ever. In just the final three months of 2014, Harvoni added $2.1 billion. Gilead’s market capitalization has soared from $29 billion to $167 billion in five years. The net worth of its chief executive officer, John Martin, exceeds $1 billion.” [Bloomberg, 6/3/15]
 
Gilead More Than Doubled The Price Of Sovaldi After Purchasing The Company That Developed An Early Version. “The promise of a cure, however, doesn’t come cheap. After Sovaldi received approval from the U.S. Food and Drug Administration in December 2013, Gilead announced the drug would cost $84,000 for a 12-week course, or exactly $1,000 a pill. That’s more than double what Pharmasset, the biotech company that developed an early experimental version of the drug, initially said it planned to charge—until Gilead bought Pharmasset in 2011. For 2014, Sovaldi generated $10.3 billion in sales, making it one of the most lucrative pharmaceutical launches ever. In just the final three months of 2014, Harvoni added $2.1 billion. Gilead’s market capitalization has soared from $29 billion to $167 billion in five years. The net worth of its chief executive officer, John Martin, exceeds $1 billion.” [Bloomberg, 6/3/15]
 
·         Bloomberg: “Merger Documents Also Revealed That Pharmasset Tentatively Considered Introducing PSI-7977 With A Price Of $36,000, Less Than Half The Amount Gilead Ultimately Charged For A Three-Month Treatment.” “Merger documents later filed with the Securities and Exchange Commission indicate that the other companies Pharmasset contacted never submitted formal offers. Milligan says Gilead’s aggressive moves discouraged the competition. In a sense, though, Gilead bid against itself to secure the prize. Merger documents also revealed that Pharmasset tentatively considered introducing PSI-7977 with a price of $36,000, less than half the amount Gilead ultimately charged for a three-month treatment. (In an amended filing, Pharmasset later adjusted the projected price range to $36,000 to $72,000.)” [Bloomberg, 6/3/15]
 
GILEAD WAS BLASTED BY EXPERTS, HEALTH INSURERS, AND EVEN REPUBLICAN SENATOR CHUCK GRASSLEY FOR CHARGING SO MUCH FOR ITS HEPATITIS C DRUG
 
Republican Senator Chuck Grassley Signed On To A Letter To Gilead Demanding “A Better Understanding Of How Your Company Arrived At The Price For [Sovaldi].” “Congress has also jumped into the fray. Last July, Ron Wyden (D-Ore.), then chairman of the Senate Finance Committee, and ranking minority member Charles Grassley (R-Iowa) demanded in an eight-page, single-spaced letter to Gilead that the company provide an itemized accounting of its R&D costs, marketing expenses, and plans for selling Sovaldi at lower prices overseas. ‘Given the impact Sovaldi’s cost will have on Medicare, Medicaid, and other federal spending, we need a better understanding of how your company arrived at the price for this drug,’ they wrote.” [Bloomberg, 6/3/15]
 
Chief Medical Officer Of The Country’s Largest Manager Of Drug Benefits For Employers And Insurers On Sovaldi: “Never Before Have Drugs Been Priced So High To Treat Such A Large Population.” “Because of the blockbuster sales of Gilead’s two hepatitis C drugs, the company has become the focus of a backlash against the costs of expensive ‘specialty’ drugs that target chronic diseases such as hepatitis, cancer, and multiple sclerosis. Drug spending in the U.S. totaled $330 billion in 2013, according to Anthem. By 2020, spending on specialty drugs alone could reach $400 billion. Patients who receive these treatments almost never see the total cost, but their insurers do. More than two dozen state Medicaid programs for low-income patients, as well as for-profit insurers such as Anthem, have restricted coverage for Sovaldi to those with severe liver damage. ‘Never before have drugs been priced so high to treat such a large population,’ says Steve Miller, chief medical officer at Express Scripts, the country’s largest manager of drug benefits for employers and insurers. In December, Express Scripts announced it would reject coverage for one-pill-a-day Harvoni and instead steer patients to a less pricey rival drug that requires four to six pills a day.” [Bloomberg, 6/3/15]
 
·         Chief Medical Officer Of The Country’s Largest Manager Of Drug Benefits For Employers And Insurers: Gilead Choosing $1,000 A Pill For Sovaldi “Makes It A Lot Harder To Defend As A Scientifically Derived Price.” “It’s into this environment that Gilead introduced Sovaldi at $1,000 a pill. Before December 2013, the company provided few clues it would charge so much, according to Miller of Express Scripts, which creates lists of covered drugs and co-payments and negotiates prices on behalf of employers and insurers. The benefits manager provides services for about 85 million individual members. Gilead’s ‘choosing exactly $1,000 [a pill] makes it a lot harder to defend as a scientifically derived price,’ Miller asserts. The high price ‘took our [corporate] clients totally by surprise,’ he adds. ‘Here you have something that hits in the very last month of the year, and it is not in anyone’s budget’ for 2014.” [Bloomberg, 6/3/15]
 
Anthem Executive Vice President: Gilead’s Pricing Strategy For Sovaldi Was A “Trend Of Ever-Increasing, More Expensive Medicines And Increasing Health-Care Costs” That Was Not Sustainable For Individuals Or The Nation. “Others at the Brookings event saw things differently. Sam Nussbaum, executive vice president for clinical health policy at Anthem, described Gilead’s pricing strategy as contributing to ‘a race to the top,’ which was no compliment. ‘Is this trend of ever-increasing, more expensive medicines and increasing health-care costs sustainable for individuals and for our nation?’ he asked.” [Bloomberg, 6/3/15]
 
Hepatitis-C Specialist Dr. Camilla Graham: Gilead’s Price For Sovaldi Would Border On “Exploitative” Once The Company Recovered Its Cost.  “[Hepatitis-C specialist Dr. Camilla] Graham thinks Gilead should factor the larger market size into the drugs’ price. She notes that Gilead paid more than $11 billion to acquire a smaller company that developed Sovaldi. She acknowledges that Gilead should be allowed to recoup that investment. On the other hand, ‘you only need about 150,000 people to recover that cost,’ Graham says. ‘And so, if you’re treating 2 million people, once you have recovered your cost, then I think it’s … I don’t want to say it’s unfair, but it does start feeling more exploitative.’” [NPR, 12/30/13]
 
America’s Health Insurance Plans Spokesman On Sovaldi: “The Blank Check Mindset We’ve Seen From Gilead Is A Threat To Our Entire Health Care System.” “The drugmaker is expected to rake in nearly $12 billion in hepatitis C drug sales worldwide in 2014. Sovaldi sales have been unprecedented for any drug in its first year on the market. ‘The blank check mindset we’ve seen from Gilead is a threat to our entire health care system, and we hope they will pursue more sustainable pricing in the future,’ said Brendan Buck, a spokesman for the insurance industry’s largest lobbying group, America’s Health Insurance Plans.” [Reuters, 9/12/14]
 
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