January 19, 2018 News

MLex Market Insight: How Celgene Uses Safety Concerns to Keep Its $7 Billion Cancer Drug on Top

January 12

Leah Nylen

Pam Holt, a retired teacher in Grainger, Indiana, was diagnosed with cancer in 2014. At the time, her treatment — with a derivative of the once-banned sedative thalidomide — cost $588 a month. In the past few months, her share of the bill has risen to $640 a month.

“I do have a little retirement. This is not how I planned on spending it all,” said Holt, 68, who admitted that this year she has had to put some of the pharmacy bills on her credit card. “These bills are just horrendous.”

A month’s supply of Celgene’s thalidomide, branded as Thalomid, lists for about $5,000 to $9,000, including the cost paid by insurers. Its sister drug, a thalidomide derivative called lenalidomide, goes for $18,000 to $22,000 a month under the brand name Revlimid.

Celgene is the exclusive provider of both drugs, which some cancer patients use for only a few months but others take for years. Thalidomide is no longer under patent, but Celgene has effectively used US federal drug safety procedures to stonewall generic versions before they can reach market. It’s not clear whether that conduct is illegal.

Celgene is by no means the only company that cites federal drug safety rules in refusing to provide samples. At a July workshop, the US Food and Drug Administration said it received at least 150 complaints from generics unable to access samples for restricted drugs. The unavailability of generics has significant monetary consequences. One 2014 study, sponsored by the Association for Affordable Medicines, estimated that misuse of the rules costs $5.4 billion each year — $960 million of that in out-of-pocket costs paid by patients.

In 2016, Celgene brought in more than $7 billion in revenue on those two drugs alone, and in the first quarter of 2017, nearly two-thirds of its revenue was attributed to Revlimid. The US Federal Trade Commission has found that when a company faces generic competition, the price of a drug typically plummets at least 80 percent.

Holt has multiple myeloma, a cancer that attacks the white blood cells. The disease can lead to breakdown of the spine and ribs without treatment. Two decades ago, a patient diagnosed with multiple myeloma might only live three to four more years. But the unlikely revival of thalidomide — a drug once banned around the world after it was linked to horrific birth defects in the 1960s — now allows cancer patients to live a decade or more with monthly treatments.

Celgene maintains its exclusivity through an FDA safety procedure. The company refuses to sell samples of its drugs to would-be rivals, citing safety concerns. Without a sample, a competitor can never prove to the FDA that its generic version is identical to the original drug — and so the FDA never certifies the generic for market.

The FDA has decried the “shenanigans” by Celgene and other pharmaceutical companies, but has said it has no authority to make them stop the practice. Celgene argues that it is complying with the relevant safety procedures, and that safety concerns outweigh any duty on the company to deal with its competitors.


Patients For Affordable Drugs is the only independent national patient organization focused exclusively on achieving policy changes to lower the price of prescription drugs.