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After narrowly dodging a corruption conviction, New Jersey Senator Bob Menendez faces a re-election dogfight against former
CEO Bob Hugin. The Senator is now lying to voters about his opponent’s business record the way he dissembled about his political corruption.
Democrats always treat a Republican candidate from business as if commerce is by definition criminal, and Mr. Hugin is no exception. The GOP Senate candidate joined the New Jersey-based biotech firm Celgene in 1999 in its infancy and rose to CEO in 2010. He helped grow Celgene into one of the country’s largest pharmaceutical companies.
Big pharma is a perennial target for politicians, and Mr. Menendez has been vilifying Mr. Hugin for ordinary business practices. Among other things, his ads charge that Mr. Hugin settled a lawsuit for $280 million “for hiding information about potentially fatal side effects” and “raised the cost of a cancer drug three times in one year.” These distortions need to be corrected since the truth is that tens of thousands of patients have benefited from Celgene’s innovations.
Celgene’s biggest blockbusters have been Thalomid and Revlimid, which treat the rare blood cancer multiple myeloma and are based on the compound thalidomide. While thalidomide was found to cause birth defects in the 1950s, research in the 1990s suggested it could treat conditions including AIDS.
In 1998 FDA approved Celgene’s application of thalidomide to treat leprosy, which affects about 100 Americans each year. The following year the New England Journal of Medicine published a study that found thalidomide “had substantial antitumor activity in patients with advanced myeloma,” which is incurable with conventional chemotherapy.
Celgene began to highlight thalidomide’s potential to treat multiple mylenoma before the FDA approved Thalomid and Revlimid in 2006. A former employee in 2010 sued Celgene for $40 billion under the False Claims Act for allegedly engaging in illegal off-label promoting, paying kickbacks to doctors and billing Medicare for the therapies.
Companies under FDA rules aren’t supposed to promote drugs for uses that haven’t been approved by the FDA, but some courts have ruled this restriction violates the First Amendment. Doctors are allowed to prescribe drugs for unapproved indications, and Medicare will reimburse off-label cancer uses that are supported by clinical research.
Many doctors prescribed Celgene’s drugs for multiple myeloma because they were superior to existing therapies and caused fewer severe side effects. The Justice Department under Barack Obama decided not to intervene in the “qui tam” lawsuit, and a federal judge dismissed allegations of kickbacks. Celgene settled remaining claims last year for $280 million. Mr. Hugin’s job was to maximize value for shareholders, and settling dubious lawsuits is often a cost of doing business.
As for the accusation that Mr. Hugin gouged patients, the unfortunate reality is that curing cancer isn’t cheap. Between 2010 and 2017, the list price for a monthly dose of Revlimid doubled to about $18,000. Most patients pay far less out-of-pocket.
Generic manufacturers have complained that Celgene has used the FDA’s Risk Evaluation and Mitigation Strategy (REMS) program as a pretext to withhold samples of Revlimid that could be used to develop and test alternatives. This common industry ploy can extend a patent life by years. But Revlimid’s patents don’t expire until 2027, and earlier this year it agreed to allow
to introduce a generic competitor in 2022.
With competition from CAR T-cell treatments on the horizon, Celgene may now be trying to maximize profits from Revlimid that are necessary to fund research and development into other treatments. Celgene has trials for more than 40 new drugs or indications in the pipeline. Earlier this year Celgene purchased the biotech startup Juno, which has been a CAR T-cell pioneer.
None of Celgene’s business practices are corrupt—unlike Mr. Menendez’s machinations to procure visas for his doctor friend Salomon Melgen’s girlfriends. The Senator also intervened for the doctor with the Department of Health and Human Services in a Medicare billing dispute that involved reused vials of a macular degeneration drug that put patients at risk of infection.
Mr. Menendez escaped conviction thanks to the Supreme Court’s McDonnell ruling that made it harder for prosecutors to prove quid-pro-quo corruption. But the Senate Ethics Committee “severely” admonished him, and New Jersey voters now have an opportunity to oust a man who abused his power to help a campaign donor in favor of an entrepreneur who helped to save lives.