Fresh Air Episode Summary: "His Cancer Meds Were Nearly $1K A Pill. How Did That Happen?"
Host: Dave Davies
Guest: David Armstrong, Senior Reporter for ProPublica
Release Date: May 14, 2025
I. Introduction: A Personal and Investigative Journey
David Armstrong, a seasoned investigative reporter for ProPublica, shares his deeply personal journey intertwined with his professional investigation into the exorbitant costs of cancer medication. Diagnosed with multiple myeloma in 2023, an incurable blood cancer, Armstrong found himself reliant on Revlimid, a drug priced at nearly $1,000 per pill. This personal stake fueled his determination to uncover the mechanisms behind such high drug prices.
“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.”
— David Armstrong [05:31]
II. The Origins of Revlimid: From Thalidomide to a Cancer Breakthrough
Armstrong delves into the history of thalidomide, a drug initially developed in the 1950s by a German pharmaceutical company to treat morning sickness in pregnant women. Tragically, thalidomide caused severe birth defects, leading to its ban in most countries by the 1960s.
“Thalidomide was developed... it was sold... over the counter... It was incredibly potent... caused severe birth defects.”
— David Armstrong [06:51]
Ironically, the very property that made thalidomide dangerous—its ability to inhibit blood vessel growth—became beneficial in treating cancer tumors. This repurposing marked the birth of Revlimid, a derivative developed by Celgene, designed to combat multiple myeloma by starving tumors of necessary blood supply.
III. Celgene’s Strategic Maneuvers: Patents and Pricing
Celgene, initially a struggling pharmaceutical company, recognized the potential of thalidomide as a cancer treatment after witnessing promising results in Arkansas. However, they faced a significant challenge: Celgene did not hold the patent for the active ingredient in thalidomide due to its age. To circumvent this, Celgene developed Revlimid, a slightly modified version of thalidomide, allowing them to secure a more robust patent.
“Celgene started to explore alternatives to thalidomide... ended up developing Revlimid.”
— David Armstrong [15:14]
Upon its release in 2005, Revlimid was priced at an astonishing $55,000 annually, a figure far exceeding initial market expectations. In stark contrast, the manufacturing cost per pill remained approximately 25 cents, highlighting a massive markup.
“The cost to manufacture Revlimid is approximately 25 cents a capsule.”
— David Armstrong [15:47]
Despite criticism, Celgene justified the high price by citing research and development expenses, even though ProPublica's investigation revealed that the $800 million spent on Revlimid's development was minimal compared to its $100 billion in total sales.
IV. Maintaining Monopoly: Tactics Beyond Patent Expiry
Celgene employed strategic measures to extend its monopoly on Revlimid beyond the original patent period. By controlling the drug's distribution through FDA-mandated safety programs—designed to prevent birth defects—Celgene ensured that generic manufacturers struggled to compete.
“They controlled the distribution... Celgene refused to sell it to [generic companies], maintaining their market grip.”
— David Armstrong [17:19]
Regulatory bodies like the FDA and Federal Trade Commission became aware of these tactics. However, limited enforcement capabilities and settlements delayed generic competition until 2022, keeping prices artificially high until then.
V. Price Hikes and Internal Pushback
Celgene demonstrated a pattern of arbitrary price increases to maximize revenues. For instance, in 2014, a 9% price hike was implemented when Revlimid sales fell short. In 2017, after abandoning a promising drug for Crohn's disease, the price surged by 20%.
“They used Revlimid to boost overall revenues... described it as a piggy bank.”
— David Armstrong [20:02]
Internal dissent surfaced when a Celgene official filed a whistleblower complaint against these price hikes, revealing a corporate culture indifferent to ethical considerations.
“The CEO admonished her, said, ‘what's the worst that's going to happen? A bad tweet.’”
— David Armstrong [21:10]
VI. Broader Implications: The American Drug Pricing Dilemma
Armstrong expands the discussion to the broader issue of why Americans pay more for prescription drugs compared to other wealthy nations. He attributes this to the fragmented U.S. healthcare system, lacking a single payer, which complicates price negotiations.
“We have a very fractionalized system... it's very hard to negotiate a price when everybody's doing their own negotiating.”
— David Armstrong [23:10]
Amidst this landscape, political efforts emerge to curb drug prices. President Trump’s executive order aimed to compel pharmaceutical companies to offer lower prices comparable to other countries. However, Armstrong emphasizes the challenges ahead, citing potential legal battles and entrenched industry resistance.
“The pharmaceutical lobby is not to be underestimated... this will be a tough fight.”
— David Armstrong [25:33]
Comparatively, the Biden administration's measures, though more modest, faced skepticism regarding their impact, with projections of only modest price reductions.
VII. The Role of Middlemen and Industry Defenses
The discussion also touches upon Pharmacy Benefit Managers (PBMs)—middlemen in drug pricing. While President Trump criticized PBMs for taking profits without delivering products, Armstrong highlights the opaque nature of their operations and the call for greater transparency.
“These are middlemen that set prices through sometimes secret rebates and discounts... there's been a lot of calls to eliminate the middlemen.”
— David Armstrong [27:20]
Pharmaceutical companies defend their pricing by citing the high costs of research and development. However, Armstrong counters this by referencing studies indicating that government funding plays a significant role in drug development and that companies often allocate substantial funds to stock buybacks and dividends rather than R&D.
“Government funding has been just as important... drug makers spend more on stock buybacks and investor dividends than they do on research and development.”
— David Armstrong [28:20]
VIII. Navigating as a Patient-Reporter
Balancing his role as a patient with his investigative responsibilities, Armstrong addresses concerns about potential biases. He maintains transparency about his condition and strives to ensure objectivity, acknowledging that while his perspective has shifted, his commitment to uncovering the systemic issues in drug pricing remains steadfast.
“Being a patient changed my perspective... there's so much more research and discoveries that need to happen.”
— David Armstrong [39:35]
Conclusion: A Call for Systemic Change
David Armstrong's investigation into Revlimid's pricing illuminates the complex interplay between pharmaceutical companies, regulatory bodies, and the healthcare system. His personal narrative underscores the human cost of these high prices, advocating for a more equitable and transparent approach to medication affordability in the United States.
Find David Armstrong’s full investigative piece, "The Price of Remission," on the ProPublica website.