Democrat Katie Porter accuses pharma CEO of inflating drug prices and ‘lying’ to patients and policymakers – all with the help of her whiteboard

Representative Katie Porter (D-CA) sits on the House Financial Services Committee.
Representative Katie Porter (D-CA) sits on the House Financial Services Committee.

  • Rep. Katie Porter grilled AbbVie CEO Richard Gonzalez over why the pharmaceutical giant’s drug prices have risen.
  • The California Democrat used a whiteboard and paper cut-outs to illustrate her argument.
  • Porter has become well-known for using her “whiteboard of justice” to grill CEOs.
  • See more stories on Insider’s business page.

Rep. Katie Porter, a California Democrat, accused AbbVie CEO Richard Gonzalez of lying to Americans and policymakers about why the pharmaceutical giant has dramatically increased the prices of some of its most popular drugs during a Tuesday House Oversight Committee hearing.

Using a whiteboard and paper cut-outs to illustrate her points, Porter argued that the pharma company falsely claimed that it raised the prices of its drugs in order to fund increased investments in research and development. She pointed out that the company spent just $2.45 billion on research and development between 2013 and 2018, while it spent $4.7 billion on marketing and advertising, and $50 billion on stock buybacks and dividends.

“So Mr. Gonzalez, you’re spending all this money to make sure you make money, rather than spending money to invest in, develop drugs and help patients with affordable, life-saving drugs,” she said. “You lie to patients when you charge them twice as much for an unimproved drug and then you lie to policymakers when you tell us that R&D justifies those price increases.”

She added, “The Big Pharma fairytale is one of groundbreaking R&D that justifies astronomical prices, but the pharma reality is that you spend most of your company’s money making money for yourself and your shareholders.”

The House Committee released a report on Tuesday finding that AbbVie raked in billions in revenue by raising the prices of two of its drugs – Humira and Imbruvica – in the US over the last 20 years. Since 2003, AbbVie has raised the price of Humira – which is used to treat rheumatoid arthritis and Chron’s, among other autoimmune and gastrointestinal illnesses – by over 470% with 27 individual price increases, according to the report. AbbVie has earned more than $20 billion in revenue annually for the last three years for Humira alone, making it the pharma industry’s best-selling drug.

A spokesman for AbbVie didn’t respond immediately to Insider’s request for comment.

Porter, who taught bankruptcy and commercial law at several law schools before running for office, has become well-known for using her “whiteboard of justice” to grill CEOs. A single mother, Porter says she also uses her whiteboard to keep her kids in line at the dinner table with a list of rules.

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Healthcare stocks are the most shorted as sector faces increasing regulatory scrutiny, report says

medical and clinical laboratory technologist
  • The health care sector has become the most heavily shorted in the US equity market, says S&P Global Market Intelligence.
  • Among the healthcare cohort, biotech shares made up the bulk of the most-shorted stocks at the end of March.
  • The healthcare sector has risen this year but is lagging gains on the S&P 500 index.
  • See more stories on Insider’s business page.

The health care sector has emerged as the most heavily shorted in the US stock market, in part as the industry faces the potential for sharper scrutiny by the Biden administration, according to a report published Tuesday.

Of the 10 most-shorted stocks on all exchanges at the end of March, six were shares of health care companies, said S&P Global Market Intelligence. The sector made up a hefty portion of the 20 most-shorted stocks, as well, with a tally of 12.

Average short interest in healthcare stocks was 5.17%, rising by 31 basis points from mid-March and by 53 basis points from mid-February.

Investors have increasingly shorted healthcare stocks as they considered possible regulatory and other efforts that Biden and the government may pursue, including reforms to lower prices for prescription drugs and addressing pharmacy mergers.

Biotech shares made up nearly all of the most-shorted healthcare stocks in March, with Esperion Therapeutics and Clovis Oncology topping the list. Esperion, which focuses on lipid management, had short interest of about 34% in its stock, and shares of Clovis had short interest of about 31%. Inovio Pharmaceuticals, which works on using synthetic DNA products to treat cancer and infectious diseases, had 26% short interest.

The S&P 500’s health care sector is lagging behind the gains on the broader S&P 500 index so far this year. Other areas of the market are finding more favor than the defensive health care sector as increasing COVID-19 vaccinations and fiscal stimulus boost prospects for reopening businesses across the country. The sector has advanced 7% compared with the S&P 500’s climb of 11%.

The top 10 most-shorted stocks stepped higher by nearly 45% when the year started to early February but have since suffered a decline of roughly 14% on the year, said the S&P report.

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