Top Elizabeth Warren Donor Profits Off Rising Drug Prices

Warren regularly lambasts drug companies, introduced legislation on rising costs

Elizabeth Warren / Getty Images
February 1, 2019

A firm founded by a top donor to Sen. Elizabeth Warren's action fund, campaign committee, and leadership PAC profits off prescription drugs including those that the Massachusetts senator regularly chastises for hiking prices on consumers.

Warren for years has been outspoken against the drug industry and has had "big pharma in her crosshairs" while simultaneously introducing numerous pieces of legislation in attempts to tackle the rising prices of the industry.

"Over the last 10 years, some of the wealthiest drug companies—those that capitalize on government research to generate billions of dollars in revenues through the sale of blockbuster drugs—have found another way to boost profits," Warren said in 2015. "They’ve been caught defrauding Medicare and Medicaid, withholding critical safety information about their drugs, marketing their drugs for uses that aren’t approved, and giving doctors kickbacks for writing prescriptions for their drugs."

Warren slammed pharma giant Pfizer in November 2018 for hiking prices on prescriptions, saying that Pfizer "'promised' it wouldn’t raise prices, then turned around and raised them anyway," and added that "we can’t count on drug companies to tackle rising drug costs, so Congress must." The Massachusetts senator sent an earlier letter asking if they planned to raise costs and inquired into if they had lobbied the Trump administration on its proposals.

Warren additionally spearheaded the Capping Prescription Costs Act of 2018, which "tackles high drug costs faced by families placing a monthly cap on their out of pocket drug costs." In December 2018, Warren introduced bicameral legislation alongside Rep. Jan Schakowsky (D., Ill.) to address the "skyrocketing" costs of prescription drugs that proposed government manufacturing of generic drugs.

As Warren publicly knocked big pharma and pushed legislation against the industry, a firm run by a top donor to her action fund, campaign committee, and leadership PAC quietly profited off rising costs in the industry.

Pablo Legorreta, a former Wall Street investment banker who founded and acts as the chief executive officer of Royalty Pharma LLC, a New York City-based private equity firm, poured $10,800 into the Elizabeth Warren Action Fund. The $10,800 donation was one of the largest to the fund this past election cycle, according to filings.

Legorreta also contributed the maximum $5,400 to Elizabeth for Massachusetts, Warren's campaign committee, and $5,000 to PAC for a Level Playing Field, Warren's leadership PAC, around the same time.

Legorreta's firm has banked off top-selling drugs and the skyrocketing costs of prescriptions, according to reports.

Royalty Pharma has amassed an investment portfolio valued north of $15 billion by buying the rights to royalties on future drug sales, the New York Times wrote last year.

The report indicated that Royalty had partial rights in seven of the top 30 selling drugs in the country—including Humira, the highest selling drug, and Remicade, the fourth highest selling drug—and has dodged public scrutiny that other companies could not.

Royalty buys royalty rights to drugs from the likes of patent holders or universities after regulators approve them for sales.

"In recent years, Royalty Pharma’s deals have grown larger," the Times writes. "In 2014, it agreed to pay $3.3 billion to an affiliate of the Cystic Fibrosis Foundation for rights to the drug Kalydeco and other treatments for cystic fibrosis marketed by Vertex Pharmaceuticals. Last year, Royalty Pharma paid $1.14 billion to the University of California, Los Angeles, and co-owners of the rights to Xtandi, which treats advanced prostate cancer. This year, it agreed to pay up to $2.85 billion to Perrigo for rights to the multiple sclerosis drug Tysabri."

Royalty's portfolio—which the firm calls "unparalleled" in the industry—additionally contains at least partial rights in many drugs that are marketed by Pfizer, who Warren regularly uses in her line of attacks on the drug industry. Those drugs include Lyrica, Ibrance, Xtandi, and Bosulif.

An inquiry sent to Royalty Pharma for Legoretta about his contributions to Warren was not returned by press time. Warren's campaign also did not respond to requests for comments on the donations from Legoretta as the senator has chastised rising drug prices in the industry.

Warren was not the only Democrat that received money from Legorreta this past election cycle. Legorreta gave a total of $101,200 to Democratic campaigns, funds, PACs, and state parties throughout the cycle.