$28m for Vertex boss as CF patients f ight on
THE CEO of Vertex, the company behind controversial Cystic Fibrosis drug Orkambi, took a 23% pay cut last year following criticism from shareholders – but still received $28m.
Jeffrey Leiden, 60, who’s been chairman, president and CEO of Boston-based Vertex since 2012, was paid $4.8m in salary along with non-equity incentives, plus restricted stock and options valued at $23.3m.
As CF sufferers and the Irish Government demand that Vertex lowers the price of the lifealtering Orkambi – which would currently cost €160,000 per patient – Mr Leiden splits his time between multi-million dollar homes in Boston, Cape Cod and Florida.
His high salary and bonus payments haven’t gone unnoticed either with a leading lung disease specialist in the US criticising Vertex’s hefty payouts.
Dr Brian P. O’Sullivan, of Dartmouth-Hitchcock children’s hospital in New Hampshire, told the Irish Mail on Sunday: ‘The company is in a new building, they are not living in sub-standard housing. The money paid for Orkambi is not all going back into research.’
The total value of Mr Leiden’s 2015 pay package was down significantly from the $36.6m he collected the previous year, based on the company’s valuation methods. A report by advisory firm Institutional Shareholder Services Inc. (ISS) sparked significant outrage when it valued the CEO’s 2014 compenstion at $45.8m, because it calculated the value of the stock over a longer period of time. The report labelled that remuneration ‘excessive’ and ranked it as the 40th-highest payout among CEOs at US public companies in the States that year. Mr Leiden’s pay package last year was lower thanks to compensation changes at Vertex; he and the other top five executives collected $66m in total compensation in 2015, down from $91m the year before. The Irish Government has come under increasing pressure to make an agreement with Vertex, with the HSE assessing the drug at €30,000 – around a fifth of the current price. Both sides will resume negotiations on Wednesday, and Health Minister Simon Harris used his social media account to call for innovative and meaningful efforts. However, he will not be attending the talks as per the usual protocol.
Dr O’Sullivan added: ‘The thing that really gets to me about this drug is that so many CF patients fundraised for the original research – doing silly things like bake sales, walkathons and skitrips. The people who raised that money now need the drug, so they are paying twice.’
Asked about the efficiency of Orkambi, Dr O’Sullivan replied: ‘It has some benefit and may show more over time. I don’t want to take away from it, what looks to be a benefit is a decrease in exacerbations over time but it’s early to be sure. Something that decreases exacerbations is likely to preserve lung function better over time. But the price seems out of line with the known benefits.’
American scientist Prof. Paul M Quinton – himself a CF patient who used Orkambi through a trial – has been campaigning since 2013 against the high cost of the drug. He said: ‘I don’t think Orkambi gives a dramatic improvement. That is the basis of resistance to paying an incredibly high cost for a drug that is not showing a dramatic improvement.
‘It is doing some good, definitely, but why pay maybe ten times as much to stay healthy as to be without it?’ He called on Vertex to justify the cost, saying: ‘They should say this is why we need to spend this much on the drug, and lay it out transparently.’
In a statement, Vertex said: ‘Vertex has a long standing relationship with Dr Quinton and we appreciate his perspective.’