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The new drug looked so promising except for that one warning sign.

This story also ran on Fortune. It can be republished for free.

At the American College of Rheumatologys annual meeting in 2008, Duke Universitys Dr. John Sundy proudly announced that pegloticase, a drug hed helped develop, was astoundingly effective at treating severe gout, which affects perhaps 50,000 Americans. In about half of those who had taken it, the drug melted away the crystalline uric acid deposits that encrusted their joints to cause years of pain, immobility, or disfigurement.

But Sundy also disclosed an unsettling detail: In one clinical trial, patients who got the drug were more likely to develop heart problems than those who didnt. The day after Sundys talk, the stock price of Savient Pharmaceuticals, which developed the drug with Duke scientists, plunged 75%.

That danger signal would disappear in later studies, and the FDA approved pegloticase, under the trade name Krystexxa, two years later. But the small biotech company never recovered. In 2013, Savient was sold at auction to Crealta, a private equity venture created for the purpose, for $120 million.

Two years later, a young company now called Horizon Therapeutics bought Crealta and its drug portfolio for $510 million.

Even at that price, it proved a good deal. Krystexxa brought in $716 million in 2022 and was expected to earn $1 billion annually in coming years.

Although Horizon says it now has 20 drugs under development, in its 15 years of existence it has yet to license a product it invented. Yet the company has managed to assemble a war chest of lucrative drugs, in the process writing a playbook for how to build a modern pharmaceutical colossus.

As the White House and both parties in Congress grapple with reining in prescription drug prices, Horizons approach reveals just how difficult this may be.

Horizons strategy has paid off handsomely. Krystexxa was just one of the many shiny objects that attracted Amgen, a pharmaceutical giant. Amgen announced in December that it intends to buy Horizon for $27.8 billion, in the biggest pharmaceutical industry deal announced in 2022.

Horizons CEO, Tim Walbert, who will reportedly get around $135 million when the deal closes, has mastered a particular kind of industry expertise: taking drugs invented and tested by other people, wrapping them expertly in hard-nosed marketing and warm-hued patient relations, raising their prices, and enjoying astounding revenues.

Hes done this with unusual finesse courting patients with concierge-like attention and engaging specialist clinicians with lunches, conferences, and research projects, all while touting his own experience as a patient with a rare inflammatory disease. Walberts company has been particularly adept at ensuring that insurers, rather than patients, bear the costly burdens of his drugs.

A federal prosecutor in 2015 began examining allegations that Horizons patient assistance program had worked with specialty pharmacies to evade insurers efforts to shun Horizons expensive drugs. A separate probe opened in 2019 over alleged kickbacks to pharmacy benefit managers, companies that negotiate to get Horizons drugs covered by insurers. Those investigations appear to be no longer active, Horizon spokesperson Catherine Riedel said. The company this year disclosed a third probe, concerning methods the company allegedly used to get prior authorization of its drugs. Justice officials did not respond to requests for comment on the investigations. Email Sign-Up

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An Injection of Marketing

To help sell its drugs, Horizon blankets specialist physicians with marketing and peer-to-peer appeals. Its payments to physicians for things like consulting, speeches, and meals totaled $8.7 million in 2021, compared with the $10 million it paid them for research, federal records show. By contrast, Seagen, a biotech company of roughly the same size, paid doctors a total of $116 million, with nearly $112 million of that pegged for research. Riedel said Horizons marketing and educational approaches were necessarily unique because of the challenges of treating rare and neglected diseases.

Walbert launched Horizon in 2008 in the Chicago area by combining and refashioning generic drugs into single pills. Duexis, Horizons first drug, is a mixture of generic Motrin and Pepcid. Its Vimovo combines generic Aleve and Nexium. In a 2017 article, a ProPublica reporter described being prescribed Vimovo for a shoulder injury. It cost him nothing, but his insurer was billed $3,252 for pills that together cost about $40 for a months supply in generic form. Horizon sold more than $57 million worth of Vimovo that year.

In 2014 and 2015, respectively, Horizon picked up two relatively new drugs that had no generic versions: the immunosuppressant Actimmune and Ravicti, which treats a rare genetic disorder. Soon Horizon was charging more than $50,000 a month for each, placing Actimmmune fourth and Ravicti second on GoodRxs 2020 list of the most expensive U.S. drugs.

Horizons net sales soared from $20 million in 2012 to $981 million in 2016; Walberts pay package followed suit, topping an astronomical $93.4 million in 2015 in salary and stock. Stock analysts questioned the long-term soundness of a strategy of simply selling old drugs for mind-boggling prices, but Walbert was using the cash to refashion the company as a rare-diseases franchise.

His approach would make Walbert a darling of pharmaceutical investors and his board, which lavished him with over $20 million in compensation each of the past three years. While most biotechs and startups borrow heavily from venture capital to do science and have no idea how to develop and market a drug, Walbert got cash coming in quickly. He did it backwards, said Annabel Samimy, an analyst at Stifel Financial Corp. Horizon built commercial platforms before they got into drug development.

Generating robust sales of what sounded like not very interesting drugs allowed Walbert to start a company on not very much, said Oppenheimer analyst Leland Gershell. All the while, Horizon funded and cultivated the patient advocacy groups that can help lobby for a drug to be approved by the FDA and placed on insurers formularies, the lists of drugs health plans cover for patients.

Capitalizing on His Own Illness?

As Walbert and his spokespeople often point out, Walbert and his youngest son suffer from a rare disease, and Walbert also has an autoimmune disease. Walbert wont name the diseases, but has said hes taken the anti-inflammatory injectable Humira since 2003 the year he led that drugs commercial launch as a vice president at Abbott Laboratories. Humira has become the bestselling drug in history, with about $200 billion in all-time global sales.

In 2014, Walbert moved Horizons headquarters to Ireland, which nearly halved its tax rate. A year later it gained control of Krystexxa, and in 2017 it bought, for $145 million, a failing company that produced Tepezza, a drug for thyroid eye disease, which causes unsightly eye bulging and pain.

Tepezza quickly became a blockbuster, with $3.6 billion in total sales in 2021 and 2022. The company conducted additional clinical research on both Tepezza and Krystexxa, but it also spent heavily promoting these and other drugs to specialists who could prescribe them.

All the while it steadily raised prices. Savient put Krystexxa on the market in 2011 at $2,300 per injection. Horizon charges roughly 10 times as much. Six months of Tepezza treatment can run more than $400,000.

Horizons publicity emphasized the companys sensitivity to patients, and its constant contact with disease advocates.

Our scientists are attuned to the unmet needs of patients, their diagnostic and therapeutic journey, Bill Rees, Horizons vice president for translational sciences, told KFF Health News. Its the marrying of the basic clinical science with a focus on the needs of the patient that differetiates us.

To make sure patients keep using its drugs, clinicians say, Horizon staffers negotiate with insurance carriers, and the company offers drug discounts to lower-income patients while swaddling them with attention from its medical staff.

Horizon has a nurse talk to each and every patient before every appointment, said Dr. Brigid Freyne, who treats around half a dozen patients each year with Krystexxa at her Murrieta, California, rheumatology clinic. The patients who come in here are highly motivated to get their IV. They get the message that its very important and they are fortunate to get the medicine.

None of the manufacturers of her other infusion drugs shower patients with this kind of attention, she said.

While at Abbott, Walbert pioneered direct-to-consumer advertising for specialty drugs like Humira, a trend that aggravated insurers, who anticipated, correctly, that they would soon be shelling out billions for expensive drugs.

Horizons marketing plan for Krystexxa includes direct-to-consumer ads aimed at driving patients to specialists. The drug is designed for recalcitrant gout patients, who often have large lumps on their fingers, feet, and kidneys. Many, though not all, are heavy drinkers of beer or soda sweetened with high-fructose corn syrup, which can increase the buildup of uric acid, the cause of gout, said Dr. Robert McLean of Yale University.

While Krystexxa can help patients with advanced gout, the American College of Rheumatology views it as a drug of last resort, with plenty of cheaper, early intervention alternatives available.

I prescribe it maybe once a year, McLean said. From a cost-effectiveness standpoint, it warrants questioning.

Horizon recently started a publicity campaign addressed to all gout sufferers, urging them to see a rheumatologist or a nephrologist the specialists it has targeted with Krystexxa educational materials before the disease does too much harm.

Horizon would like you to say, Everyone with serious gout should be started on Krystexxa, said Dr. James ODell, a rheumatologist at the University of Nebraska Medical Center. The Horizon pitchmen he deals with are nice guys, but we dont believe thats the best way.

The company defends its marketing practices. We learn what matters most to patient communities and act. This approach has been validated by independent third-party research, said Riedel.

The Federal Trade Commission said in January it was seeking more information on the Amgen-Horizon merger. Sen. Elizabeth Warren (D-Mass.), citing high prices for Horizon and Amgen drugs, urged the agency to nix the deal.

Arthur Allen: ArthurA@kff.org, @ArthurAllen202 Related Topics Health Care Costs Health Industry Pharmaceuticals Drug Costs Prescription Drugs Contact Us Submit a Story Tip

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Technology

Here’s where Apple makes its products — and how Trump’s tariffs could have an impact

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Here's where Apple makes its products — and how Trump's tariffs could have an impact

Apple’s iPhone 16 at an Apple Store on Regent Street in London on Sept. 20, 2024.

Rasid Necati Aslim | Anadolu | Getty Images

Apple has made moves to diversify its supply chain beyond China to places like India and Vietnam, but tariffs announced by the White House are set to hit those countries too.

U.S. President Donald Trump laid out “reciprocal tariff” rates on more than 180 countries on Wednesday.

China will face a 34% tariff, but with the existing 20% rate, that brings the true tariff rate on Beijing under this Trump term to 54%, CNBC reported. India faces a 26% tariff, while Vietnam’s rate is 46%.

Apple was not immediately available for comment when contacted by CNBC.

Here’s a breakdown on Apple’s supply chain footprint that could be affected by tariffs.

China

The majority of Apple’s iPhones are still assembled in China by partner Foxconn.

China accounts for around 80% of Apple’s production capacity, according to estimates from Evercore ISI in a note last month.

Around 90% of iPhones are assembled in China, Evercore ISI said.

While the number of manufacturing sites in China dropped between Apple’s 2017 and 2020 fiscal year, it has since rebounded, Bernstein said in a note last month. Chinese suppliers account for around 40% of Apple’s total, Bernstein said.

Evercore ISI estimates that 55% of Apple’s Mac products and 80% of iPads are assembled in China.

India

Apple is targeting around 25% of all iPhones globally to be made in India, a government minister said in 2023.

India could reach about 15%-20% of overall iPhone production by the end of 2025, Bernstein analysts estimate. Evercore ISI said around 10% to 15% of iPhones are currently assembled in India.

Vietnam

Vietnam has emerged in the past few years as a popular manufacturing hub for consumer electronics. Apple has increased its production in Vietnam.

Around 20% of iPad production and 90% of Apple’s wearable product assembly like the Apple Watch takes place in Vietnam, according to Evercore ISI.

Other key countries

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Politics

Alabama, Minnesota lawmakers join US states pushing for Bitcoin reserves

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Alabama, Minnesota lawmakers join US states pushing for Bitcoin reserves

Alabama, Minnesota lawmakers join US states pushing for Bitcoin reserves

Lawmakers in the US states of Minnesota and Alabama filed companion bills to identical existing bills that if passed into law, would allow each state to buy Bitcoin.

The Minnesota Bitcoin Act, or HF 2946, was introduced to the state’s House by Republican Representative Bernie Perryman on April 1, following an identical bill introduced on March 17 by GOP state Senator Jeremy Miller.

Meanwhile, on the same day in Alabama, Republican state Senator Will Barfoot introduced Senate Bill 283, while a bi-partisan group of representatives led by Republican Mike Shaw filed the identical House Bill 482, which allows for the state to invest in crypto, but essentially limits it to Bitcoin (BTC).

Twin Alabama bills don’t explicitly name Bitcoin

Minnesota’s Bitcoin Act would allow the state’s investment board to invest state assets in Bitcoin and other cryptocurrencies and permit state employees to add crypto to retirement accounts.

It would also exempt crypto gains from state income taxes and give residents the option to pay state taxes and fees with Bitcoin.

Alabama, Minnesota lawmakers join US states pushing for Bitcoin reserves

Source: Bitcoin Laws

The twin Alabama bills don’t explicitly identify Bitcoin, but would limit the state’s crypto investment into assets that have a minimum market value of $750 billion, a criterion that only Bitcoin currently meets.

26 Bitcoin reserve bills now introduced in the US

Introducing identical bills is not uncommon in the US and is typically done to speed up the bicameral legislative process so laws can pass more quickly.

Bills to create a Bitcoin reserve have been introduced in 26 US states, with Arizona currently the closest to passing a law to make one, according to data from the bill tracking website Bitcoin Laws.

Alabama, Minnesota lawmakers join US states pushing for Bitcoin reserves

Arizona currently leads in the US state Bitcoin reserve race. Source: Bitcoin Laws

Pennsylvania was one of the first US states to introduce a Bitcoin reserve bill, in November 2024. However, the initiative was reportedly eventually rejected, with similar bills also killed in Montana, North Dakota, South Dakota and Wyoming.

Related: North Carolina bills would add crypto to state’s retirement system 

Law, Bitcoin Regulation, United States, Policy, Bitcoin Reserve

Montana, North Dakota, Pennsylvania, South Dakota and Wyoming are the five states thathave rejected Bitcoin reserve initiatives. Source: Bitcoin Laws

According to a March 3 report by Barron’s, “red states” like Montana have faced setbacks to the Bitcoin reserve initiatives amid political confrontations between the Democratic Party and the Republican Party.

Additional reporting by Helen Partz.

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

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Environment

Hyundai’s super-efficient Ioniq 6 updated with sportier look, ‘N’ model coming soon

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Hyundai's super-efficient Ioniq 6 updated with sportier look, 'N' model coming soon

Hyundai has unveiled the design refresh of its Ioniq 6 sedan, and announced that it will become a family of cars rather than a single model, with an N Line trim and upcoming N performance model, much like its sister car the Ioniq 5.

Hyundai has been doing great with its EVs lately, hitting sales records and getting great reviews.

Much of that focus has been on the Ioniq 5, an attractive crossover SUV with lots of capability at a good price – and a bonkers N performance version which has been breaking different kinds of records.

The Ioniq 6, conversely, hasn’t attracted quite as much attention, even though it has some records of its own (it’s the most efficient vehicle in the US… for under $70k).

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Between its admittedly odd looks – much more aerodynamic and rounded than the comparatively blocky 5 – and it fitting into the less-popular (but better) sedan form factor, it just hasn’t captured as much imagination as the 5.

It has also fallen somewhat behind. The Ioniq 5 got a big update this year, including a native NACS port, the first non-Tesla mass market vehicle to hit the road with one of these included (and it even charges faster than a Tesla does on home turf). The 6, however, is still sitting on its original design from when it first started production/shipping in 2022/23.

But that’s about to change, as Hyundai is giving the model some love with a design update and some hints at new things to come.

We’ve seen spy shots of these design updates before, but now Hyundai is showing them to everyone at the Seoul Mobility Show.

Hyundai showed two models today, the standard Ioniq 6 and the “N Line,” an upgraded trim level with some interior and exterior changes to look a little more sporty. Hyundai has used similar nomenclature for its other models, and that carries over here.

Both have a redesigned front end, making it look more aggressive than the prior bulbous and aerodynamic shape, and narrower headlights.

The N Line looks even more aggressive than the standard model, though, with an even more aggressive front and rear end.

Hyundai says that the redesign will also include interior enhancements for “a more comfortable, intuitive experience,” with a redesigned steering wheel, larger climate control display, upgraded materials and redesigned center console with more physical controls.

Beyond this, the refresh was light on details – intentionally, with a full unveil of specs and changes coming later. We can imagine a lot of the improvements on the 2025 Ioniq 5 will be carried over, such as a native NACS port for example, and potentially a slightly larger or faster-charging battery.

We had also previously heard hints that an N version (yes, “N” and “N Line” are different, no, we don’t know why they used these confusing names) of the Ioniq 6 is coming, and Hyundai reiterated those hints today – even giving us a glimpse of the car in the background of one of its shots.

Now THIS one looks quite aggressive, with a bigger double wing and potentially some changes to the diffuser (it’s hard to tell from the shot, as the N Line also has a modified diffuser).

The ioniq 5N has earned rave reviews from enthusiasts for its bonkers driving dynamics and comparatively reasonable price for a true performance vehicle. But it’s still an SUV format, and frankly, an SUV will never be a sportscar no matter how many horsepower you put into it (I will die on this hill).

The 6, however, with its sedan shape and footprint, could make for a much more compelling sports package once it’s all put together. So we’re very excited to see what Hyundai can do if they apply the same magic they put into the 5 into a new 6N. Looking forward to July.


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