[music]

Janae Pierre: Hi welcome back to The Takeaway. I'm Janae Pierre in for Melissa Harris-Perry.

[music]

Medication abortions are the most common method in the US for terminating a pregnancy. As of 2020, they account for 53%. The overwhelming evidence shows that taking the abortion pill up to 10 weeks in pregnancy is safe and effective. When the FDA recently moved to allow retail pharmacies to sell the abortion pill, it seemed like an important step forward for abortion rights, but a case currently winding through the lower federal courts has the potential to overturn access to the abortion pill nationwide. Conservative anti-choice activists are aiming to reverse the FDA approval of one of the drugs used in medication abortions, Mifepristone. The FDA approved Mifepristone back in 2000, but that isn't the beginning of this story.

Hannah Levintova: In 1993, after Bill Clinton got elected, he lifted a ban on a product that was called RU486, a pill developed in France that constituted a medication abortion had been banned under the past few administrations. Clinton lifts the ban which sort of starts a race in the US to try to figure out a way to get it to American women.

Janae Pierre: This is Hannah Levintova, the reporter at Mother Jones.

Hannah Levintova: The French company that made it had no desire to get into abortion politics in the US. They were like, "Absolutely not. We're not touching this."

Janae Pierre: Keep in mind, this is 1993, the year of the first known killing of an abortion provider. Dr. David Gunn was shot outside of a clinic in Florida. It's also the year that Dr. George Tiller was first shot and survived. He would later be murdered in 2009. The violence against abortion providers was escalating throughout the 90s, including bombings, arson, and acid attacks. Many companies and government agencies were reluctant to take part in the race.

Hannah Levintova: The Population Council or reproductive rights nonprofit in the US started negotiations with the French company to get the patent from them for the pill, so that they could then go ahead and find someone in the US to retell it.

Janae Pierre: Another effort was helmed by an underground network of abortion rights activists. They smuggled the abortion pill into the US to try and reverse engineer the drug.

Hannah Levintova: They created an underground drug lab in Westchester County in New York, and they did successfully recreate it.

Janae Pierre: A secretive group of private investors saw the struggle for abortion access as a lucrative opportunity. They decided to get involved. Hannah's story is in the upcoming issue of Mother Jones and it's online now. It's called The Abortion Pill's Secret Money Men.

Hannah Levintova: The Money Men are a group of investors who banded together with the hopes of concealing their identities and decided to invest in the creation of the abortion pill in the United States. A lot of those names are still not public. The only reason that I know some of them is because a group of those investors have been suing each other and as a result, their identities became public. The first one of them was an investor named Joseph Pike. He actually had invested in the creation of the IUD. He found another investor, Brad Daniel, who ran a number of sort of small pharmaceutical hedge funds and things like that.

Brad Daniel had a small private equity fund and through that fund created a vehicle for investors to put money into the creation of something called Danco Labs. Danco Labs is to this day, one of the only companies in the United States that makes Mifepristone, but keep in mind at this time, none of this was in the news. I created a like a Russian nesting doll of sub-entities registered all over the world, so Cayman Islands, Delaware, California with the purpose of obscuring investors' identities, because all of these investors really anyone who was putting their money into this was afraid of having their name associated with abortion in any way.

Janae Pierre: How is the way that Mifepristone was funded and developed in the United States different from the process for other drugs?

Hannah Levintova: With a drug that has the potential to be used by a lot of people like this one, the federal government might help with the initial research, and then kind of mainstream pharmaceutical companies will come in and take it to the finish line. Because of the anti-abortion climate in the 1990s, that was not happening here. Private equity, private investors will usually only get involved if it's kind of a rare disease drug which is classified as a drug with 200, 000 cases a year or less.

Obviously, medication abortion is not a rare disease drug. The time in the '90s that this was being developed, more than one and a half million abortions were happening a year. The potential here was enormous, but because of the political climate because there was much violence happening at abortion clinics with doctors being hurt or killed or clinics being bombed, there was no mainstream interest in investing in this and so the private investors came in and did this instead.

Janae Pierre: How did these investors really impact the making and distribution of Mifepristone?

Hannah Levintova: They sort of created the system themselves and they created a ton of secrecy around it that persists to this day at Danco Labs. All that's really known is that they have an office somewhere in Manhattan. No one knows where it is. Danco retails the pill, but no one knows who their manufacturer is. They created a financial structure around the pill that, again, was sort of made up completely by them and allowed their investors to make a lot of money doing this.

Janae Pierre: Hannah, I want to be a little bit more specific. I mean, how lucrative did investing turned out to be for these men?

Hannah Levintova: A lot of the actual numbers are redacted and the court filings, so I had to do a bit of back-of-the-napkin math for this reporting. That's my caveat. In the court filings, they do say that, for example, Greg Hawkins, one of the biggest investors, he's the hedge fund guy, the court filings say that he may have made about 228% on his investment. Doing a bit of back of the napkin math, if I look at how much or initially he put in, that comes through somewhere between $20 and $25 million that he's made. On average in court filings, they say investors have made about 452%, in the 23 years that this venture has existed. A pretty hefty return.

Janae Pierre: How did the overturning of Roe v. Wade impact their investments and their wealth.

Hannah Levintova: It is clear that the investment is valuable enough, particularly in this new climate post Roe, that some of the main investors, specifically Daniel and Hawkins, are continuing to fight about it in court. One of the most recent cases, they're essentially fighting for more control of the company, more control of the business, how much money goes into the product itself versus back to the investors. That's one of the main elements of control. They're continuing to fight about that in court. O course, the fact that the FDA has now allowed retail pharmacies to sell medication abortion points to this product getting even more profitable.

[music]

Janae Pierre: Stick with us, there's more about the abortion pills, secret money men right after this.

[music]

I'm Janae Pierre and I'm speaking to Hannah Levintova about her Mother Jones story called The Abortion Pill's Secret Money Men, there's been much secrecy. Has there been anything illegal going on here?

Hannah Levintova: Not that I can see. No. I've reported on private equity for a while now and a lot of what private equity is able to do, the way that they're able to function is completely legal, but it's quite extractive. That's sort of one of the main reasons why a lot of parties on the left will often call for reforming private equity, reforming how they're taxed, reforming how they're allowed to do business, because it's totally legal. As far as I can tell, they haven't broken any rules.

Janae Pierre: Is it more investment in the abortion pill good for the public?

Hannah Levintova: I think that's the key nuance in this story. There's no question that at the time that these investors put their money, and it's a lot of money, millions of dollars, [unintelligible 00:09:15] into medication, abortion, no one else wanted to. They really did help bring this pill to the American public. At the same time, they then made business choices about how much money to keep for themselves that I think are important to look at and to question. The cost of producing this pill is not very high. If you look at sort of data from around the world, it's a fairly cheap pill to make. I think the choices that are made about how to price the pill, how much to keep versus how much to reinvest into access, those are the questions that we should be asking.

Janae Pierre: We're also we've seen private equity capitalize on crises in health care.

Hannah Levintova: Private equity investment in the entire healthcare sector has grown exponentially in the last decade or so. One of the key places has been in healthcare businesses that are focused on the elderly. There's an obvious demographic reason why those businesses are going to get even more clientele and even more profitable going forward. Studies have shown that this private equity investment in eldercare in particular is not always a net good. A group of business school professors actually did a study where they looked at thousands and thousands of nursing homes, private equity owned nursing homes versus ones that were not owned by private equity.

Keep in mind, this is a study by business school professors. These are like very reserved numbers, people crunching data, not activists. Their results were honestly staggering. Controlling for everything else, they found an increase in mortality for patients that were at the private equity owned nursing homes while at the same time finding that those same homes were actually charging Medicare, charging taxpayers more, so they were charging more money making more money while treating patients worse.

Janae Pierre: What can we learn from your story about the future of healthcare and medicine here in the US?

Hannah Levintova: When private equity invests in a space that's very regulated, that has a lot of government involvement, like health care, that is often where the negative impacts surface the most. These are critical social goods that have a lot of government support and government involvement for a reason because they're essential. They're not like fast food or equinox, or like a good that's a luxury, they are essential to everyone.

Remember that private equity is set up in a way where their main incentive is to make a lot of money quickly. We should be very wary of those financialization incentives, of those extreme profit motives entering into spaces like healthcare that are meant to serve people at their most vulnerable. These are investments by one of the least transparent corners of finance in the most vulnerable moments of our lives.

In a woman's decision to terminate a pregnancy for whatever reason, in a child's decision to put their ageing relative in a nursing home, I think that the intersection of motive to make a lot of money quickly and deeply vulnerable population seeking care is just something that requires a lot of constant oversight from us as journalists, from regulators, and so forth.

Janae Pierre: Hannah Levintova is a reporter at Mother Jones covering private equity. Her recent story is The Abortion Pill's Secret Money Men. Hannah, thanks so much.

Hannah Levintova: Thank you so much, Janae. It was a pleasure.

[music]

Copyright © 2023 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.