Prescription Drug Pricing Under Senate Investigation

NOVEMBER 05, 2015
Meghan Ross, Associate Editor
The US Senate has launched a bipartisan investigation into prescription drug pricing, targeting Valeant, Turing Pharma, Retrophin, and Rodelis in particular. 

In a statement, Sens. Susan Collins (R-Maine) and Claire McCaskill (D-Missouri) raised concerns that drug price increases were often occurring for older, off-patent drugs after acquisitions or mergers of pharmaceutical companies.

“The sudden, aggressive price hikes for a variety of drugs used widely for decades affect patients and health care providers and the overall cost of health care,” Collins wrote in the statement.

“These substantial increases have the potential to inflate the cost of health care for Americans, especially our seniors, by hundreds of millions of dollars each year.”

In addition to investigations on price increases, the committee will also consider the FDA’s role in the drug approval process for generic drugs, distribution protocols, and its off-label regulatory regime.

Collins and McCaskill sent a letter to Turing CEO Martin Shkreli, who was recently in headlines for hiking the price of a toxoplasmosis drug called Daraprim.

After acquiring Daraprim, Turing increased the price of the 62-year-old drug by 5000% from $13.50 a tablet to $750.

Shkreli alleged that the price hike “was not excessive at all,” but later the company announced that it would lower the drug’s cost.

McCaskill and Collins’ letter to Shkreli indicated that they sought his cooperation so that the committee could “better understand drug pricing and related regulatory and public policy concerns,” and specifically mentioned Daraprim’s price increase.

In a letter to Valeant CEO J. Michael Pearson, the senators asked for documents surrounding the company’s recent acquisitions of the rights to sell Isuprel, Nitropress, and Cuprimine.

They noted that the price of Nitropress skyrocketed by 625% on the same day that Valeant bought the rights to the drug. Nitropress, which is used to treat cardiac arrests, jumped from $215.46 per vial to $1346 per vial.

Likewise, Isuprel’s price jumped 820% from $4489 for 25 0.2-mL ampules to $36,811.

The value of Cuprimine increased by 2949% from $888 for 100 250-mg capsules to $26,189.

Retrophin’s letter was focused on its license of the rights to sell Thiola from Mission Pharmacal Company and the increase of the kidney disease drug from $1.50 to $30 per tablet.

The letter to Rodelis targeted the company’s recent acquisition of cycloserine (Seromycin). Rodelis increased the price from $500 to $10,800, but eventually returned the rights to sell the drug to the Chao Center, which had originally sold the tuberculosis drug.

“Some of the recent actions we’ve seen in the pharmaceutical industry—with corporate acquisitions followed by dramatic increases in the prices of pre-existing drugs—have looked like little more than price gouging,” McCaskill said in a press release. “We need to get to the bottom of why we’re seeing huge spikes in drug prices that seemingly have no relationship to research and development costs.”

The Senate Special Committee on Aging, led by Collins and McClaskill, has scheduled an initial hearing for December 9, 2015. 


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