Senate, House Launch Investigations Into Rx Drug Price Hikes

The Senate's Special Committee on Aging on Wednesday initiated an investigation into steep prescription drug price increases by four drugmakers, the AP/New York Times reports (AP/New York Times, 11/4).

The companies under investigation are:

• Retrophin;
• Rodelis Therapeutics;
• Turing Pharmaceuticals; and
• Valeant Pharmaceuticals (Humer et al., Reuters, 11/4).

Details of the Price Increases

In August, Turing acquired the 62-year-old drug Daraprim, which is used to treat malaria and is considered as the standard of care for treating toxoplasmosis, a life-threatening parasitic infection. The company increased the drug's price by more than 5,000%, from $13.50 a tablet to $750 a tablet.

The decision sparked widespread condemnation from infectious disease specialists and politicians. Following the backlash, Turing CEO Martin Shkreli in September announced that that the company would lower the price "to a point that is more affordable and is able to allow the company to make a profit, but a very small profit."

Further:

• After Retrophin acquired the licensing rights for Thiola, a kidney disease drug, it increased the price per pill from $1.50 to $30 (Reuters, 11/4);
• After Rodelis acquired the drug Cycloserine, which is used to treat multidrug-resistant tuberculosis, it increased its price per 30 pills from $500 to $10,800; and
• After Valeant acquired the heart drugs Isuprel and Nitropress, it increased their prices by 525% and 212%, respectively (Diamond, California Healthline, 9/21).

Senate Investigation Details

The senators have called for a meeting with Shkreli "as soon as it is practicable," the AP/Times reports.

Sens. Susan Collins (R-Maine), who chairs the committee, and Claire McCaskill (D-Mo.) said a hearing has been tentatively scheduled for Dec. 9.

McCaskill in a statement said, "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," adding that some of the increases reflect "little more than price gouging" (AP/New York Times, 11/4).

Reaction

Turing said the company is "reviewing the committee's request" and "look[s] forward to having an open and honest dialogue about drug pricing" (AP/New York Times, 11/4).

Meanwhile, Chris Cline, director of investor relations at Retrophin, in a statement said, "Pharmaceutical pricing that strikes the right balance between affordability and enabling innovation is an issue of legitimate concern for patients and the industry."

In addition, Valeant said it plans to cooperate with the inquiry. In addition, company spokesperson Laurie Little noted that drug prices can change because of factors "including the cost of development and acquisition and complexities in the health care cost reimbursement system" (Reuters, 11/3).

House Investigation

In related news, House Democrats on Wednesday announced a new task force to investigate rising prescription drug costs, Modern Healthcare reports.

Rep. Elijah Cummings (D-Md.) is leading the effort. Earlier this year, Cummings and Sen. Bernie Sanders (I-Vt.), who is seeking the Democratic nomination for president, sent a letter to Valeant seeking an explanation for its price increases.

Cummings and 17 other Democratic members of the House Oversight and Government Reform Committee have asked for a Nov. 17 vote on subpoenas that would summon Shkreli and Valeant CEO J. Michael Pearson to provide documents about their companies' price increases.

In the letter, the lawmakers alleged that Committee Chair Jason Chaffetz (R-Utah) has refused to investigate the steep price hikes (Ross Johnson, Modern Healthcare, 11/4)

PhRMA Goes on the Offensive

Meanwhile, the Pharmaceutical Research and Manufacturers of America is arguing that insurers and regulators are to blame for increased costs, The Hill reports.

Amid the political backlash over prescription drug price hikes, Lori Reilly, PhRMA's executive vice president for policy, said, "Just looking at the list price doesn't tell the full picture of what's going on in the marketplace," adding, "We think it's fair to have a conversation about costs, but if we're going to do that, let's have a conversation about costs generally, and where costs in the health care system are coming from."

Further, drug company executives noted that drug costs could be increasing because insurers are requiring patients to cover more of the costs through higher deductibles and copayments.

In addition, Reilly said that the government approval process for new drugs has slowed down, while patents are expiring more quickly (Ferris, The Hill, 11/4).