US senate panel hears harms of big price increases for off-patent drugs

At a hearing of the US Senate's Special Committee on Aging focused on price increases for some off-patent drugs, senators heard from experts about how sharp price increases for some medicines can affect patients and lead to supply problems. The hearing focused on two companies in particular, Turing Pharmaceuticals and Valeant Pharmaceuticals, which have both drastically raised the price of medicines shortly after acquiring them.

Committee chairwomen Senator Susan Collins noted that while companies should be rewarded for developing new drugs, the system "never anticipated companies acquiring off-patent drugs and then jacking up their prices to enormous heights." Meanwhile, Senator Claire McCaskill said "if this is just greed, we have a duty to figure out how to protect patients who need these medicines."

Ahead of the hearing, the Special Committee on Aging asked Valeant to justify price hikes enacted for the cardiovascular treatments Isuprel (isoproterenol) and Nitropress (nitroprusside) after acquiring the therapies in February. The panel also requested information from Turing concerning a price increase for the toxoplasmosis treatment Daraprim (pyrimethamine). The drugmaker acquired US marketing rights to Daraprim from Impax Laboratories earlier this year.

Speaking at the hearing, Erin Fox, a director at the University of Utah Health Care, indicated that the hospital is struggling to cope with Valeant's price increases. "If we continued to purchase the same amount of each drug, it would cost our organisation just over $1.6 million more for [Isuprel] and approximately $290,000 more for [Nitropress] compared to what we paid the previous year." Meanwhile, David Kimberlin of the University of Alabama, Birmingham noted that a course of Daraprim for a baby has risen from about $1200 to "no less than $69,000" since Turing's price increase. Kimberlin added that a liquid formulation needed for babies had become difficult to obtain due to Turing's distribution practices.

McCaskill suggested that Senate research has found that "dramatic price hikes are seemingly business as usual for Valeant." Collins remarked "the companies we're investigating look more like hedge funds than they do traditional pharmaceutical companies," and called the price hikes egregious and offensive.

In response to the investigation, Valeant said it was cooperating with the committee, including providing requested documents. "Valeant markets more than 200 prescription drugs...so broad conclusions about the company's pricing cannot be drawn from any one drug or set of drugs," spokeswoman Laurie Little remarked. Meanwhile, Turing said it was committed to making sure that no patient was denied access to Daraprim, with the company recently announcing that it will offer reductions on the drug's cost of up to 50 percent for hospitals.

Commenting on the matter, Chip Davis, CEO of the Generic Pharmaceutical Association, said "Congress must avoid addressing outlier pricing actions taken by individual companies with sweeping policies that restrict patient access or invite other unintended consequences." Davis warned that "several suggestions floated [at the hearing] could compromise patient safety if adopted," citing mass compounding of drugs and importing foreign medicines.

For related analysis, see ViewPoints: HHS forum suggests change is coming on drug pricing – but not today (or tomorrow) and FirstWord Lists: Framing the US drug pricing debate – the key flashpoints.

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