Senate panel to investigate drug price hikes
A special congressional committee launched an investigation of pharmaceutical pricing Wednesday, focusing on recent medication cost hikes at four companies.
Amid cost complaints from patients and the medical community, the Senate Special Committee on Aging sent letters seeking information from Valeant Pharmaceuticals International (VRX), Turing Pharmaceuticals, Retrophin (RTRX) and Rodelis Therapeutics. The companies have been the subject of numerous media reports about drug pricing.
The panel plans to examine price increases on recently acquired off-patent drugs, as well as pharmaceutical industry mergers and acquisitions that in some cases have affected the cost of such medications. The committee also will explore the Food and Drug Administration's role in the approval process for generic drugs and the agency's distribution protocols.
"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," said committee chair Sen. Susan Collins, R-Maine, in a statement announcing the investigation.
Sen. Claire McCaskill, D-Mo., the committee's ranking minority member, said congressional action is needed because some recent drug price hikes "have looked like little more than price gouging."
The Senate panel's announcement follows Valeant's Oct.14 disclosure that federal prosecutors in Massachusetts and New York have subpoenaed the company for information about its drug pricing and distribution policies, as well has how it helps patients pay for the medications. The subpoenas also focused on information Valeant submitted to the Centers for Medicare and Medicaid Services.
Valeant has been under intense scrutiny after a report by activist short-seller Andrew Left's Citron Research alleged that the Canada-based drugmaker and one of its business partners apparently created a "network of phantom captive pharmacies" as part of a "fraud to create invoices to deceive the auditors and book revenue."
Valeant cuts ties with “phantom" pharmacy Philidor
The nation's three largest pharmacy benefit managers on Thursday ended all interactions with the Valeant partner, Philidor Rx Services, citing questions about the specialty pharmacy company's business practices. Valeant cut ties with Philidor on Friday, and said the Pennsylvania-based company would shut down.
The Senate committee's letter to Valeant Chairman and CEO J. Michael Pearson sought information about the company's recent acquisition of the rights to sell Isuprel and Nitropress, drugs used to treat cardiac arrests. The panel also sought information about Cuprimine, a medication used to treat Wilson's Disease, a rare disorder that causes excessive levels of copper to accumulate in vital organs.
The request focused on internal company records related to Valeant's 625% price hike for Nitropress, 820% increase for Isuprel and 2,949% price hike for Cuprimine.
The Senate committee's request to Turing Pharmaceuticals, the company founded and headed by former hedge fund manager Martin Shkreli, sought information about the New York firm's decision to raise the per-tablet price of infection-fighter Daraprim from $13.50 to $750. Amid public protests, the company on Tuesday said it would reduce the price by year's end.
San Diego-based biotech company Retrophin was founded to seek remedies for rare diseases by Shkreli, who was ousted in a corporate controversy last year. The Senate panel sought information about Retrophin's decision to raise the per-tablet price of Thiola, a drug used to treat kidney disease, from $1.50 to $30.
The Senate committee's letter to Rodelis Therapeutics sought information about the Georgia-based company's decision to raise the price for 30 pills of tuberculosis drug Seromycin from $500 to $10,800. Rodelis rescinded the increase in September and returned the Seromycin rights to the drug's previous owner.