Rising Drug Costs to Be in Focus at Congressional Hearing

Attention on Valeant Pharmaceuticals’ drug pricing led to examination of its use of a mail-order pharmacy that helped patients get the company’s more expensive skin drugs. PHOTO: ASSOCIATED PRESS

In the spotlight: Valeant’s and other companies’ skyrocketing drug prices. PHOTO: ASSOCIATED PRESS

The Wall Street Journal; December 5, 2015. Dramatic price increases for several medicines are scheduled to be the subject of a congressional hearing in the coming week. Companies including Valeant Pharmaceuticals International Inc. and Turing Pharmaceuticals AG have been under fire this year from doctors, patients and lawmakers over rising drug costs. Such increases have prompted investigations by congressional committees, and House Democrats have established a task force to probe drug pricing. On Wednesday, the Senate Special Committee on Aging is scheduled to hold a hearing further exploring the matter. 

The committee has been examining a new route that some drug companies have used to quickly boost sales, without a costly investment in research: Scoop up the rights to drugs already on the market and then drastically raise their prices.

The hearing aims to explore the roots of such price jumps, their impact on patients’ access to the drugs and “how current regulations and public policy may contribute to this problem,” the committee said.

Experts from Johns Hopkins University, University of Utah Health Care and the University of Alabama at Birmingham are among those scheduled to testify.

“There’s a line at which these huge price increases for prescription drugs go from rewarding innovation to price gouging and this hearing will set the stage for an examination of whether that line is being crossed. We’ll hear from experts about why these huge price spikes are occurring and what this looks like for patients and providers on the front lines,” said Sen. Claire McCaskill (D., Mo.), the Aging committee’s ranking member.

Among the price increases that have caught the committee’s attention are hikes of 525% and 212% that Valeant took for two cardiac-care drugs the day the company secured the drugs’ rights early in the year, the subject of a Wall Street Journal article in April.

Last month, the committee asked Retrophin Inc. to provide documents about its licensing the rights of a kidney-disease drug Thiola and then increasing the drug’s priceto $30 a tablet, from $1.50.

Likewise, Turing was asked for documents and other information about how it bought the rights to a half-century-old antiparasitic drug called Daraprim in August and thenupped the price more than 50-fold to $750 a tablet. Democratic presidential candidate Hillary Clinton tweeted that the Daraprim increase was “price gouging.”

Meantime, attention on Valeant’s drug pricing led to examination of its use of a mail-order pharmacy that helped patients get the company’s more expensive skin drugs.

Such public scrutiny has prompted drug companies to announce changes to their pricing practices.

Valeant’s CEO Michael Pearson has said the company will probably “pursue fewer, if any, transactions that are focused on mispriced products.” The company also has formed a board committee to look at its relationship, which it is terminating, with the mail-order pharmacy.

“We are cooperating with the committee’s review, including providing documents they requested,” said Laurie Little, a Valeant spokeswoman.

Last month, Turing said it would take several steps to cut the cost of Daraprim, including offering discounts of as much as 50% to hospitals.

Turing didn’t comment on the hearing. Asked about the criticism made by politicians, Turing CEO Martin Shkreli said at the Forbes Healthcare 2015 Summit this week: “Politicians love to beat up on guys who seem to be public enemies, if you will. That’s a great way to get elected.”

In September, the Purdue Research Foundation bought back the rights to tuberculosis drug Cycloserine that Rodelis Therapeutics had acquired and then increased in price to $10,800 for 30 pills, up from $480. The foundation then cut the price of a 30-pill blister pack to $1,050.

Rodelis didn’t respond to a request for comment, while Retrophin said it is cooperating with the Aging committee.

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