Senate Investigating Drug Companies Behind Huge Overnight Price Hikes

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A handful of pharmaceutical investors have been snapping up the rights to previously affordable prescription drugs, only to immediately raise prices to the point where patients now pay hundreds of dollars for a single pill — resulting in huge additional costs for consumers, insurers, and healthcare providers. Not only has this practice drawn the ire of the medical community, it’s also resulted in a Senate committee investigation.

Yesterday, the Senate Special Committee on Aging sent letters requesting documents from four pharmaceutical companies regarding their sky-high price increases on certain prescription drugs.

“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,” said Sen. Claire McCaskill (MO), ranking member of the committee. “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. I’m proud to help lead this bipartisan investigation so that we can find some answers the public wants and deserves.”

The committee sent letters to the following:

• Turing Pharmaceuticals [PDF]: After Turing acquired the rights earlier this year to Daraprim — an anti-parasitic used to treat malaria and toxoplasmosis — the per-pill price skyrocketed from $13.50 to more than $750. Turing defended the price hike by saying it was going to use the money to invest in research for a better drug to treat the same diseases. But some physicians countered that Daraprim has been used for 60 years and there is no urgent need for a replacement.

• Rodelis Therapeutics [PDF]: This Georgia company recently acquired the rights to sell Seromycin — used in the treatment of drug-resistant tuberculosis. After that acquisition, the per-pill price increased from around $17 to $360, meaning a patient who needs 30 pills would be on the hook for $10,800.

• Retrophin Inc [PDF]: Charging $30/pill for kidney disease drug Thiola may not seem like much compared to some of the other drugs in this story, but consider that this same drug only cost $1.50/pill before Retrophin licensed the rights to sell it.

• Valeant Pharmaceuticals [PDF]: The committee requested information on three different drugs that saw significant price increases immediately after Valeant acquired their rights. In a single day, the cost of cardiac arrest treatment Nitropress rose by 625%, from $215/vial to $1,346. Another cardiac drug Isuprel experienced a more drastic 820% price increase — from $180 per ampule to $1,472. The third Valeant drug, Cuprimine, is used for the treatment of Wilson’s disease. Its price soared from $8.88/capsule to $262/capsule, an increase of more than 2,900%.

The companies have all been asked to provide the requested information by Dec. 2, and to schedule a time to confer with committee staff.

“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. 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,” said committee chair Sen. Susan Collins of Maine. “Given the potential harm to patients across our country who rely on these drugs for critical care and treatment, the Senate Special Committee on Aging considers these massive price increases worthy of a serious, bipartisan investigation into the causes, impacts, and potential solutions.”

by Chris Morran via Consumerist