February 05, 2016
3 min read

House committee hearing investigates recent drug price hikes

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In a recent hearing, members of the House Committee on Oversight and Government Reform questioned representatives from Turing Pharmaceuticals and Valeant Pharmaceuticals on the recent market price increases of various off-patent medications.

The bipartisan committee also reviewed findings culled from more than 300,000 pages of documents obtained from the two companies, which included emails, revenue and profit analysis, communications with health care providers and public relations strategy documents. In addition, the committee discussed the prevalence of similar price increases within the pharmaceutical industry at large, according to a press release.

“These new documents provide an insider’s view into how drug company executives are lining their own pockets at the expense of some of the most vulnerable families in our nation,” committee ranking member Elijah E. Cummings, D-Md., said during the hearing. “These companies did not invest funds to research or develop these drugs. They bought them, jacked up the prices, took as much money as they could out of the pockets of patients, hospitals and others, and then put those funds into their own coffers.”

In her statement to the committee, Nancy Retzlaff, chief commercial officer at Turing, defended her company’s decision to increase the price of Daraprim (pyrimethamine), referencing ongoing research costs and various treatment discounts offered by Turing as justification for the pricing.

“After considering the extremely small patient population of approximately 3,000 patients per year, mandatory statutory discounts and rebates like those in the 340B and Medicaid programs, and the costs to manufacture and distribute Daraprim, Turing made the decision to raise the [wholesale acquisition price] to $750 per pill,” Retzlaff said in her testimony. “This decision also reflected Turing’s business goals of funding improved access programs and services for patients in need, and importantly, research and development into alternative treatments for the disease that Daraprim is used to treat, as well as other diseases that have been neglected by the pharmaceutical industry.”

Similar points were raised by Howard B. Schiller, interim CEO of Valeant, in regard to the pricing of the cardiac treatments Nitropress (nitroprusside) and Isuprel (isoproterenol). Along with acknowledging the impact of research costs, rebates and pharmacy partnerships pricing, he said that pricing older, off-patent drugs on their clinical value is vital to a market driven by breakthroughs in treatment.  

“The rising prices of [nitroprusside and isoproterenol] over the past decade … have stimulated market competition and innovation,” Schiller said. “We expect that multiple generic alternatives could be approved within the next year or two. These generic alternatives can be expected to put significant downward pressure on the cost of hospital procedures in which Nitropress and Isuprel are currently used.”

Former Turing CEO Martin Shkreli also was present at the hearing, but invoked his Fifth Amendment rights when questioned about the price increases by the committee.

The committee hearing was applauded by leadership of the Infectious Diseases Society of America and the HIV Medicine Association (HIVMA), who denounced Turing’s price increase last fall and underscored the difficulties faced by those affected.

Johan Bakken

Johan Bakken

Carlos del-Rio

Carlos del Rio

“The access issues highlighted in the committee documents reflect the challenges reported by infectious diseases and HIV providers and their patients in treating serious infections like toxoplasmosis and Cryptococcal meningitis due to significant price increases for the standard treatments for these conditions,” IDSA President Johan Bakken, MD, PhD, and HIVMA Chair Carlos del Rio, MD, said in a statement. “As a result, patients have experienced treatment delays and extended hospital stays, and significant provider resources have been devoted to securing medications that previously were readily available. We look forward to working with the congressmen and other policymakers to develop solutions that ensure patient access while stimulating innovation in areas of unmet medical need.”

Cummings urged his fellow members of Congress not to view these price increases as an isolated incident, but as the starting point for a larger conversation about the cost of prescription drug treatments.

“These tactics are not limited to a few ‘bad apples.’ They are prominent throughout the entire industry,” Cummings said. “I hope today’s hearing is the beginning of a sustained effort to address this issue in a bipartisan way that brings much-needed relief to American families.”

Disclosures: Retzlaff reports employment with Turing Pharmaceuticals, Shkreli is a former employee of Turning Pharmaceuticals, and Schiller reports employment with Valeant Pharmaceuticals.