Recent news reports about sharply rising drug prices — some of which have followed mergers — have raised a lot of questions. Now the leaders of the U.S. Senate Special Committee on Aging say they want answers.
Last week, Sens. Susan Collins, R-Maine, and Claire McCaskill, D-Missouri, announced a bipartisan investigation into the pricing of pharmaceuticals. They said in a statement that sudden, steep price increases — often on drugs that have been around for years — could inflate the cost of health care by hundreds of millions of dollars annually.
“Given the potential harm to patients across the 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,” Collins said.
McCaskill said some of the pharmaceutical industry’s hikes “have looked like little more than price gouging.” She said consumers deserve to know the reasons for the big increases “that seemingly have no relationship to research and development costs.”
To get answers, the committee has asked Valeant Pharmaceuticals, Turing Pharmaceuticals, Retrophin Inc. and Rodelis Therapeutics for information about price hikes.
The committee is especially keen on finding out why certain drugs, which until recently had been under patent protection, suddenly cost a lot more when another company acquired the rights to manufacture them.
For example, in their letter to Turing the senators asked about the price of a drug used to treat malaria and toxoplasmosis, a cost that rose from $13.50 per pill to $750 per pill. In their letter to the chairman and CEO of Valeant, they asked about three drugs. The senators wrote that the cost of those three drugs rose between 312 percent and 2,949 percent.
Critics of big pharma contend that a recent flurry of mergers is heating prices. Defenders say the industry is reeling from a kind of perfect storm. The expiration of patents on big-name products, lower productivity from research and development and the outcry of consumers for lower cost drugs are prompting more mergers. The mega-companies that emerge hope to gain traction in R&D while cutting costs and broadening their geographic presence.
Fortune magazine put the value of phama mergers at $221 billion for the first half of 2015, three times the figure for the same period in 2014. Companies may be hurrying to join forces while interest rates remain low, as well as to meet investors’ expectations.
Collins and McCaskill say they want to make sure consumers aren’t paying an unfair share of pharma’s growth. They’ve asked for relevant documents as soon as the four companies can compile them but no later than Dec. 2.
Senate hearings are tentatively set to start Dec. 9. You can reach staff at the Senate Special Committee on Aging online at aging.senate.gov/contact or by calling 202-224-5364.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email firstname.lastname@example.org.