Congress to probe pharma price hikes

Valeant Pharmaceuticals International and Turing Pharmaceuticals are the focus of two probes in Congress seeking to examine why the companies raised the prices of medications sharply after acquiring them.

In the House, Democrats are pushing for a vote to subpoena the chief executive officers of both drug makers to hand over documents on price increases.

The US Senate’s Special Committee on Ageing, meanwhile, will investigate drug pricing practices by Valeant, Turing and two others.

The probes are part of intensifying scrutiny in Washington of the drug industry’s pricing practices.

Lawmakers in both houses have asked Valeant for documents related to the heart drugs Nitropress and Isuprel, whose prices shot up by 212% and 525% the day the drug maker acquired the rights to sell them.

“We look forward to co-operating with the committee on its inquiry,” Valeant said.

“The list price of any individual drug typically does not reflect the actual amount paid by a health care provider or insurance company, and Valeant devotes a significant portion of its revenue to patient assistance programs that are designed to make important medicines more affordable to the patients who need them.”

Thus far, lawmakers have focused on a handful of companies that have drawn media attention for raising prices.

At a news conference, Representative Jan Schakowsky, an Illinois Democrat, mentioned Gilead Sciences’ hepatitis C cure Sovaldi, which debuted last year with a list price of $84,000 (€76,427).

“We finally have something that could cure hepatitis C, there is the cure, oh, but you can’t afford it, who could?” Ms Schakowsky said.

She said drug companies are taking advantage of the system and “ripping off consumers.”

Gilead’s shares fell as much as 1.7% on the remarks. While they recovered some of those losses, the stock reaction was a sign of how seriously investors are taking the scrutiny of drug prices in Washington.

Presidential candidate Hillary Clinton sent drug maker stocks tumbling in September when she said in a tweet that Turing was “price gouging.” The closely held drug company had bought a decades-old anti-parasitic treatment and raised the price from $13.50 a pill to $750.

While Congress looks at drug prices more closely, the Obama administration is also drawing attention to the issue.

The US Health and Human Services Department said on Tuesday it would hold a forum on November 20 about high drug prices. In the House, Democrats on the Oversight and Government Reform Committee have been seeking Republican support for the subpoenas they want to issue.

The lawmakers wrote to chairman Jason Chaffetz, a Republican from Utah, again yesterday asking him to investigate Valeant and Turing, or at least not block them from doing so.