Skyrocketing Prescription Drug Costs: Congressional Hearing Set To Tackle Pharmaceutical Companies' Price Hikes
A congressional hearing on Wednesday is set to look into rising drug costs and the increasingly common trend of pharmaceutical companies buying up already-available drugs and jacking up prices, the Wall Street Journal reported. Valeant Pharmaceuticals and Turing Pharmaceuticals are among the companies in the Senate Special Committee on Aging’s line of fire. Both have drawn widespread scorn in recent months from patients, doctors and critics of the pharmaceutical industry due to skyrocketing drug prices.
Wednesday’s hearing will attempt to discern the causes of the price hikes, how the costs affect patient access and how to potentially regulate the issue. The hearing will include testimony from experts from Johns Hopkins University, University of Utah Health Care and the University of Alabama at Birmingham.
“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,” the committee’s ranking member Sen. Claire McCaskill said. “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.”
It’s not the first attempt by the federal government to probe pharmaceutical companies’ pricing schemes. House Democrats, too, struck a task force in November to look into drug costs, demanding greater transparency in prescription-drug pricing and more negotiating power given to the federal government. Annually, the U.S. spends nearly $1,000 per person on drugs — a rate 40 percent higher than that of Canada’s, which holds the next highest rate for pharmaceuticals spending per capita.
The Canada-based Valeant drew ire earlier this year when it jacked up prices for two cardiac-care drugs, Nitropress and Isuprel, by 525 percent and 212 percent. It was later found that the company had been using a mail-order pharmacy to help patients receive more expensive medication.
Valeant has said it is cooperating with the Senate committee’s review and has provided the requested documents. The company is also ending its relationship with the mail-order pharmacy, and will “pursue fewer, if any, transactions that are focused on mispriced products,” CEO Michael Pearson said.
Turing Pharmaceuticals, headed by CEO Martin Shkreli, has also been asked by the committee for documents and information on its decision to raise drug prices. Shkreli gained infamy earlier this year when he hiked the price of life-saving drug Daraprim by 5,000 percent, instantly winning him the title of “most hated man in America” for embodying “everything that is wrong with capitalism.”
Turing Pharmaceuticals launched in February under Shkreli’s leadership, and bought the rights to Daraprim, which treats the parasitic disease toxoplasmosis, from the California-based Impax Laboratories. In August, Turing raised the price of the drug to $750 from $13.50 per capsule.
Shkreli has been largely unapologetic in his response to the firestorm of criticism directed his way after the price hike. He told audience members at the Forbes Healthcare 2015 summit last Thursday he “would have raised prices higher” because his shareholders expect him to make the most profit, Forbes reported.
“Politicians love to beat up on guys who seem to be public enemies, if you will. That’s a great way to get elected,” Shkreli said.
Turing has not commented on the upcoming congressional hearing, the Journal reported, but last month announced it would take several steps to cut Daraprim’s cost, such as offering up to 50 percent discounts on the drug to hospitals.
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