December 09, 2015
Drug Price Spikes Are Hurting Consumers and Medical Providers, Senators Told
The Senate Special Committee on Aging held a hearing on off-patent drug price spikes on December 9, 2015. Americans spent $374 billion on prescription drugs last year. Witnesses provided insight into the causes of these drug price hikes in off-patent drugs and the effects on patients’ access to critical medications.
Senators from both parties singled out two companies in particular, Valeant Pharmaceuticals International Inc. and Turing Pharmaceuticals AG. Both have come under fire this year for buying old patented drugs and rapidly raising their prices to increase short-term profits. The market for many of these drugs is so small, there are few incentives for competitors to produce an alternative. As a result, people with chronic conditions who need them the most only have one option.
Dr. Erin Fox, Director of the Drug Information Service at University of Utah Health Care, told the committee what happened when the price of isoproterenol hydrochloride, a life-saving drug that many cardiac arrest patients depend on, increased from $50 a vial to $2,700 in just over a year. This drug price increase would have driven the network’s annual costs for the drug to $1.6 million, far more than could be recouped from patients’ health insurance plans. To control costs, the hospital pulled isoproterenol off the “crash carts” used to treat urgent cases.
Though not present at the hearing, Turing Pharmaceuticals CEO Martin Shkreli was criticized repeatedly by Senator Claire McCaskill (D-MO) after his company drastically increased the price of Daraprim, a drug used to treat AIDS and malaria. Turing purchased the rights to the 62-year-old drug in 2015 and raised the drug’s price from $13.50 per pill to $750. Today, the average cost of a single course of the drug can run as high as $50,000, according to witness testimony.
The committee also explored possible policy solutions to address the issue. Dr. Gerard Anderson of Johns Hopkins University suggested allowing patients to import specialty drugs from Canada, where they are often available for much less than in the United States. He also proposed that Congress create more price transparency in the drug market by opening the Average Manufacturers Price database up to the public.