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Senators Look to Halt Price Spikes of Off-Patent Drugs

Posted 21 December 2016 | By Zachary Brennan 

Senators Look to Halt Price Spikes of Off-Patent Drugs

Sens. Susan Collins (R-ME) and Claire McCaskill (D-MO) on Wednesday released a 131-page report explaining the details behind specific price increases for off-patent drugs and ways Congress can combat such spikes.

The report offers a long look at the Senate Special Committee on Aging’s investigation from 2016 into the price increases of a number of targeted and acquired drugs from four companies including, Turing Pharmaceuticals, Valeant Pharmaceuticals, Retrophin Inc. and Rodelis Therapeutics.

But other than explaining in great detail these arbitrary price increases on drugs that generally have been around for decades, the report stops short of offering evidence that these investigations have led to companies lowering the prices for these drugs (as happened with Mylan’s EpiPen).

In fact, Valeant CEO Joe Papa told the committee’s staff in an August meeting (details on p. 101) that his company not only did not reduce the prices of two drugs (Cuprimine and Syprine) that have seen cumulative price increases of between 3,161% and 5,786% since 2010, but that Valeant had no plans to lower those prices.


“According to Mr. Papa, the company was instead focusing on ensuring that patients can obtain these drugs by making changes to its PAPs [patient assistance programs],” the report says, noting that Papa has expanded the programs so no one with insurance pays a co-pay of more than $25, and for those without insurance and making less than 500% of the federal poverty level, they would receive free medication.

Documents released in February from Valeant, which, like Turing, show how this plan is part of a public relations strategy to try to divert attention away from the price increases to these PAPs, particularly for orphan drugs treating small patient populations.

“The documents also indicate that Valeant believed PAPs could actually generate increased revenues by closing distribution channels and allowing Valeant to continue increasing prices,” a previous report said.

The Senate report from Wednesday also details the tragic story of Patrick Melvin, whose co-pay skyrocketed to $20,000 for a month’s supply of Syprine, forcing him to go “without the drug for several weeks and his symptoms escalated to where he began to have increased tremors and hallucinations, and to slur words, drool, and lose his memory.” Melvin suffered a stroke in September 2015 and died at the age of 35. Two other people who dealt with issues accessing the drugs later received access from Valeant after press reports.

A Valeant spokesman told Focus: "Our team has done an enormous amount of work over the past several months to stabilize the Company. For our business, our roughly 22,000 employees, our shareholders, and stakeholders, this management team is looking forward to the future, and working diligently to position the Company to execute in 2017. We have established a Patient Access Pricing Committee, hired an experienced executive team, improved transparency through our new segments, increased R&D investment by 38% over last year, and advanced our pipeline. These tangible improvements to the new Valeant give us great confidence in our ability to advance our bold mission to improve patient's lives with our healthcare products."

Policy Responses

In response to these egregious practices, Collins and McCaskill highlighted in the report legislation introduced in March (S. 2615) that would prioritize the US Food and Drug Administration’s review of certain abbreviated new drug applications (ANDAs) for generics of sole-source pharmaceuticals or drugs on the shortage list.

The bill would also create the fourth priority review voucher program (in addition to the programs focused on rare pediatric, rare tropical diseases and medical countermeasures), further incentivizing the development of such first generics and making FDA more transparent about its ANDA backlog.

In addition, the report calls for the temporary importation of drugs “from countries which follow drug safety standards comparable to those in the US,” though no HHS secretary has ever agreed to allow such imports due to safety concerns.

And, perhaps most importantly for the public, the report calls for more transparency on the prices negotiated by the prescription drug industry in closed-door agreements, and for companies to report the prices that are calculated after all sales and rebates are taken into account, though industry has criticized such efforts as that information should be kept as trade secrets and if revealed, would impinge on their competitiveness.

The report also calls for increased efforts to make the pharmaceutical supply chain and pharmacy benefit managers more transparent.


Editor's note: This article was updated on 12/22 with comment from Valeant.

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