The Senate’s Special Committee on Aging held its second hearing on pharmaceutical pricing on Thursday, this time taking shots at executives of Martin Shkreli’s former company Turing Pharmaceuticals, which only exists because of a monopoly and 5,000% price hike on a toxoplasmosis drug first approved more than 50 years ago.
The first panel of witnesses included a couple whose newborn was diagnosed with toxoplasmosis but after their insurers denied coverage for the drug, known as Daraprim (pyrimethamine), the couple had to figure out how to pay for the $28,000 per month price tag. Eventually, the University of North Carolina agreed to purchase the drug and sell it to the couple for about $40 per month.
“No family should have to go through what this family went through,” Sen. Bob Casey (D-PA) said.
Shkreli told Focus on Twitter that the insurance companies should be shamed for not covering the drug.
Turing also maintains that the vast majority of patients on the drug pays $0.01 per pill, though the actual average price paid for the drug went from about $6,500 for annual treatment before Turing acquired it to about $360,000 after the acquisition.
Turing has also said the price hike is because the company is investing heavily in research and development (interim CEO Ronald Tilles told senators it’s investing 60% of revenue in R&D), though the company has yet to begin any clinical trials for its new toxoplasmosis treatment and it's unclear if they will make enough to run any trials as Tilles said the company is still not profitable.
Sen. Claire McCaskill (D-MO) questioned the revenue figures provided by the company, particularly as one of the business development employees took a salary of $300,000 annually, and also raised a number of concerns about Tilles’s lack of understanding about his own company. At one point Tilles, who has no experience in the pharmaceutical industry, admitted he didn’t know what an abbreviated new drug application (ANDA) is.
Multiple senators also gave the two current Turing executives time to express regret or remorse over the price hike, but both deflected questioning and returned to this idea that the company’s R&D will eventually pay off.
“It’s hard to look back; what’s done is done,” Tilles, who also worked with Shkreli at Retrophin, said. “We’ll invest in R&D and improve patient access as much as we can.”
Sen. Joe Donnelly (D-IN) called Turing “a scam” and said he doesn’t understand how the executives of the company don’t feel any shame or responsibility. He also tried to get Tilles to make a deal and not charge more than $25 for a pill of Daraprim, which would still be 50% more than what the pill cost before the company acquired it, over the next two years, but Tilles said he has an obligation to his investors to not make that deal.
Former Turing Pharma SVP and general counsel Howard Dorfman told senators earlier Thursday that there’s no rationale for this kind of price increase for any drug, let alone one that can save lives. He also said that the drug was intentionally put into a closed distribution system to keep generics from the market and ensure the company had a monopoly. He was fired without cause after expressing concern about the company’s business model.
Adaora Adimora, M.D., M.P.H., Professor of Medicine, School of Medicine at the University of North Carolina Chapel Hill, explained to senators in depth how much more difficult it became to access Daraprim once Turing bought the rights to it.
The focus on the broader pharmaceutical industry and arbitrary price hikes was also discussed by Sen. Elizabeth Warren (D-MA), who pointed to Pfizer, Biogen, Novartis and others for unethical price gouging, though the difference between these companies and Turing is that all of these companies are investing in, conducting significant R&D and winning approval for new treatments.
Meanwhile, FDA earlier this week made a move that could stop future companies like Turing. The agency said it will prioritize ANDAs that only have one manufacturer, though there have not been any announcements from generic companies on plans to submit an ANDA for Daraprim.