NEW ORLEANS, LA 09 Dec 2015—A handful of drug companies have upended the traditional balance between federal actions that support drug development and those that keep drug prices reasonable through competition, Senator Susan M. Collins of Maine said during a committee hearing today.
"That balance that we struck never anticipated companies acquiring off-patent drugs and then jacking up their prices to enormous heights," Collins said. "But that is exactly what we have seen in recent months."
ASHP Submits Statement
In a press release and an official statement submitted to the committee, ASHP emphasized that it does not collect, store, or report information about drug prices.
"However, we continually hear from our members that sudden, inexplicable price increases in connection with some of the most commonly used, longstanding generic medications are becoming more prevalent, and are occurring on a nationwide basis," according to the statement.
ASHP stated that it would like to better understand the marketplace factors that lead to price increases. The organization also asked the committee to consider the feasibility of allowing FDA to speed the approval of products whose prices have risen dramatically and face little or no competition in the market.
Collins, chair of the Senate's Special Committee on Aging, presided over the first of what she said will be several hearings to investigate the actions of companies that purchase the rights to off-patent medications and then greatly increase their price.
The committee's initial focus is on Valeant Pharmaceuticals, Turing Pharmaceuticals, Retrophin Inc., and Rodelis Therapeutics.
ASHP member Erin R. Fox, director of the Drug Information Service for University of Utah Health Care in Salt Lake City, was one of four panelists who testified to the committee about the effects of the price increases.
Fox said the prices for nitroprusside and isoproterenol increased dramatically after the rights to the drugs were sold to two different companies since 2013.
"When we became aware of these new price increases, we calculated the potential impact to our inpatient pharmacy budget and discovered that if we continued to purchase the same amount of each drug, it would cost our organization just over 1.6 million dollars more for isoproterenol and approximately $290,000 more for nitroprusside compared to what we paid the previous year," according to Fox's written testimony.
"This type of arbitrary and unpredictable inflation is not sustainable for our hospitals, especially when we receive capitated payments for most of our patients," Fox said.
She emphasized that the new owner has not changed the manufacturing process for the medications or improved them in any way.
"To my knowledge, the only thing that has changed is the label," Fox said.
Mark Merritt, president of the Pharmaceutical Care Management Association (PCMA) in Washington, D.C., said the large price hikes affect older medications that have no competition in the marketplace. He said the business strategy driving the price hikes affects a relatively small number of drugs but is destabilizing the reimbursement practices for those drugs.
"This is really a pretty new development that we've had to deal with rapidly," Merritt said.
Merritt said PCMA hasn't found a silver bullet to solve the problem, but he praised the decision of a compounding pharmacy to offer for $1 per capsule a product containing pyrimethamine with leucovorin. The compounded product is an alternative to Daraprim, the pyrimethamine product recently purchased by Turing.
"Shortly after Daraprim's acquisition last August by Turing Pharmaceuticals, the manufacturer raised the price to $750 a tablet from $13.50," Merritt stated in his written testimony.
David W. Kimberlin, codirector of the pediatric infectious diseases division at the University of Alabama in Birmingham, said Turing's price hike has seriously affected the ability to care for infants and immunocompromised people with serious or life-threatening toxoplasmosis.
Not only has pyrimethamine's price risen astronomically, he said, the product is now available only through a specialty pharmacy that will not sell the drug to compounding pharmacies. Kimberlin said this has disrupted the hospital's established relationship with the pharmacy that compounds a liquid formulation of pyrimethamine from commercially available tablets.
Kimberlin, a past president of the Pediatric Infectious Diseases Society, said the infectious disease organization is aware of "at least 30-plus cases where people could not, in a timely fashion, get pyrimethamine" because of price or distribution network issues.
Several committee members asked the panelists whether compounding pharmacies could play a greater role in preventing price hikes.
Fox emphasized that compounded products are critically important for some individual patients, but she said compounding is not a "blanket, one-size-fits-all solution" to the problem of price hikes.
"Compounding is not perfect. Patients have been harmed by poorly compounded drugs," she said.
Other potential solutions raised by the committee and panelists included speeding FDA's review of marketing applications for older generic drugs that have no competition in the marketplace and instituting price regulations for these drugs akin to the regulations that affect public utilities.
Fox said her health system responded to the increased price for isoproterenol by removing the medication from the approximately 100 crash carts, where it had been freely available for emergencies. Now, she said, pharmacists bring the medication with them when responding to "codes," which has reduced the routine use of the drug.
She said physicians strongly supported the change.
"They were very willing to work with us," Fox said. "Our physicians were appalled. They were so frustrated to learn that these old medications that they had given forever had just skyrocketed in price."
Fox said she's unaware of any instances in which patients have been harmed because their physicians no longer have unfettered access to isoproterenol. But she lamented that the change in access was driven by cost instead of clinical factors.
"It is concerning when you have to make changes based on price alone," Fox said.
She said her health system has not found a way to appreciably cut its use of nitroprusside.