Sen. McCaskill Dissatisfied With Pharma Exec’s Explanations
In her December 9th, 2015 opening statement as Ranking Member of the Senate Special Committee on Aging, investigating “Sudden Price Spikes in Off-Patent Drugs: Perspectives from the Front Lines,” Senator Claire McCaskill (D-MO) summarized her experience with a pharmaceutical executive’s muddy replies to questions which followed a previous hearing.
“In July,” she said, “I had the chance at a hearing to question another pharmaceutical executive, Howard Schiller of Valeant Pharmaceuticals, about an 820 percent price increase his company took in February 2015 after acquiring another off-patent drug called Isuprel which is used to treat cardiac arrest. When I asked Mr. Schiller how Valeant could justify such an increase on Isuprel, a drug to which no improvements had been made post-acquisition, Mr. Schiller could only tell me that Valeant had conducted a ‘complex’ analysis and had concluded that the drug was previously ‘significantly underpriced.’ He further asserted that such a price increase on a Valeant drug was ‘an anomaly.’
“Following that hearing, I submitted questions for the record to Mr. Schiller, requesting additional information from Valeant regarding the company’s decision to hike the price of Isuprel so dramatically, as well as information on Valeant’s 312 percent increase on another off-patent drug called Nitropress, which is also used to treat cardiac arrest.
“In response, Valeant refused to answer my questions and instead downplayed my concerns, noting that Isuprel and Nitropress are only “two [Valeant] drugs selected out of a portfolio of hundreds of medications.”
Over the past several months, we have learned that Isuprel and Nitropress are not “an anomaly,” as Valeant claimed. To the contrary, dramatic price hikes are seemingly business as usual for Valeant. This year alone, Valeant raised prices on its brand-name drugs an average of 66 percent, about five times as much as its closest industry peers, according to the Senate panel. At the same time, as of October 2015, Valeant’s research and development expenditures for the past twelve months were reportedly equal to only three percent of its sales.
Valeant Pharmaceuticals, as reported in the Deadly Prescription blog, was also at the center of Wall Street reports in 2015 which questioned its relationship with an associated, now-shuttered specialty pharmacy.
“Senator McCaskill added, “The American pharmaceutical industry leads the world in innovation, and we rightly prize a system that allows the discovery of medicines that save and improve lives. But it’s imperative that we find out if that system is being taken advantage of by companies or individuals that seek deep profits while contributing little or nothing to advances in medical treatment.
“To me, there’s a line at which these huge price increases on prescription drugs go from rewarding innovation to price gouging. In particular, when these price hikes occur without any therapeutic changes or improvements to the drug, it raises troubling questions about whether companies like Turing and Valeant are taking advantage of the patients who depend on their products for survival.
“These price increases come at a time when Americans are more worried than ever about the affordability of prescription drugs,” McCaskill said.