Valeant Subpoenaed Over Drug Price Increases
Valeant Pharmaceuticals is reviewing subpoenas by federal prosecutors from two states regarding drug pricing decisions, following criticism from Democratic lawmakers last month over massive price increases in two of its heart disease drugs.
According to the firm, U.S. attorneys in Massachusetts and New York have requested information on financial support provided by the company for patients, distribution of products and pricing decisions related to the two drugs.
The Canadian drugmaker disclosed the inquiry last week, the same day its Chairman and CEO Michael Pearson wrote to Sen. Clair McCaskill (D-Mo.) defending Valeant’s decision to raise the prices of Isuprel (isoproterenol) and Nitropress (sodium nitroprusside) by 500 percent and 200 percent, respectively, following their purchase from Marathon Pharmaceuticals in February. The letter was in response to a Sept. 23 letter from the senator seeking answers to the pricing decisions.
In the letter, Pearson says Valeant was advised by an outside consultant that there was considerable room to raise the price of both drugs without unduly depleting the funds available to hospitals from payers.
“In the case of hospital-administered drugs like Nitropress and Isuprel, which typically are not purchased directly by patients, systematic underpricing of these drugs meant that hospitals recouped a larger perhaps much larger share of the fixed reimbursements that they received from government and commercial payers for the procedures in which these drugs are used,” Pearson wrote. The systematic price adjustments were needed to reflect their “true clinical value” and incentive competition, he adds.
Pearson says several drugmakers have filed ANDAs with the FDA for generic versions of the drugs, and one or more could be approved in the next 12 to 24 months.
McCaskill wasted no time in firing back at the firm, telling Valeant last week that its response was “inadequate.”
Last month, Democratic members of the House Committee on Oversight and Government Reform wrote to committee Chairman Jason Chaffetz (R-Utah) demanding answers from Valeant on the price increases. Nitropress’ current list price is $880 per vial and Isuprel’s is $1,472 per vial in a 1 ml package. No action has been taken on that request.
Meanwhile, New York’s attorney general is investigating whether Turing Pharmaceuticals violated antitrust law when it raised the price of its AIDS drug Daraprim (pyrimethamine) by 5,000 percent — from $13.50 to $750 a tablet, thereby restricting access and thwarting generic competition. The inquiry comes on the heels of Sen. Amy Klobuchar’s (D-Minn.) letter last week to FTC Chairman Edith Ramirez seeking a full-scale federal antitrust probe into the matter.
Turing spokesman Edward Painter says the firm is cooperating with that inquiry, but claims the drug is available to qualified patients with commercial insurance for less than $10 per prescription and at no out-of-pocket cost to uninsured patients.