Lawmakers Lambaste Drugmakers for ‘Egregious’ Prices

Lawmakers outraged by what they call extraordinary drug price increases have asked the Government Accountability Office to see if the increases are justified and directed the Federal Trade Commission (FTC) to investigate a drug firm’s potential anti-competitive conduct for one product.

Acknowledging that the Orphan Drug Act provides incentives to recoup R&D costs of drugs for niche markets, “at least a handful of drug companies have used this ‘status’ of orphan drugs to keep increasing costs — well beyond the costs of research, development and manufacturing,” Sen. Amy Klobuchar (D-Minn.) said as she opened a hearing on egregious price increases in the pharmaceutical drug industry.

She singled out some drugmakers. For example, Ovation Pharmaceuticals increased the price of Indocin IV (indomethacin sodium), a drug used to repair a heart problem in some premature infants, from $100 to $1,875, she said, noting she had asked the FTC to investigate the firm’s conduct for the product.

“Yet Indocin is an old drug,” Alan Goldbloom, president and CEO of Children’s Hospitals and Clinics of Minnesota, testified at the Joint Economic Committee hearing. “It has been on the market for more than three decades, so this dramatic price increase cannot be attributed to the high cost of research and development.” Ovation did not respond to a request for comment by press time.

Klobuchar also singled out Questcor Pharmaceuticals, which she said increased the price of H.P. Acthar Gel (corticotrophin) from about $1,600 per vial to $23,000. The drug is indicated to treat multiple sclerosis but is used off-label as standard treatment for infantile spasms, a disorder that affects about 2,000 U.S. patients, she said.

Questcor raised Acthar’s price “to the level required to ensure its availability,” it says in a prepared statement regarding the hearing. It “struggled for years to keep the drug financially viable” and is “not aware of any patients who need the drug but have not been able to access it,” the company adds.