(Adds Collins statement on CEOs, comment from Turing)
By Sarah N. Lynch and Bill Berkrot
WASHINGTON/NEW YORK, Dec 9 (Reuters) - A pediatric doctor in Alabama had to scramble to find a less expensive supply of a lifesaving drug to treat an infant who was suffering from a parasitic infection.
In Utah, a hospital has been forced to change the way it stocks a drug critical to treating heart patients after the cost skyrocketed from $440 to $2,700 a vial.
These are two of the stories a U.S. Senate panel heard on Wednesday at a hearing to explore why certain off-patent prescription medicines sold by companies like Valeant Pharmaceuticals and Turing Pharmaceuticals have shot up after they acquired the rights to the drugs.
The committee also mentioned dramatic price hikes by Rodelis Therapeutics and Retrophin Inc.
The Senate’s Special Committee on Aging announced last month it was launching an investigation into drug pricing and the role mergers and acquisitions may be playing in price hikes.
The committee is reviewing price increases for two Valeant heart drugs, Isuprel and Nitropress, and Turing’s price increase on Daraprim, used to treat toxoplasmosis, a serious disease that affects AIDS patients and pregnant women and their babies.
Senator Claire McCaskill of Missouri, the panel’s ranking Democrat, said there is a difference between rewarding innovation and price gouging, noting that the older drugs in question were not developed by the companies selling them.
“If this is just greed, we have a duty to figure out how to protect patients who need these medicines,” she said.
Drug pricing has come under wider scrutiny in the last few months, not only from U.S. lawmakers, but also from U.S. prosecutors and Democratic presidential candidates.
A different congressional committee is investigating the high U.S. prices of innovative new branded medicines as well.
Valeant is facing probes from U.S. prosecutors over prices, distribution and prescription assistance programs, while Turing is under investigation by the New York state attorney general for antitrust concerns.
The increased scrutiny over high U.S. drug prices has also taken a toll on the industry’s stocks.
“Let the word go out to investors ... we’re paying attention to this practice,” McCaskill said.
Wednesday is the first in what is expected to be a series of hearings on drug price spikes that will pick up again in 2016.
“I certainly intend to call the CEOs of the four firms that we are focused on thus far,” said Committee Chairwoman Senator Susan Collins, a Maine Republican, adding that the committee’s findings may also be incorporated into an FDA reform bill next year.
Valeant said it was cooperating with the committee, including providing requested documents.
“Valeant markets more than 200 prescription drugs ... so broad conclusions about the company’s pricing cannot be drawn from any one drug or set of drugs,” spokeswoman Laurie Little said in an emailed statement.
McCaskill said Senate research found that “dramatic price hikes are seemingly business as usual for Valeant.”
Collins added that “the companies we’re investigating look more like hedge funds than they do traditional pharmaceutical companies,” and called the price hikes egregious and offensive.
Nancy Retzlaff, the chief commercial officer for Turing Pharmaceuticals, said Wednesday that “no patient will be denied access to Daraprim.”
“Currently more than 60 percent of Daraprim is provided to patients at a $1 per prescription or less and our assistance programs,” she added.
Wednesday’s hearing featured medical professionals who testified about the impact of price increases on important older generic medicines.
Erin Fox, a director at the University of Utah Health Care, said the hospital is struggling to cope with Valeant’s price increases.
“If we continued to purchase the same amount of each drug, it would cost our organization just over $1.6 million more for isoproterenol and approximately $290,000 more for nitroprusside compared to what we paid the previous year,” Fox said, using the chemical names of the Valeant heart drugs.
Dr. David Kimberlin of the University of Alabama, Birmingham, who treats infants that have contracted toxoplasmosis from their mothers, said a course of Daraprim treatment for a baby had been about $1,200. Since the Turing price hike it is “no less than $69,000.”
He said a liquid formulation needed for babies had become difficult to obtain due to Turing distribution practices.
“Babies’ lives literally hang in the balance here,” he told the committee. (Reporting by Sarah N. Lynch in Washington, additional reporting by Bill Berkrot in New York; Editing by Alan Crosby)