February 2, 2016 / 5:53 PM / 2 years ago

UPDATE 2-Documents show profit-seeking behind price hikes at Turing, Valeant

(Adds Turing comment)

By Sarah N. Lynch and Caroline Humer

WASHINGTON/NEW YORK, Feb 2 (Reuters) - A decision by Turing Pharmaceuticals to increase profits by raising the price of a lifesaving drug by 5,000 percent drove some patient co-pays up to $16,000, according to excerpts of documents that congressional committee members made public on Tuesday.

The excerpts, highlighted in memos released by Democrats on the powerful U.S. House of Representatives Committee in Oversight and Government Reform, give a rare behind-the-scenes glimpse into the business decisions behind drastic price increases at Turing and Canada-based Valeant Pharmaceuticals International Inc.

The increases sparked a major public outcry. Both companies now face federal investigations over drug pricing.

The document excerpts show how Valeant bought two heart medicines for their “material pricing potential.” The company increased the price of Isuprel by 525 percent and Nitropress, by 212 percent.

The documents also suggest Valeant hiked the prices of another 20 drugs by more than 200 percent between 2014 and 2015.

In a statement, Valeant said it had responded to complaints about pricing by offering volume-based discounts of up to 30 percent.

Turing said in a statement it cut the price of Daraprim by up to 50 percent for hospitals. It said it used the funds from the price increase for research and development and patient access programs.

A lawyer for Martin Shkreli, Turing’s former chief executive officer, did not respond to a request for comment.

Shkreli, who also faces securities fraud charges , is slated to appear on Thursday before the House Oversight Committee with Valeant interim CEO Howard Schiller. Elijah Cummings, the panel’s top Democrat, called for the probe.

Tuesday’s excerpts show how Shkreli and Turing tried to maximize profits from Daraprim, while warding off potential public relations backlash from HIV patients who rely on the drug. The drug treats toxoplasmosis, a parasitic infection.

“Very good. Nice work as usual. $1bn here we come,” Shkreli wrote in a May email to the board.

Not long after Turing acquired the drug, reports began to pour in about patients with skyrocketing co-pays.

In one August email, a Walgreens Boots Alliance executive wrote to ask if the company would grant exceptions for “those patients with a co-pay over the approved amount of $10,000.”

In another case, the company received a plea from Walgreens to reduce the price for a dog, who was “obviously not covered by insurance.”

A Turing executive turned down the request and directed the pharmacy to a “vet meds website.” (Reporting by Sarah N. Lynch in Washington and Caroline Humer in New York; Additional reporting by Nate Raymond in New York; editing by Lisa Von Ahn and David Gregorio)

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