(Bloomberg) — Drug price increases hurt patients and disrupt the supply of medicine in the U.S., experts told a Senate panel that's investigating the industry.
While companies should be rewarded for developing new drugs, the system "never anticipated companies acquiring off-patent drugs and then jacking up their prices to enormous heights," Sen. Susan Collins, R-Maine, said in a prepared statement at the start of the Senate Special Committee on Aging's hearing Wednesday.
During the session, doctors and pricing experts testified on the impact of price increases for older generic drugs. The committee is led by Collins and Sen. Claire McCaskill, D-Mo., who has called for government intervention. Executives from pharmaceutical companies aren't scheduled to speak, though the committee has asked them to provide documents as part of its probe.
In one case, a patient whose brain infection was being controlled with an anti-parasitic drug called pyrimethamine, or Daraprim, was unable to get the pills when the price shot up and distribution of the treatment changed, said Gerard Anderson, director of the Center for Hospital Finance and Management at the Johns Hopkins Bloomberg School of Public Health. Without the medicine, the patient's infection flared.
"After an extensive hospital stay, the patient recovered fully," Anderson said in his written testimony. "Her own cost and the cost to the health system, however, were enormous."
$750 a pill
Daraprim treats an infection called toxoplasmosis and is sold by Turing Pharmaceuticals AG. Led by Martin Shkreli, Turing acquired the rights to the decades-old medicine in August and immediately raised the price to $750 a pill, from $13.50, and implemented a closed distribution system.
"I noticed in the morning paper, this is the same guy who thought it was a great idea to pay millions of dollars for the only existing album of the Wu-Tang Clan," McCaskill said at the hearing. Shkreli earlier this year paid $2 million to buy the sole copy of an album by the legendary rap group, Bloomberg Businessweek reported Wednesday.
A spokesman for Shkreli didn't immediately return a request for comment.
Frequent target
While Shkreli has been a frequent target for criticism, "the Turing example of a several thousand percent price increase is only the tip of the iceberg," Anderson said. "Many other generic companies are doing the same thing."
That has prompted calls to action by lawmakers. "This is a market failure, and when there's a market failure, the government has a role in addressing it," McCaskill said in a prepared statement.
Regulators, insurance companies and presidential candidates have been scrutinizing the cost of prescription drugs this year, after pharmaceutical and biotechnology firms introduced treatments for cancer, hepatitis C and other conditions that can cost tens of thousands of dollars for a course of treatment.
