Senate Aging Committee Hearing on Drug Prices: Faster Generics Approval Could Cut Drug Costs

 

The Senate Special Committee on Aging held a hearing on Wednesday, December 9, 2015, to discuss “Sudden Price Spikes in Off-Patent Drugs: Perspectives from the Front Lines.” This hearing was the first in the Committee’s bipartisan investigation into the sudden price increases charged by certain pharmaceutical companies for off-patent prescription drugs they acquire and was hosted by Senators Susan Collins and Claire McCaskill. The hearing included testimony from several witnesses: Erin R. Fox, Pharm.D.; David W. Kimberlin, M.D.; Gerard Anderson, Ph.D.; and Mark Merritt.

Senator Susan Collins, Chairman of the Senate Special Committee on Aging, opened the hearing by showing her understanding of how vital prescription drugs are to the health and well-being of Americans and how the development of such prescription drugs are typically “enormously time consuming, expensive, and uncertain,” often taking over a decade to bring a new drug from the labs to market. She made clear her understanding of the importance of pharmaceutical companies seeing a fair return on their investment after taking large risks to develop the drugs.

That being said, Senator Collins does have some concerns with the skyrocketing costs of off-patent prescription drugs by executives who raise the prices sky-high simply “because I can.” These concerns have led to the investigation of this committee, into Turing Pharmaceuticals, Valeant Pharmaceuticals, Retrophin, Inc., and Rodelis Therapeutics. Each of those four companies has raised the price of off-patent drugs they recently acquired by large percentages, up to twenty, thirty, or forty times the prior prices. Senator Collins attempted to allay concerns of the pharmaceutical and medical industries, by stating that the investigation of this committee is “not about the legitimate incentives to create and market new drugs,” but instead “to understand why such companies can impose egregious price increases on off-patent drugs they have acquired, and what policies we should consider to counter this disturbing practice.”

Senator Claire McCaskill, Ranking Member of the Senate Special Committee on Aging, followed Sen. Collins’ remarks with fiery remarks of her own. Through her fierce remarks, she too made clear that she does understand the importance of innovation for a thriving, healthy America. She is interested in investigating to find out if our system, one that allows the discovery of medicines that save and improve lives, is “being taken advantage of by companies or individuals that seek deep profits while contributing little or nothing to advances in medical treatment.” Senator McCaskill wants an understanding of why price hikes are happening without “any therapeutic changes or improvements to the drug,” saying that it “raises troubling questions about whether companies like Turing and Valeant are taking advantage of the patients who depend on their products for survival.”

Witness Testimony

Erin R. Fox, Pharm.D.

Dr. Fox is the Director of the Drug Information Service at the University of Utah Health Care and an Adjunct Associate Professor of Pharmacology at the University of Utah College of Pharmacy, Department of Pharmacotherapy. Dr. Fox focused her testimony on the price increases of Valeant’s Isuprel and Nitropress, leading to a $1.6 million impact over one year just for Isuprel alone. Dr. Fox also noted that previous acquisitions of the drugs had also led to price increases. The system at University of Utah, and other health systems around the country, tries to project patient need for new medications, but unpredictable increases in off-patent drugs are hampering that ability.

David W. Kimberlin, M.D.

Dr. Kimberlin is a Professor and Vice Chair for Clinical and Translational Research and Co-Director of the Division of Pediatric Infectious Diseases at the University of Alabama at Birmingham. His testimony focused on the price increase on Daraprim, often used to treat patients with toxoplasmosis. He testified to the importance of compounding in pediatric liquid drug administration, and the way Turing’s specialty pharmacy distribution system has made that process much more complicated than it needs to be.

Gerard Anderson, Ph.D.

Dr. Anderson is a Professor of Health Policy and Management, Medicine, and International Health at Johns Hopkins University. Dr. Anderson spoke about the effects that a lack of competition from generic drugs has on the medical community. He recommended that the Department of Health and Human Services (HHS) establish a priority review system for generic drugs when there is a compelling impetus for the application, including economic arguments. He reiterated Dr. Kimberlin’s call for the importance of compounding, as well as the ability to import drugs from Canada and other non-U.S. markets.

Mark Merritt

Mr. Merritt is the President and Chief Executive Officer of the Pharmaceutical Care Management Association (PCMA). Mr. Merritt testified to the fact that Pharmacy Benefit Managers (PBMs) are working to take the issue on “in real time,” but was also quick to make known that these companies taking advantage of patients are not reflective of the overall pharmaceutical market. He voiced concerns about drug manufacturers’ use of alternative pharmacy arrangements and co-pay assistance programs because assistance is not permitted in federal healthcare programs.

Questions and Discussion

R&D Justifications

Senator Collins was concerned about the R&D justifications companies like Turing cite when the company itself was formed long after the drug came to market. Dr. Fox was asked if there was anything different about Isuprel now that Valeant holds it, Dr. Fox responded that “the only thing that has changed is the label,” to her knowledge.

Distribution Arrangements

Distribution arrangements were a hot topic throughout the investigation, with Senator McCaskill even wondering if she needs to go see her own physician to get a prescription for a particular high-price drug, obtain the drug, and bring it to compounding pharmacies or generic companies so they could learn make a cheaper version. Mr. Merritt discussed the specialty pharmacy arrangement between Walgreens and Turing and the effects it has on bringing a generic drug to market.

Priority Pathway

Senator Bob Casey asked about the potential of a priority review pathway for generic competitors to speed up the approval process. Dr. Anderson agreed that a priority review pathway would be beneficial, possibly cutting down the generic market entry time from thirty months to six. Dr. Anderson also mentioned that a more timely approval process might result in more companies pursuing generic drugs, since the companies would have a good idea of what other generics are in the pipeline, and whether their R&D would provide a return, or if their generic would be one of many, lessening R&D return possibilities.

Policy Recommendations

Several senators asked the witnesses what their policy recommendations are, and what are some things the senators need to keep in mind when drafting potential legislation. Dr. Fox recommended transparency of the manufacturers of the products versus the marketers, so health systems can avoid the manufacturers they choose. Dr. Kimberlin again reiterated the importance of pediatric patients having access to their needed drugs without extreme price impediments. Dr. Anderson reminded the senators that, “where there is competition, the system works,” and pushed for increased competition from manufacturers of all kinds, especially generic manufacturers. Mr. Merritt encouraged the senators to work together to find a way to get new drugs to market faster, so there is more competition and therefore, reduce the number of patients who choose drugs from companies such as Turing and Valeant.

Conclusion

As Senator Tom Tillis reminded his colleagues, it is important to not “cast all pharmaceutical companies in the same light,” but instead focus on the few pharmaceutical companies acting as “hedge funds.”

There were many senators in attendance at the hearing, and many who went over their five-minute time allotment in asking questions of the witnesses. This committee in particular seems to have a laser-focus on the high cost of prescription drugs, and it is likely we will see some bills or other action from senators on the committee in the coming months.

The good news is, the senators all seem to be interested in going after the problem companies while allowing most pharmaceutical companies to continue their honorable work of finding new cures for diseases and medicines to make Americans lives easier.