Any solutions to the sudden price spikes for generics?

December 14, 2015

A December 9 hearing of the U.S. Senate Special Committee on Aging had senators looking closely at several possible solutions to the recent, massive price spikes for particular generic drugs, including having FDA speed approval for competitors for products with no competition.

A December 9 hearing of the U.S. Senate Special Committee on Aging had senators looking closely at several possible solutions to the recent, massive price spikes for particular generic drugs, including having FDA speed approval for competitors for products with no competition.

Senator Susan Collins (R-Maine) said for many decades federal policy has tried to strike a balance between maintaining incentives for drug development and keeping medicines affordable.

See also: What we can do about high generic prices

“That balance we have struck never anticipated companies acquiring off-patent drugs and then jacking up their prices to enormous heights, and doing so, as one executive essentially put it, ‘because I can,’” said Collins, chair of the Senate Special Committee on Aging.

Four companies scrutinized

She said four companies are the focus of the committee’s investigation so far: Turing Pharmaceuticals, Valeant Pharmaceuticals, Retrophin, Inc., and Rodelis Therapeutics. Each of these companies, she said, has raised the price of off-patent drugs they acquired-and did not bear development costs for-by 20 to 40 times, sometimes putting the drugs out of patients’ reach.

Cleveland Clinic speaks out

Doctors at the Cleveland Clinic have told the committee that price increases of two Valeant drugs, isoproterenol hydrochloride injection (Isuprel) and sodium nitroprusside injection (Nitropress), raised their health system’s drug costs by $8.6 million, Senator Collins stated.

 

Senator Claire McCaskill (D-Mo.), the ranking member on the Democratic of the committee, made plain she becomes angry in discussing the issue. She said that in 2005 a patient might have spent $70 for a typical course of pyrimethamine (Daraprim) for toxoplasmosis. But in the meantime the rights to it have changed hands about three times, and were finally acquired by Turing Pharmaceuticals. Now a course of treatment costs $50,000, a more than 6000 percent increase from a decade ago.

See also: How retail pharmacists can combat high generic prices

Mark Merritt, president and CEO of the Pharmaceutical Care Management Association, the association for pharmacy benefit managers, told the committee that FDA needs to approve generics faster, saying there is a three-year backlog of 4000 drugs. But he also agreed there should be an FDA fast-track generic approval process for products that will compete these drugs at risk for steep price spikes.

Gerard Anderson, PhD, professor of the Johns Hopkins Bloomberg School of Public Health, said creating an expedited FDA review for the drugs that hedge funds may target for acquisition is one solution. But since that will take six months to a year, he said, in the interim, “You allow compounding to occur. And if we can’t figure out that, or they bought the compounding companies, then we might have to take a look at getting some of these drugs, in a very narrow market, in from Canada or someplace else.”

The senators asked several questions about the role that compounding might play, but some witnesses did agree that although compounding has made a huge difference in some cases, it’s not an ideal solution, in part because compounded drugs don’t have the same level of FDA oversight.

Senator Joe Donnelly (D-Ind.) said of the issue in general, “Obviously we are going to try to work with the FDA to help change the way that this moves forward.”

Merritt said expedited review of drugs that don’t have competition would change the business picture entirely.

In the interim, he said, "We may want to create a watch list of every off-brand drug that faces no competition in its class, just to let, the owners of the rights to these products and the potential hedge fund acquirers know that we are watching. We know these are targeted products. There is going to be a lot of scrutiny on it and they are going to have to deal with that. The hedge funds have these lists. The government might as well, too.”

To listen to the hearing and read the senators’ and witnesses’ statements, go to http://www.aging.senate.gov/hearings/sudden-price-spikes-in-off-patent-drugs_perspectives-from-the-front-lines