Outrage is brewing in Congress over another drugmaker that raised the price of a drug for a rare disease.
Lawmakers are demanding answers about the costs of research and development and how much revenue and profit the company stands to gain from drug. A congressional hearing with company officials could be on the horizon.
Shooting off a scathing letter rebuking a drugmaker’s high prices is becoming routine in Washington. The latest was a letter sent by Sen. Bernie Sanders, I-Vt., and Rep. Elijah Cummings, D-Md., on Monday to Illinois-based Marathon Pharmaceuticals for the $89,000-a-year cost of a drug treating a rare pediatric disease.
However, the public tar-and-feathering of the pharmaceutical industry has had a mixed result, depending on how big the company is, one expert said.
“To Big Pharma, it is having a significant impact because they are worried,” said Gerard Anderson, health policy professor at the Johns Hopkins University Bloomberg School of Public Health.
Anderson said larger companies such as Pfizer and Merck are paying attention to the congressional concerns because of long-term impact to their brand and business through any new laws.
The industry’s biggest lobbying group, Pharmaceutical Research and Manufacturers of America, is running a major ad campaign this year to rehab its image.
However, some major companies still raised prices year.
An analysis from the Wall Street Journal found that in the first quarter of 2016 more than two-thirds of the biggest 20 drug companies used price increases to drive sales growth.
Smaller companies have been responsible for some of the biggest price hikes highlighted by Congress.
“A lot of these small companies that are trying to maximize their revenues right now don’t take a long perspective and therefore are ignoring all of these letters,” Anderson said.
Those companies are more worried about the next quarter than whether their brand will survive public disdain, he added.
One of the most infamous companies was a small biotech firm called Turing Pharmaceuticals, which ignited public furor by raising the price of the anti-malarial drug Daraprim by 5,000 percent.
The former CEO, Martin Shkreli, grew in infamy by disregarding the criticism. This led to a contentious hearing with the House Oversight and Government Reform Committee where lawmakers attempted to query Shkreli about the price, but he refused to answer questions because of pending federal charges over unrelated trading practices.
The latest victim of Washington ire is Marathon Pharmaceuticals, which received Food and Drug Administration approval last week for treating the rare pediatric disease Duchenne’s muscular dystrophy.
Reports showed that Marathon plans to charge $89,000 a year for Emflaxa, which is a steroid that is sold for about $1,000 a year overseas.
While the drug has been approved overseas as a steroid, it received FDA approval for a new use under the orphan drug program. The program gives companies seven years of market exclusivity for a drug that treats rare diseases, an incentive for drugmakers to make products for under-served patient populations.
On Monday, Sanders and Cummings sent a letter to Marathon demanding answers about the price.
The letter resembles other missives sent to drugmakers over the past few years, asking for answers on research and development costs and any information on sales presentations.
Last week, more than 30 Democrats wrote to Kaleo Pharmaceuticals demanding answers for charging $4,500 for an auto-injector of naloxone, an opioid overdose antidote. The drug cost $690 in 2014.
Other price hikes that got attention from Congress include Valeant and Marathon raising the price by more than 500 percent of two older heart medications.
Generic drugmaker Mylan also testified before Congress to explain the $600 price for a two-pack of the allergy drug EpiPen. The company afterward began offering a generic version for $300.
Lawmakers also have started investigations into generic drugs overall and the high price of insulin.
In addition, the House Oversight Committee and Senate Special Committee on Aging have held high-profile hearings excoriating pharmaceutical CEOs for the prices.
Despite the letters, the outrage and the hearings, no major legislation has been introduced to address high drug prices, but that could change in this Congress.
President Trump has criticized high prices before and has hinted at reforms such as giving Medicare the power to negotiate for lower drug prices and speeding up FDA approvals.
Legislation has been introduced in the House to speed up approvals of generic drug, but no legislation has been introduced to give Medicare negotiating power.
Several drug makers have adopted a practice of buying an older drug that has no competition and jacking up the price. Turing’s 5,000 percent spike of Daraprim, which was a brand name drug on the market for decades but not protected by a patent, is one such example.
Some advocates are in favor of spurring more innovation.
“If we are serious about lowering drug costs, we have to make sure that incentives created to spur innovation are used for groundbreaking research instead of simply fleecing the American people,” said Will Holley, spokesman for the Campaign for Sustainable Rx Pricing.
