House lawmakers plan to put two pharmaceutical companies and the Food and Drug Administration under a microscope during a pivotal hearing on high drug prices Thursday.
The House Oversight Committee will host executives from Turing Pharmaceuticals and Valeant Pharmaceuticals, which have been criticized for raising the price of generic drugs. It also will host a top FDA official to address criticism for slow approval times for generic drugs.
The hearing is expected to include an appearance, but not testimony, from former Turing CEO Martin Shkreli, who gained infamy for his social media responses to the pricing dispute. Shkreli resigned from Turing after being charged with securities fraud for unrelated business dealings.
The hearing will be the second focusing on drug prices in Congress and the first in the House. A Senate panel held a hearing late last year.
It is part of a growing investigation led by Rep. Elijah Cummings, D-Md., into generic drug prices. On Tuesday Cummings released internal documents from both companies focusing on their pricing decisions.
“The documents show that these tactics are not limited to a few ‘bad apples,’ but are prominent throughout the industry,” he said.
The controversy centers on a lack of competition. Critics charge that Turing and Valeant bought older generic drugs that didn’t have any competitors and jacked up the prices.
That is what lawmakers say happened with Turing’s Daraprim, an anti-parasite treatment. The price shot up from $13.50 to $750 a pill in August after Turing bought the drug rights.
Valeant is also charged with raising the prices of two heart drugs, Nitropress and Isopurel, by 212 and 525 percent, respectively. The documents found that the research and development costs for the two generics were nominal, although research costs were a common defense for the price increases.
Valeant said Tuesday that it offered discounts of up to 30 percent for each drug.
Interim CEO Howard Schiller is expected to testify Thursday. He said in written testimony that under a new partnership with Walgreens it will offer an average 10 percent reduction for athemajority of its branded products and up to 95 percent reductions for brand name drugs that have a generic alternative.
Turing did not respond to the committee’s document release, but Shkreli said on the hip-hop radio program “The Breakfast Club” Wednesday that he didn’t withhold the drug from people who need it.
“If you don’t have insurance you get it for free right off the bat,” he said
Shkreli added that there are drugs “10 times” the price of Daraprim.
The documents showed one case in which Massachusetts General Hospital was trying for more than a week to secure Daraprim for an uninsured patient and not having any luck.
Other e-mails reported co-pays of up to $16,000 for some patients.
Shkreli’s attorney, Benjamin Brafman, told the Washington Examiner that his client would appear but not testify, opting to invoke his Fifth Amendment rights against self-incrimination.
The investigation, spearheaded by Cummings, isn’t stopping at Valeant and Turing, Cummings has sent letters to 14 generic manufacturers questioning pricing practices.
Meanwhile, lawmakers are expected to scrutinize the FDA’s approval of generic drugs, noting that if the agency approved drugs faster it would lead to more competition.
The committee’s meeting summary noted that the number of generic drug applications submitted to the FDA is outpacing approved applications by a margin of three to one.
Last week, FDA official Janet Woodcock was questioned by a Senate panel about improvements to the generic drug approval system, which the agency must pursue in exchange for receiving user fees from the industry.
Woodcock, head of the Center for Drug Evaluation and Research, said the agency is making progress on a backlog of thousands of generic drug applications.
